All Forum Posts by: Peter Lee

I wanted to know what are some of the things you guys do to a property before your tenant's move in?

I'm looking for way to make the property as low maintenance as possible.
Here are some of the things I've picked up along the way.

1) One Color Satin / Egg Shell neuter color paint ie (Tan)
I've even thought about doing a semi-gloss, but unsure if tenant's would like. Every time a tenant moves out, the walls are always pretty dirty. This help out quit a bit.

2) Tile flooring, at least 16x16 the whole house except bedrooms, stairs, and hallways if 2 story. 12x12 is fine if savings is big enough. Ceramic or Porcelain? I usually just go for the Ceramic as it's usually cheaper, it might not be as strong, but i think it's strong enough.

3) Desert Landscape because I live in the desert so tenants are ok with that. I have the landscaper put in that thick plastic cover to minimize any future weeds.

4) Install new plumbing fittings / valves, i especially like the quarter or half turn valves since it's easy for the tenants to do.

5) Install Door Stops, I've had many dings. I don't like the ones you install at the bottom of the doors, as tenants always seem to knock them off.

6) Install Closet Door Bumpers

So, what else do you guys do?

@Brian,

Normally, I would agree with you for a normal equity sale, but to find good deals now a days in my area, those deals are usually REO/Shorts.

Hey Donna,

Are you planning on managing the property yourself from CA or have your brother manage it or hire a prop mgt co.?

Donna, how much is the HOA?
The HOA is usually the deal breaker for me as some are anywhere between $100 - $300 and a lot of HOA's are shady.

Anybody know a way to find a good home inspector?
In my previous sales, I would just use what my realtor recommended, but realtors have their own agenda to get the deal closed and get paid.

Now, I want to a find a good home inspector. Any recommendation on how to find one? If I ask my friends, they would probably just recommend me a person who was recommended by their realtor from their purchase.

Thanks.

Hard to get rent right now, I have a property that has been sitting in the market for almost 3 months now. Every 2-3 weeks dropping the price.

My property in on the SW side of town, 1600sqft, 3 bed, asking $1100, then $1000, now $900 and still vacant. Tried the MLS, Craigslist, signs, word of mouth, nothing yet.

I was always in the mindset that if you contact the LA directly, they would get the full commission, which I thought most LA would want. I mean, who doesn't make more money right?

But, I have been having the same issues where some LA call me back, some ignore me. I think there's a lot of insider deals going on right now on high demand properties.

Since, I'm an investor, I'm really not that picky when it comes to choosing my property as long as the numbers work, I'll buy.

Someone suggest that I should just play it like it's a numbers game and find a BA and write offers left and right, even sight unseen as if they accept, i can view the property at a later date.

Thanks Tracey,

I also went ahead and google it and this is what I found.

http://thephoenixagents.com/why-does-the-bank-want-the-first-5-digits-of-my-social-security-number/

http://activerain.com/blogsview/1950779/buying-a-boa-short-sale-if-so-be-prepared-to-give-first-born-

There is a mindset that why pay off the mortgage early, it's a tax deduction right? Well, if it's so great, why don't people ask to pay a higher interest rates? Have you ever hear people say, tax me more please, tax me now!!!

Even if you're interest rate is 4%, you're not really deducting the whole 4% dollar wise when you do your taxes.

Yes, having to pay taxes on you're income on a free and clear property sucks, but you will cash flow more of course and it will allow you to buy more properties.

That said, if I had one million dollars and each home was say $100k. I could either choose to buy 10 homes cash or put 25% down on each and buy 40, I would choose to buy 40 because of the appreciation potential, but I would at least cash flow $200 - $300.

A 15 year loan on $75k @ 4%, PITI is about $800. I can get $1000 on rental in my area. If you rather get more cash flow, then put more $ down, but I'm good with those numbers.

So, let's assume that in 15 years, the homes will have doubles.
Person #1 - Paid all cash for 10 homes.
Home Net $2M+ $1,800,000 on cash flow. ($1k * 10 * 12 *15)

Person #2 - Put 25% down for 40 homes.
Home Net $8M + 1,440,000 cash flow ($200 * 40 * 12 * 15)

Who would you rather be? Sure it's more work and I make it sound easy when I know it's not, but you get the idea. I'm sure I'm missing details like taxes, repairs, vacancy, aliens from Mars landing, blah, blah, blah. :)

As far as being sued because you don't have 100% equity, people can sue for you anything, just because you only have 20% equity or whatever, doesn't mean they can't come after you. Get an LLC, S-LLC (Some States), Land Trust, Umbrella Policy, etc.

So odd are that I won't get audited by the EPA, so I plan on simply giving my tenant a form that says the house was built pre-1978. I would probably just use the exact same form I get from the lender at escrow.

When I one day I have to resell it, I would of course have to get it show ready and probably end up painting the house. If I do get audited, not sure what to do, but point the finger the other way to the contractor that left town? lol. I'm sure that will be ok?