All Forum Posts by: Adam Stanton

@Bryan Neal

Good feedback, just what I was looking for.  If it were spring I could probably get 875 but right now I suspect I'll have to drop it a bit.  

@Richard Vang so all 3/1 SFH should rent for 825? Doesn't make much sense. The AVERAGE is 825, that's what I wrote. My house is nicer than most so possibly appeals to a higher end renter. Possibly.

@KirkR my application is free.  Tenant turner charges $40, not me.  Not sure what the confusion is.

Closing on my first SFH in Richmond Va in a few days. I'm using the site tenantturner.com to market for renters. So far I've got seven prospects in a week but none panned out or even wrote back to me after I sent them an initial email. Here are the details.

3/1 SFH in C- area.

Average rent based on CL, zillow is 825.  I'm asking 875 due to the home being in great condition recognizing this is a rough time of year to find renters.

When I get inquiries I send them an initial email asking them and any other adults in the house to fill out an application at no charge.  Tenantturner does the background check and charges the applicant $40.  I'm wondering if that is kind of high for each adult (2 -3) in this area?  However, the cost doesn't kick in until after I've shown them the place and they want to move forward.  My cost is $60 per home per renter flip.

In what increments should I drop the rent if things don't pick up?  I was thinking $25 per week.

@brian rhodes - Sent you a PM.  Agree completely that Richmond has better deals to offer.  As I get better I'll find them.  Just had a baby so time is a bit of a luxury.  This deal, while not screaming hot I think still offers good cash flow.  I structured it so down the road should I want a PM there's enough meat on the deal to allow it.  

@david hood - yes, good curb appeal, low low sales in the area.  I suspect the people who will want to live there will be the ones who know the area, in other words, they know it's got some issues.  My job now as I see it is to get smart on how to screen tenants.  

it's a turn key rental just inside the city limits. I call it a really nice house on a nice block in a just ok neighborhood. It's my first rental so I have a lot to learn. But I'm pretty sure I can make a few bucks off it. 

@johndeavers, it is north, off Mechanicsville tpke just south of 64.  It's nearer the tpke than I'd like it to be.  I'm sure you're familiar.  

@engelorumora, those sound like great deals but REI is all about location. What works in your market doesn't necessarily work in mine. However, if you find another 8500 deal let me know. I'll fund it and split it with you :)

I have a 3/1 cape style in Richmond Va that I think may be a good buy.

Asking 65k, but I talked them down to 55k.

Rent in the area, according to CL and rent range is about 775 - 825.  Renter pays gas and electric, I pay water and sewer. 

House is turnkey.  Minimal repair cost needed, if at all.  

House is great, block is OK, but two blocks away is not so nice.  This is my risk.  Can I get a better than horrible renter in a neighborhood that is OK but near a shady area.  

CoC with 25% down, 10% vacancy rate and doing my own PM is 27%. I know you all are going to say that's insanely high and I must be missing something. Even if my rent speculation is wrong, I know I can get $550 (one percent rule). That still gets me a 14% CoC return.

They actually countered with only 1000 off original asking price.  I sent back the original offer of 35k cash and took @joegore advice and added the repair cost breakdown.  

I have another buy and hold deal in the hopper once this cash deal dies.  After that I'll be getting smart on marketing.

Appreciate all the feedback.

Like I said, 105k is high end ARV and I'm not very confident it will sell for that. 90 - 95 is safer and smarter to work with. If I plan for 90 - 95 and it sells for 105, then I just make more. But to go in to the deal expecting it to sell at the high end is just not smart business. And yes, the estimate is me doing most of the work. I also don't buy a lot of material new. Restore and salvage yards have tons of great stuff and with just a little effort clean up real nice. Using new material and hiring out trades to come in and do the work would be more.

I've held off from building a marketing strategy because there are lots of deals on the MLS still. Problem is competition is thick. Because I have a full time job I can't always get to these places quick enough. I need the deals to come to me. So time to make a change.

Don't get me wrong, I want this house but I'm pretty sure my offer will not be accepted.  Here's the deal:

Seller is asking 68k for a 3/1 ranch style in a decent area of Richmond Va. I don't see how this place can get financing, it's in pretty rough shape so the deal has to be cash, thus my competition are other investors. ARV maxes out at 105k but realistically is in the 90 - 95 range. I estimated repair costs at 20 - 25k. Using the 70% rule brings me to 28 - 33k. I thought that a little low considering they want 68. So I offered 35k cash with a quick closing.

They have a few offers already so I'm waiting for the obligatory "best and final" notification from my realtor.  Richmond is thick with investors these days, lots coming from further north where deal flow is drying up.  Many are rookies and are so eager to cut a deal they are making the mistake of buying too high while also underestimating the repair costs.  I suspect that is what may happen here.  

So what's the answer? How do I build my business in an area I know and like to work in (I'm a licensed contractor)? How do I avoid competing with the deal cutters and slash and burn type investors? I think the best answer is I can't, fully. There's always going to be competition. But I'm starting to wonder if using the MLS to find deals is the most effective strategy. It takes a lot of time to keep up on the listings, go and see the properties, run the numbers and submit an offer quick.

I think it's time to develop a marketing plan.