All Forum Posts by: Neil Goradia

I had a rental unit where the house right next door was owned by someone similar to what you are describing. Because they are usually very secretive that they are renting to sex offenders, I don't know how anyone would find out other than maybe doing a search online or keeping your eyes and ears open.

Not sure if that type of business model is a good one or not. The only reason we found out was because he called us when he found out that our tenant had a home day care business - an obvious no-no within a certain distance of the sex offender's residence. I believe they also can't live within a certain distance of a school.

Keith,

I think what you'll find is that most lenders don't want to do a refi if the property is in the name of an LLC, especially if it's relatively new. What we've done is to refi while its still in your own name, and then do a quit claim deed over to the LLC as you described.

Good luck,
Neil

Steve L - thanks for your post. I'm actually suprised that 1 person can handle 60 properties all by themselves. I assume you don't task him/her to negotiate or deal with issues where they would have to make financial decisions. Would you mind sharing how much you pay as a base salary, or send me a private msg?

Also, I'm a little confused about the question you asked at the end...why we wouldn't buy and rent as a business. did you mean why are we thinking of other non-real estate related businesses for the future or did you mean we should re-strategize how we conduct our existing company business? I am open to practically anything, even if it is non real-estate related...so that's all I was trying to explain. May I ask what you do for a living now that you have 60 properties? Are you retired on the beach somewhere or do you still have a day job and if so, why? You don't have to answer if it is too personal, just trying to find out what makes you tick after you've reached that level of success,...not sure I know what I would do with myself and I'm not even sure now at 25 homes. Thanks a lot for your advice.

forgot to mention that you can get insurance that covers a handyman you are using, but it is pricey...so go ahead and get a quote to see what it would cost. It is highly dependent on what type of work they will be doing. If at all possible, stay away from doing roofing, this is a very risky type of construction according to insurance companies and will cost you a lot to cover them.

We have insurance that covers each property at a certain cash value - i.e. the amount of cash we'd be willing to walk away with if something happened. this is because most of the time the homes we have wouldn't be worth rebuilding because you'd be upside down. Also have a $1-2M liability policy across all units in case you get sued. Try to keep the deductible low ($1k or less) so you can put in a claim when hail damages your roof! Also, get loss of rent coverage, its just a few bucks more per month and allows you to get reimbursed for the months that you can't rent your unit when something happens to the property.

when it comes to handymen, the more you use them the more you will realize which ones are good and which ones aren't. if you have come to know they do good work, it doesn't matter to me whether they are licensed or not....they know what code is just as the licensed people do. that's just me though. if you're looking to flip a house, i'd probably use licensed because there will be an inspection and you don't want to go in again and re-do a bunch of work, plus you can provide proof in case they ask for it.

good luck.

Everyone,
Wow...thanks for all the replies! Definitely digging this forum. Thanks a lot for the advice and props.

After reading everyone's replies I think it's clear $20/hr is enough for a PM. Unfortunately I wouldn't be able to guarantee the 40 hrs per week to our in-house PM if I paid them $20/hr, mainly because I really don't think there is that much work involved. I suppose I could pay them for 40 hours if I only paid them $10/hr, but that is hardly an enticing salary.

Brian A - you are correct, those are the exact reasons I want to in-source the property management. I've had a really bad experience hiring a firm...they are now out of business because of how bad they were...another topic for another day. Also I don't mind going to the evictions, I can usually squeeze them in my work day.

Mike H and John H - That makes a lot of sense. If I'm giving them that kind of volume the costs should come down quite a bit. But I guess I just have a sour taste in my mouth from that bad experience I had.

I think you are all right that there are a few things that are enjoyable and other things that are a pain. Perhaps I could automate the rent collection, still answer phones but keep the handymen on call, and then outsource the showings and maybe accounting.

Ken L - Thanks for the advice about the job. Unfortunately I just don't enjoy being in meetings all day...haha. I have a limited time on this Earth and just feel like I could be doing something else productive with my time. I do need to go through the calculations on health insurance. Not worrying much about the retirement match, because my retirement account is basically all my rental homes. At some point you gotta just draw a line in the sand and make a clean break. If that means living well below your means, I'm willing to do that for a shot at doing something exciting.

I've always worried about doing this personally. Not so much for the reason of having someone sue all my assets, but it just makes me nervous that my tenants could see where my other rentals are. They could go to those homes, disturb tenants, maybe even give bad reviews online if there is one tenant that had a bad experience, etc. Too risky I think.

Hello all, I was hoping you could help me with automating my rentals. I've searched the forums but haven't quite found what I'm looking for.

I started investing in 2007 and with a partner have accumulated about 25 rentals. We both work as engineers full time, but since we have a few handymen that we've developed a great relationship with, we've been able to manage everything pretty well. I handle techincal issues with the handymen and rehabs and my partner deals with tenants and collection.

We've just hit a milestone where all our investors and properties are paid off, which gives us the rare opportunity to quit our jobs and live off the rental income. While exciting, I found it difficult to think about our future consisting of just managing rentals all day. Since then we've come up with a few great business ideas and we'd like to pursue them with the same vigor that we bought and rehabbed homes.

My question is, what types of things can you automate in a single family home rental portfolio? Rent collection online seems like a decent idea (read the article on BP) but am not sure if that would train my employees (tenants) in the way I would want. Another one I thought of is getting a property manager, but with the number of rentals I have, you would think I would be able to hire our own "property manager" and get them to coordinate with our handymen and collect rent. I just don't see someone wanting to do this type of work for only $20/hr, do you? Even if we did find someone it seems like they'd just learn the ropes and then go off on their own to invest in real estate. Has anyone successfully "handed off" their real estate business and been able to pursue other aspirations? If so, could you share some of your strategies? Thansk a lot!

Neil