All Forum Posts by: Richard Harrison

Not sure that what works for me would work for anyone else. I don't have a system. I lived in VA for years and know many people there in real estate and construction. So I could call on them for assistance remotely if I needed it. One thing I've always done both when I lived there and after I moved to CA is have a real estate agent screen and present tenants to me. I never directly select a tenant. I meet them afterward and stay in touch and attend to any issues that might arise but only after they've been fully vetted by a third party. This has worked for me; I have never had a tenant issue of any kind and that's probably 90% or more of successfully managing the property. This approach has I believe resulted in long-term tenancy and low-turnover is another key success factor.

I visit annually and usually have lunch or dinner with my tenants and address any concerns. When there is a problem I enlist their help in correcting it: I have them call my local handyman for minor issues (he has standing authority to spend $150 without calling me) or a specialized vendor (say an electrician) for other types of repairs and maintenance. 

I do not raise rents unless I have a new direct expense applied to me and usually not then. I make sure my tenants know this is my policy. 

In short I do everything I possibly can to keep my tenants happy and in place. I would do this under any circumstances. It has worked for me. I probably don't get maximum return on my properties but I do experience minimum headaches. That is of value to me.

A rule I will be following in FL is acquiring in A and A+ neighborhoods. I believe this will decrease my short term return because the margins won't be as good. But I also believe it will increase the longterm value and make it possible to find high quality tenants. I will have a support team in FL similar to the one I have in VA. The one difference is the units in FL will be SFD and in VA I have condos.

If I had tens of units I would probably look at hiring commercial property managers but under ten in a given area with a support team in place negates the requirement for me. PM is expensive and seems to account for a large number of the complaints and problems voiced by the folk here on BP.

None of this constitutes advice - it's what's happened in my experience. Your mileage may vary.

Edgar, my Goal is at least $300/door and as you note rents are substantial in the Largo area. I also intend handling the PM on these myself. I am retired and other than traveling a lot round the world have enough time - and friends in the area I can call on in a pinch - to manage that. I've managed two in Northern VA for the past several years from my home in LA. A side benefit is I'm allowed to write off the cost of one trip per year per property as an inspection/management visit.

I haven't looked anywhere other than Largo as yet and if I can get me 2-3 units there I won't. I've never handled a MFP though would not shy away from one if it came up on my screen. I rent in LA and have been giving some thought to buying a MFP and living in a section myself. 

I'm actually in process of doing almost the same thing in the TBA. Working with $100k. I am in CA and am working with an old and trusted agent/contractor who has made a good living flipping houses there for the past 15 years or so. In my case I'm doing buy and hold or maybe low-cost BRRR. I'm targeting SFD house in the Largo area, mostly 3-4 bedrooms priced in the $100 - $150k range. I'm pre approved for this amount on any single house and for as many as I care to do so long as they support positive cash flow including mortgage expense. I'm looking at no more than 25% down. All the financing just got put in place so we're now in the evaluation and offer stage. It's my intent to hold these properties for a very long time.

I am in need of a real estate investment savvy CPA/Tax Atty located in CA or who is experienced in dealing with tax rules unique to CA. I'm in LA. Any ideas?

The tools on BP are probably sufficient to provide quantitative answers for you but I can tell you based upon personal experience that negative cash flow is not a good idea unless it's purposeful, specifically as a tax write-off. Based on what you've said it doesn't appear you're looking for  tax write-off so what you'd wind up with is a a cash burden chasing presumed appreciation and unless Costa Mesa is an on-fire seller's market you'd probably not experience a great leap in equity in one year.

I own rental property that generates income monthly and nets me about $30k per year as an income supplement. I do not own the apt I live in. I rent. I try to separate my business from my personal requirements. But even so, why rent? The answer for me is portability. The own/rent question generally hinges upon the cost of buying and selling, not the operations (monthly) expenses. If you intend residing in a home for 5-10 years you're spreading those closing costs over a lengthy period. And you're probably - though not always - benefiting from increased equity. When your equity begins to exceed your closing costs  (as well as the extraordinary expenses that home owners absorb maintaining their houses) you've passed break even. You're probably not going to break even on any short-term process.

You might want to look at Plan B. :)

I have a condo rental property in the DC suburbs that I'm planning to run through a Starker Exchange for a SFD in the Tampa Bay Area. The DC unit has been rented to the same tenant for four years now and there is a good possibility he will buy the unit if it's offered to him. If this occurs I'm not sure what approach I should take with regard to agency. I have (and have had for quite some years now) an agent I always work with and have always been very pleased with the service she renders. Under normal circumstances I have no argument with myself over paying full commission because I know what agents (good agents) have to go through to bring me buyers or find me sellers. But in this case the effort may consist of little more than getting the paper work straight.

That said, I do not want to sour my relationship with my agent. I guess I need some help on how to broach this issue with the agent.

Suggestions?

Hi Folks,

Have been following the BP Podcast for some time now more out of curiosity than not but what I've learned is that I really need to get serious about advancing my REI activities. Have had a couple of rental properties for quite some time now but never really treated it as a business. They were acquired more for tax purposes than anything else. They are fully paid for and return steady income for me now that I am retired. It never occurred to me that the equity might be turned into even better income (head slap!). Enough of that!

So I am here to get the business angle on this process and get underway. I intend making my first purchase in the next 45-60 days, hell or high-water. Will be looking around for ideas, deals and support and am more than willing to lend any assistance I can based on the limited knowledge and experience that I have now.

I'm resident in Los Angeles but will be looking for properties in northern and central FL. 

Look forward to meeting some of you around the community.