All Forum Posts by: Nick S.

Yea, Luis, 6:30 at 40 S. 5th Allentown, PA 18101

https://allentown.craigslist.org/reb/d/64-unit-lux...

This one? 

@Brian Adzadi, 

OK - you were putting 100 per month aside for water/sewer. I thought it was only 100 per quarter for water/sewer and trash. 400 per year wouldn't cover that, but 1200 would. 

We had that concern about the lien issue with water as well, and instead of having the tenant pay the bill directly, we pay the bill and then have the tenant reimburse us. After acquiring a few houses this got a little hectic, so adding a property management software was necessary and helped a lot with tracking tenants. 

I see 1100-1200 for rent for 4/5 bedroom homes - you're right there, so it may have just been that tenant. 

Hey Brian, 

Looks like a property that will make you money. But your cash flow will still be lower... The trash bill for Allentown is $375 per unit and billed once per year with your City tax. Your water bill is typically 35 per unit per month (for apartments), and 35-40 per bedroom per month for a single family home. I would put your water/sewer bill around 120-175 per quarter. Personally, I have my tenants pay the water/sewer bill for SFH rentals.

Hey all, 

Anyone have a great accountant recommendation for real estate investors and agents in Allentown, PA? (Allentown by Philly, not Pittsburgh).

Thanks!

@Mathew Pezon

Sorry for the delay.

Since the two challenges I’ve focused entirely on building a strong and profitable rental portfolio. I’m at the point where the cash flow is strong enough to easily sustain the holding costs of flips, and I feel like I truly know the markets that I would want to flip in.

As far as learning contracting, why not buy a run down rental? It’s just an easy way to learn, and your exit strategy doesn’t rely on a buyer, only a renter, and that’s much easier to put in place. Even if you renovate a little too much, you’re only going to get a better tenant (to a point). I learned half of what I know by working for other investors for free on weekends and days off, and the other half I learned by trial and error and youtube.

I hate quitting too, but leaving one aspect of real estate isn’t quitting the game. There are tons of ways to make money in this business. I’ve seen landlords leave because they hated it and went straight into holding notes – that’s not quitting to me, it’s finding the niche that fits you at the time and builds your wealth.

It’s not about proving myself anymore. I know I can do it, but now I know what I didn’t know before and I have the confidence and knowledge to do it right this time. Worst case situation now is I own a little higher end rental than I'd like. 

Matt, 

Thanks for sharing your post - I'm sure it took a lot to write down and admit failure. 

I have two similar situations on flips. My first two lost money both times and once it was really big (25%). I was inexperienced, listened to the wrong people for advice, and was too excited without enough due diligence because it also "looked so good on paper". On top of that, the one house was on the market for 3 weeks and was broken in to and they stole all of the appliances, FURNACE, toilets, AC unit, and other random things. I learned that vacant property insurance does not cover theft of materials inside the home. That alone cost 12k. It was awful, but I made it through the experience and learned a TON.

Now, I am thankful for the experience because of how much I learned and how strong I now am because of the loss. It happened for me to get better and become the investor I am today.

Stay focused. 

Nick

@Jordan M.

Just wanted to change your calculation:

The business privilege tax in your calculation is not 3.5%, it's 0.35%. Your translation of what @Dave Lin posted wasn't correct. The BPT (Business privilege tax) is .0035 x gross revenue. This translates to 0.35%. If it was 3.5% (0.035)  there would be a lot of angry landlords that already disagree with that tax...

@marcia maynard, I just bought two of the ones that sit on the wall and don't go into the drywall. I'm excited to see how/if they work better! 

Thanks for the responses! 

It's been a constant struggle, and I agree with you with keeping the heat in the home; however, it's an older building and it would cost a ton to insulate and knock down the plaster and then stud, insulate, and drywall. 

I have a friend that used to work for a gas company, and he said that per unit, if I help him, will cost me 3k. For 6k it seems worth it to me to help two of the first floor units, and then have that heat rise and possibly take the chill off of the second floor.

In the second floor I've thought about installing the forced hot air electric wall unit heaters in the bedrooms - since they blow air out it seems that it would be better than the baseboard heating that only heats the air around the unit. Thoughts?