All Forum Posts by: Pete Barrow

Quality here can be very different block to block, street to street. It's hard for an out-of-stater to tell the good from the bad, and especially to find promising bargains by nibbling around the fringes of the good areas, getting in the path of progress, etc. 

There are some large areas that are pretty reliably bad, but those are also the areas where OOS investors can easily find inexpensive properties. 

If you want to message me where your properties are, I can tell you what I know, if anything.  

You probably have some idea what sort of return you want to make. So if you find properties that will perform like that, buy them. If not, wait and look harder. 

The only things we (family business) are buying now for our own portfolio are off-market properties at prices that would have been reasonable 5 years ago, before this big run-up. We want to be able to look back after a big correction and not be sorry we bought in 2018. So, our buying has slowed way down in the last year, but it hasn't quite stopped. 

Of course, if you're looking in CA, I'm sure the situation is far more difficult. 

I think it's hard to unravel whether a plumber is talking down to you because you're female, or because he knows more about plumbing than you do. I think sometimes it is a little shocking to a tradesman to see how little the average intelligent, educated person knows about, say, how to vent a drain system. 

As far as them getting away with things, that's a tough one, because there are only two ways to prevent that. One is to know about as much as the guy who's doing the work, and oversee him. The other is to hire only guys who don't want to get away with anything, who pride themselves on their work. And those guys tend to be hard to find, and not cheap. 

I think most builders will decide how seriously to take you based on 1) How much do you know about building? and 2) Do you have money?

I was an independent tradesman for many years. Most of the time I worked for women, because they were the ones who had strong opinions about how the home should be, and they were around more to interact with. Some of them were very knowledgeable about their houses. 

Any builder who doesn't want to work for women is going to miss out on a lot, and leave a lot of money on the table. That's especially true of women in REI. When I go to RE meetups, usually somewhere close to half the people there are women.

We (family business) manage our own portfolio (40+ doors) and once we get to a certain size...not sure yet what that size is...we will probably do some hiring and create a PM company to manage for others as well. 

I think it makes a lot of sense to solidify your PM skills as you build up your own portfolio, and then take those skills to the market as well. 

I wouldn't touch this house unless I had a pile of money to burn, and a serious network of good tradesmen. The sky is the limit for what the electrical and asbestos removal alone could cost. And who knows what else there is that the inspection didn't catch?

Apparently, other investors aren't fighting to get this place. So knock the price down, way down, and say "Take it or leave it."

If you are feeling compelled to buy because the cash flow sounds great, be aware that a 100-yr-old house is going to need steady ongoing maintenance, which you don't seem to have factored in. That is especially important here, because it sounds like you are buying from a landlord who did minimal maintenance and upgrading over the years. Those houses are among the worst we see, with even the work that was done being done badly, and needing to be ripped out and redone. 

Maybe what they mean is that one of their employees or partners saw the property, not them personally. In our business, for example, part of my job is to go inspect properties, and I always take 30-50 pictures. I send these on to my sons / partners, who come up with a target price, negotiate with sellers and buyers, etc.

I don't think we have a rigid formula for pricing, we just know what our buyers will pay for a certain type of house in a certain condition in a certain area. Of course they're going to look at the pictures too, and probably walk through the place. What they will pay reflects their idea of repair costs as done by them, which they can calculate more accurately than we ever could. 

I think you have to move a lot of houses to get good at this. But really, people will tell you what your house is worth. If everyone wants it, it's too cheap. If no one wants it, it's too expensive. 

Sadly, this is the real reality, for real. And you will notice that, if some tenant bolts midyear, and you have another one-month vacancy, plus another leasing fee, you are in the red for that year. 

All (well, almost all) tenant problems in our family portfolio ceased when my son took over management. He often manages to have a tenant ready to move in the day the previous tenants leave. He screens rigorously, so we are not getting damages or nonpayment. He handles maintenance calls too, which we do with our own crew. Etc, etc, etc. No one is more highly motivated to do a good job than one who owns a piece of the property. And whatever fees would go to a PM, stay in the family. 

Self-management is one more reason why it is much more feasible to make a living in REI locally, rather than long distance.

That it's a business like any other, and these days it's a very competitive one. There are cheap and free ways to market yourself, but if everyone else is sending out mailings, you probably have to do that too to compete, and it costs money. 

Wholesaling can be a great business if you're in the right market, and if you commit to it, invest a lot of time and resources and stay with it. But there are a lot of people dabbling in it these days and many of them never move a single house. 

Select half-a-dozen nice compatible colors and paint all your units with these colors.

Always use the same sheen, for example satin for trim and eggshell for walls.  

Keep leftover paint in these colors and save the color names also. 

That way you have a perfect match for any touchup. 

Regardless, don't try to paint a small spot on an old painted wall. 

Also: HD samplers only come in one sheen. If your wall isn't that sheen, your touchup will stand out due to sheen as well as color.