All Forum Posts by: Ralph Justiz

My first rental was a townhome. It's been great. Luckly, our neighborhood does not have an HOA. I have heard several horror stories when dealing with HOAs and have made it a priority to avoid them at all costs. From the sounds of it you do not have that luxury. My best advice would be if you do purchase a property that has a HOA, try and be involved as much as possible.

I have a family member who recently retired and became the president of three different HOAs in Florida within the same year. He is constantly telling me stories of all the changes he is making to the HOAs and how "corrupt" they used to be. One the brightside because he is so involved he has had several opportunities to purchase properties within these neighborhoods. The residents recognize his hard work and have often given him the chance to purchase properties before the are listed on the market. 

Edit: Before purchasing in an HOA you will want to check and see if they allow rentals in their neighborhood. Some do not or only allow a certain percentage of the houses in the area to be rentals.

@Eric Yee Unfortunately from personal experience and from what I read around here these issues are pretty common with all type of contractors. A system I've developed in my business is I pay 1/4 of the project upfront for the contractor to buy materials and then we develop a weekly "draw schedule" for the remaining amount. I take the amount of time the contractor promised to complete the job add two weeks to that and then divide out what is owed as a weekly check. If no progress is completed by Sunday my guys know they will not get paid. If there is a delay then the weekly amounts become smaller. The last week or two is always crazy despite my best efforts to keep everything on schedule. 

I have never had a contractor run and ghost me but I have had contractors delay projects for several weeks after receiving large checks. Never pay in full until the job is done! It's a lesson I've learned time and time again. Heck I know some people that dont even pay half until all work is completed but I've found that difficult to implement.

Depending on your local landlord-tenant act there maybe some provision that outlines what these tenants would be considered. In OK tenants are considered month to month after their lease expires. If that is the case in AZ I would recommend you make all tenants sign a new lease agreement. If they refuse to sign a lease you can recommend they move out. 

1. Job growth!
2. Price of property taxes!
3. Economic development or what the local government is doing to grow the area!
4. Accessibility to develop a team that can help you!

When I first started out I thought I wanted to "level up" as soon as possible and jump into large MF units but as I've grown I've realised I don't want all the extra headaches of managing all those tenants. I've got my systems and connections in place that I can purchase a SFH and plug it into my business and I really don't have to do much. I'm comfortable with that. I would definitely agree with Brandon Turner's method. Figure out a niche, scale, and decide if you want to level up.

It's really a personal choice.

@Yoel Frometa If you were to sell how much work and time would it take to get you back to your current cash flow? How much would you have to pay in taxes assuming the property was not your primary residence 2 out of the last 5 years? How much would you have to pay to recapture depreciation?  Would that effort be "worth it" in the next 2, 5, 10 years? 

My mentors always advise their mentees to stick to one thing and focus on that. If you already have systems in place to manage multifamily units and that is what your comfortable with stick to that. The good news is it doesn't sound like you have too much vested in duplexes so it shouldn't be too hard to pivot to short term rentals. Both strategies are very different and require different systems to manage them. 

Not every agent is created equal. Just because an agent says they work with investors does not mean that they know anything about investing in real estate. Whichever route you choose to follow whether looking for you own agent or using the one that is assigned to you, you should probably ask your agent:

• Do they work with investors and understand investments?
• Are they full time or part time?
• Do they invest themselves?
• What area of the city do the specializes in?
• Will they make low offers?
• Do they have other investors that they have worked with that can give them a reference? 

I would network with local people in your area. A big part of this business is knowing the right people. Networking has provided me with tons of valuable information and saved me from a bunch of headaches. 

Also save up cash to have a decent reserve for your rental business. Stuff breaks all the time and you don't want to be caught without any moola to fix it. 

It's really up to your personal risk tolerance. I always advise people to pay off their high interest debt before investing especially if it's a credit card or a bad car note. 

Mortgages are a different story. 

The way I see it is the less debt I have the easier it is to save cash to fix my investment when something goes awry. If my cash flow is getting sucked up by debt payments and I don't have the ability to save for reserves I'm putting my tenants at risk as well as my investments.