All Forum Posts by: Nancy Roth

It sounds like you do a very thorough job, Jason, more so than do a lot of wholesalers. But thought I'd offer my perspective in response to your query.

I bring buyers and sellers together where there is a good deal, regardless of whether it's a wholesale, a listed property, an auction, a tax lien property, estate sale, whatever else. The flyer doesn't matter. The numbers and the seller's motivation are all that matter.

FWIW, though, I will not let my buyers cement a deal based only on the seller's repair estimates, as that is part of the buyer's due diligence. We work through the different scenarios at various price points and financing options to set a goal on how we want to do the deal, and go on from there. 

I work and buy in Baltimore, so will probably run into you sooner or later! 

Nancy E. Roth

One more thing, then I'll quit yakking. I didn't start out so cynical and disillusioned about management. When I bought my first property two years ago I assumed that I would need the support of a local manager. My business model (to the limited extent I had any) factored in the expense.

Only with great difficulty and reluctance did I finally recognize this past spring how very badly I had fared (and my properties and tenants had fared) under the supervision of the first manager, and still later, under the second manager. I believe the problems created by my managers far outweighed the problems they solved.

This self-management strategy, supported by contractors that I know and trust, is a new one for me. I cannot claim I've been successful with it, so I urge anyone considering the alternatives to take my advice with a grain of salt.

But should you choose to enter a relationship with a manager, better keep your eyes and mind open, and be prepared to bail out quickly. You may find that the relationship is costing you far more than you figured in your spreadsheet.

What Ned said.

FWIW, some landlords of my acquaintance use the following rule of thumb for purchasing a property: it must generate at least $300 in monthly cash flow. Could you negotiate your purchase price down enough to to achieve that? But even then the HOA fee works against you--and that could go up at any time, arbitrarily and unpredictably.

You'll find a better deal. Best of luck.

@Lisa Phillips, hi. I admire your videos, and learn a lot from them. You are a thoughtful and talented educator.

But please let me fine-tune your reading of my comments. I would never advise someone to drive all those miles and fix everything with their own hands. I couldn't do that myself.

I suggested that the property owner develop positive, ongoing business relationships with a few multi-skilled local contractors, whom the owner can call in an emergency. That way the owner monitors and follows up on the crisis and hopefully prevents it happening again. 

What's more, the contractors the owner hires are accountable to the owner alone. This is very important. I found that the contractors sent by the property manager were beholden to him, b/c he was the one who gave them work. They were not at all available or accountable to me for what they did in my property. Or, should I say, TO my property.

Yes, when you call your own contractor, you are forced to keep tabs on what's going on with the property, more so than if you have hired a manager. Some owners prefer this, and I don't judge them. But personally I find it responsible and healthy to stay on top of your properties.

BTW I was advised to try this no-manager approach by a number of experienced local landlords, who use it themselves.

Hi, no, not mentioning any names, lest I set myself up for a libel lawsuit. Just trying to help potential investors to see another perspective.

Tyrus, I plan to manage my own properties from here in, thanks.

No offense to any managers reading this, but in my experience managers suck. Try to do without one.

I have had nothing but trouble with the two property managers I've had the misfortune of dealing with, one after the other. Both did inferior repairs on the house and would not fix what they had messed up. I paid twice for many of their repairs, hiring other contractors to fix up their mistakes.

Horror stories: My most recent ex-manager's rental agent mistakenly told a prospective tenant that there was CAC in the unit; this started the relationship on a distrustful note, and the tenant later put rent in escrow over issues she could not get resolved. In another property the same rental agent placed a felon, who proceeded to not pay rent until we succeeded in getting her out.

The manager and staff also treated the tenants with contempt. Both the tenant and I called several times requesting they fix something in the bathroom. Neither of us got a response. I had to walk into the office and show my face to get the staff to pick up a phone and call their contractor. I wound up hiring someone else anyway.

I would suggest that you develop relationships a few good local do-all contractors that you can call for help in an emergency. Expand your contractor contacts by getting references with your colleagues. You will have much better control over the property and your wallet without a manager.

@Alan Charles, jurisdictions vary in their criteria and procedures for lowering property taxes. Baltimore has a specific set of steps you can use to challenge a tax assessment, whether you are a homeowner or an investor. I'm petitioning for a reassessment of a rental house in Baltimore as we speak (OK, type). Baltimore homeowners, however, can obtain a homestead exemption lowering their property assessment, and thereby the tax they must pay. This exemption is not available to investors. 

I have no clue what the rules are in Atlanta, however, and wouldn't presume to advise you.

My suggestion would be to seek out local investors. If Atlanta does not post something on their city government website, and you do not know of anyone to ask in your community, perhaps look for some Atlanta-based investors in the amazing orbit of Bigger Pockets.

Best of luck in your efforts.

Just curious what you wound up with, Bill. I used to be phone-phobic as well, but got an iPhone last July and it has made my life so much easier to manage. I never used to text much either, but many of my contacts are better able to receive information by text instead of email or direct call. It's a remarkable management tool.

I don't know why anyone chooses to mentor. I can tell you that I met my mentor by attending an investor group he runs in the Baltimore-Washington region. After hearing him talk about negotiation one time I called him to ask if he knew of any courses or teachers that would help me gain better negotiating skills, as it's not instinctive to me (see earlier discussion).

We talked a little while, and to my surprise he offered to be a mentor to me. He has been a mentor to others in the past but was not involved with any students at that moment.

Why he mentors, I don't know. All I can think is that he gets something out of it. He doesn't have to run his groups either, for which he charges nothing (unlike most of the other group leaders). He is also involved in the community, speaks at schools, etc. Some people just like that kind of engagement.

Does anyone who has served as a mentor have anything to add to this?

Well, Bill, you are quite perceptive, but in certain aspects of your analysis you did read a a little more into the situation than was there. I do appreciate your comments, although I wish you had asked for more information instead of working so much on inference.

This is a public forum, after all. It's really not fair to raise questions about another participant's ethics or practices until you have all the facts. It's also not going to encourage participation, if people worry they have to weather an attack if they ask a simple question.

Just to wrap this up in response to your last entry, the property is in Baltimore, where I grew up, and it's not in a war zone, and in fact is not far from the area where Johns Hopkins is doing a very promising community development project, including taking over a neighborhood school.

The monthly mortgage payment will be a little more than half the cost of the rent, depending on what loan structure she chooses. Both loan structures call for full amortization, one in ten years, the other in nine.

The truth is, I might have made more profit in the long term by keeping things as they were. On the other hand, I get a slight immediate advantage by freeing up funds for other projects. I could have gone either way. There was no swooping down, and I had no reason to run away from the investment.

The brick rowhouse is of the vintage of most in downtown Baltimore: early 20th century. I put in a large number of repairs, and it has a lot of use in it. It is a pretty good investment for her. She also gets an extra bedroom she can rent out to supplement her income, which she cannot do as a renter.

Why did I ask BP about insurance? I haven't done a seller finance before and was exploring all my options, at the encouragement of my lawyer. I brought the question to the forum because I couldn't get a clear answer from other research. The answers were helpful.