All Forum Posts by: Nate Richards

If this person isn't an investor, and Ca gets $3600-$4000/mo for SFR it seems awfully risky (tons more work for marginally more gain) to sell the property. Hold and rent to a long term qualified renter.... or LC/Owner finance a sale.

Whats the attraction to going out of state?

What markets are they familiar with?

How much work are they ready willing and able to do? 

How much reserve funding is available for Repair/remodel/vacancy of a multi unit they would buy?

I feel like if the owner isn't here asking the questions, then they're playing out of their comfort zone and should find other more manageable options.

Yes. 1 unit brings increased risk, and potential stress, but that's how people start off. You just have to plan to add the second unit ASAP to off set your risk. The flip side is that when you buy something with solid bones, (roof, windows, hvac) you only have minor repairs to worry about for a while. The SFR also allows a newbie to defer some routine maintenance headaches (lawn care and direct handling of utilities) onto the tenant.

Appreciation isn't a driver on $60k homes, so you can't really own "rentals" in this area without wanting to be a cash flow investor.

Acquisition cost is an expense on all transactions and is an upfront expense not an "overhead" expense. Acquisition costs can be deducted from P&L at year end. You have zero overhead on your 1st SFR. No rent space cost to conduct your business, no accountant, no property maintenance/grounds keeping, no tradesmen, no property management.

You won't be able to streamline the up front costs until you have transaction volume. Your best course is get in, get experience,  and get out if its not for you.

Your ARV is way off. That area has always significantly lagged the Zip in valuation. There is a 12/23/2020 comp for $53/ft, and a current MLS listing @ $82/ft, putting the ARV in the $127k range on the high end.

The 1% rent ratio would also confirm a similar valuation.

If you're still attempting to hold on to the deal, your best bet is to evict the squatter on the owners behalf. Which I'm guessing is an impossibility given that it was an auction.

Otherwise, I don't see how anybody wold finance it.

Welcome! Great community here, if I were single and starting fresh, I'd start with a 4 unit, and do Brandon's 4/3/2/1 strategy. Cost is going to hold you back in the suburbs, but it's hard to go wrong if you follow half of whats posted here. 

Thanks for the encouragement @Jay Hinrichs, I'm hoping someone has some relevant experience so it isn't construed as an attempt to gain "punitive" damages and quickly discarded.

Hello Everybody, 

I need some recommendations on this scenario;

Recently purchased a 3 unit, fully rented property, and received 1 of 3 deposits. This is a D property in a B+ area so some abnormalities were not unexpected, but this is different. The closing disclosures stated there was only 1 of 3 deposits, which was questioned at closing and the seller's agent "confirmed" was correct prior to signing. When introducing myself (landlord/property manager) and the owner (my wife) to the tenants and informing them there were no deposits on file for the existing leases they both produced a lease agreement indicating deposits along with the previous owners signature. When our agent contacted the seller he said "sue me, take me to small claims court", arguing the tenant leases were fake, but refusing to supply his matching lease pages. 

Additionally, the landlord had one tenant living without electric to half his unit (kitchen half) for a week prior to closing. IMO This repair would be an exception to the "AS-IS" clause as it was functional during all visits and was disclosed to the prior owner with enough time to repair prior to closing. Same as a seller can't break all the windows day before closing and claim the sale is "as-is."

My question is as follows; 

Since my wife is the owner is there a way to recoup the cost of my (property management) time as eligible for reimbursement? I have 6-8 hours in multiple contacts over the last 2 weeks obtaining documentation and requesting these funds be supplied. Ohio does not allow for a plaintiff to recoup costs of preparing the claim or lost work time related to filing, but what about the cost of property management? Does she have to subpoena me as a witness or am I actually a plaintiff via marriage? Our other properties are held in my name only, so she would technically have zero history for fees. My W-2 rate is higher than hers, and my hourly income exclusively related to RE is about 6X my hourly W-2 rate. Are we reasonably allowed to seek the RE rate or only her W2 rate? The deposits and repair are a meager $1200, but total claim would be as high as $3500-$4000 if applying my RE rate for our least profitable property, and over the $6k limit if using an average rate of all properties.

I expect the base deposits to be a slam dunk win, with issues during collection probably requiring wage garnishment from 1 spouse. I'd love some input from anyone with past experience on a similar transaction.

TIA!

really, no advice?

@Jason Goretzki the rule was actually to seal eviction records if the tenant won or it was incorrectly filed. Keeping their record clean.

It in no way shape or form would have hidden actual evictions.

@Jill F. Dang, three in a row I'm outta town. I'll catch up next month, promise!

@Jen R. The proposed changes seem logical and reasonable. The main issue really being lack of reporting detail by the courts.

I'd REALLY like to see their raw rental data. I don't believe any location is artificially up 100% without significant investment. Investors buying 10k properties w $350/400 rents who spend +20k on a top to bottom remodels absolutely justify an $850/950 rent.