All Forum Posts by: Ron T.

Couple thoughts to add on to the great advice here.

If you advertise and specify appliances are included you are responsible for replacing them when/if they fail. I have a mix of "furnished" and "unfurnished" units. I charge more for furnished units. I also have 2 that will eventually be unfurnished that had appliances in them when I bought them. I rented them out this way "These units are unfurnished. They have appliances in them which i will remove prior to you moving in. I can leave them if youd like but I will not repair them when they fail and they are specifically excluded from the lease."

With the lawn service, if you offer it you open yourself up to issues. If you go out of town on vacation and dont cut the grass that week. What happens when they "hire a lawn guy" (who happens to be their brother) for $100 and deduct it from your rent because you werent maintaining your property. It sounds absurd but there are tenants out there who will do it, and depending on what county you are in judges who will allow it.

As far as pets, I allow pets with a one time non-refundable $1,200 fee due up front. If they have pets I will have to re carpet and that's what it will cost me. Strangely never had anyone pay it yet, but maybe one day. Same goes for yard pets. Yard pets always end up inside. 

Brice Law in York does them.

To expand here is a link to the York Couny explanation:

https://www.yorkcountygov.com/_fileUploads/forms/H...

The example given really illustrates it.

$100K (owner occupied)

4% and  .2142 = $857/yr 

$100k (n-o/o)

6% AND .3916 = $2,350/yr

Almost exactly 3x.

Again varies by county but many counties now have a different millage table

Cheryl,

It's not quite that simple. Several counties, including Greenville, also have different millage rates for owner occupied versus non O/O properties. So the 3x is very possible in Greenville, York, Lancaster, and Pickens counties (among others) 

I have 2 good ones I use close by.

Pm Sent.

I would caution to check out all info given. There are some major flaws in the SC portfolio. It may be a good investment even after correction but some things that are public record (property taxes) are mis-stated grossly.

To keep the conversation going...

I share the vision and strategy you and Alex.

The other argument is instead of having a $100k property paid for, you leverage that $100k (at 20% down) into $500k in portfolio. The additional properties minus their notes will exceed the cost difference of the note on the $100k

However with an expanded portfolio you also expand your risks exponentially. I'll take the sure thing because of spiritual beliefs, but understand the analytical argument behind the other side.

I think @Alex Franks and @Jay Hinrichs pretty much nailed itm, but I will expand just a bit and offer a few different perspectives.

It is a different game and really a different industry. To build ground up you are a General Contractor or are hiring a GC. To rehab/flip that isnt necessary.

The other thing as alluded to is risk. If you buy a $30k house, its hard to do something to that house to render it worthless. You might make it worth $20k mid rehab but it still has intrinsic value to a large segment of the home buying (both retail and inner industry) world. A new construction project where the builder goes belly up half way through, watch those sit for years. No one wants to touch it. Yet you have the same $30k invested and seemingly no value if you cant complete. 

To me green field projects present the most repeatable profits, albeit at a smaller gross margin per door. The challenge I have seen over and over is new home builders always scale beyond the end of their financial boots, and when the pull back happens. And it always happens. Most new home builders lose it all. Then they are back swinging big lumber in a few years on the next cycle.

I really need to get up with Alex though and we have been talking abut it for a few months because build to rent is an interesting concept to me. The final piece of the puzzle is if I save up $100k and want to turn it into $1,500.month, I can do that ion 30 to 45 days. buying and rehabbing. Depending on the area it will take me that long to get a building and use permit to start a construction project.

There is also something to be said for established and mature neighborhoods vs new neighborhood and the inertia of change for both but Ill leave that to the experts...

@Erik Creagh. Welcome to BP.

If you are new to Aiken, let me caution you. I love the area. Love it. 

However you are in a bit of a hotbed for some very shady contractors. Be very careful and vet out any that you use. The worst real estate deal Ive ever been involved with was a should have been slam dunk in the Aiken/NA area. There is apparently an entire cult of fraudulent contractors down there. Something like 8-10 GC companies with the same guy or couple guys as their qualifying/licensing agent. They talk a good game but they are all talk.

It was so bad we went to file a complaint with the Attorney General and once we told them the name of the company they refused to file the report because "there are literally hundreds of complaints and they just keep doing it over and over"...

Hey Chris!

Always good to have another York County guy here.

Send me a connection maybe we can help each other out sometime. Im primarily buy and hold but I've done a couple that way...