All Forum Posts by: Ron Flatt

Even though you are doing the management, budget for management also.  (you may not always want to or things happen and you may need someone to step in)

Depending on your drive, I would probably go with Option 4.  

on the conservative side, go with Option 1 or 2.  The reason, you have less chance of both being vacant at the same time.  More doors, a vacancy does not hurt as bad.  When I only had one house and it went vacant, I felt it more and rushed getting tenants in (not always best tenant).  Without the pressure you can wait for the better tenant, who will have staying power.  

That is where my Baby Girl is heading in February, for a 4 year tour.  

Can I recommend expanding to the outskirts of Austin.  My sister and brother-in-law, have rentals in Temple.  But I know there are some even closer to Austin that will really give you a better return on cash than Austin.  

I still use the 2% rule on SFR, I prefer multifamily but let I let the 16 unit i had in Bryan I let slip away. They offered too much cash, for me to turn down.

Smart move, investing early.  I would love to hear more about your investor group.  I have considered starting one myself.  I tend to do more buy, fix and hold, but have done some flips.  I just hate to let them go once I have them fixed, when they would work so well for rentals.  Some properties just are worth too much after the rehab, to rent.  So we wind up selling.  

Would love for you to follow me and connect with you here on BP.  

It is always great to have someone to bounce ideas off of or let them bounce the ideas off me.  Keeps both of us sharp.  

Good Luck

That seems extremely expensive for 200 sq ft in Austin TX.  I would get some other bids for a turnkey build.  I believe in safe leverage, building in a vacancy and maintenance etc.  I would get a loan for the structure, but that is my own personal preference.  Use the lenders money and let the renter pay it back.  

Once you get the property rolling, you can use your cash to step out and get the next property, etc etc.  

Good luck

Based on your discussion.  I would definitely sell.  San Antonio is certainly hot, my daughter is getting ready to sell her home since the Air Force is transferring her to Germany.  

The concern with Pool and the HOA is the biggest flags for me.

If you have found a property already in Austin, you might want to do a 1031 exchange.  You will be able to roll your equity into the next property without the capital gains hit and you should be able to find a great property.  The kicker is the timelines to find and close on the next property.

Good luck

I have 1 duplex that is a one bedroom.  The tenants do not seem to stay as long but the rents are great.  I have my maintenance man living in one, so they may make sure things stay more calm, because he reports to me at least twice per week.  

The funny thing is, he is the only one that seems to be late with his rent.  I had to give him a 3 day notice this month.  He put in some more time and paid his rent.  There is plenty of work, but it is hot here in central Texas.  He was going with 25 to 30 hr work week which makes paying rent difficult.   

I would jump on a multifamily unit, if it was priced right even if it was all 1 bedroom doors.  

just my thought

It appears that I am going to get a 2 bedroom 1 bath house close to Lake Whitney.  The problem being is I am closing on another property this month that is taking my cash.  

The opportunity I am offering for a $25K investment:

50% ownership, 

I have a large line of credit on my Lowes and Home Depot cards and can afford the labor to do a great makeover.  

Depending on your situation.  We can flip it and after your investment is paid back and my investment is paid back we will split the profit.  

Or

We will have a buy and hold, where we will re-finance it (my credit will handle the refinance).  Pull enough cash to get my credit cards paid off and pay labor, then pull all of your cash we can.  If we do not get it all back, any balance will draw 10% interest payable monthly over a set period of time.  I will get a 10% management fee.  At or before 5 years we will sell property and divide the profits.  

If you know someone interested have them call me @ 254-733-3515 or contact me here on Bigger Pockets.  Have references and tract record.  I can show you where to look in public records to find me first.  

Definitely get a lawyer to draw up the JV. It is a well spent $250 to $500. The most important thing is have an exit strategy.

I have done some of these, My last one was structured this way.  

1st - all management, rental etc was on me.

2nd- I provided the investor. a quarterly report 30 days after the quarter ended.

I received 10% of rents received for management.  I was paid for any repairs I did or that I hired a contractor to do.  

He was able to draw a 6% interest on his capital at any time or let it accrue.  (He only asked once for it).  

It was structured to end at end of 5 years. We put it on the market right at year 4. It sold shortly thereafter, ( I did have an option to purchase the property if I gave a 5% premium over the buyers offer, I DECLINED). He was paid his 6% APR less his draw, we paid off the note on the property and then we split the cash, the insurance refund and net sale proceeds 50/50.

He doubled his investment and I had a nice little bonus too.  

I have had this happen before.  I have thrown in a day sometimes two.  Anymore than that, I pro-rate the rent.  I add an addendum to record the early move in and pro-rated amount.  

Some just have a weekend off and can move that weekend, but also sometimes they were being put out of their last rental, that you did not catch.  Some renters will slip by and get to you.  

I also agree, if you start with giving little things, they will be asking for more later.  Set the perimeters early and let it all be in writing.

Welcome to the Bigger Pockets, I am south of you in Hill County. I have bought and sold on owner finance. Bought REO, thru online auction and at courthouse steps. I am mainly a buy and hold, but looking for anyway to make a property to make money.

Most of my holdings are in a corporation that I own 1/3 of. Then My wife and I have properties outside of this corporation. I have JV with other individuals.

I say all this to let you know that I am here to answer questions for you.  There is a wealth of information on the site.  Individuals will be willing to answer questions for you.  I never tried house hacking but I can see the value in it.  I just do not like neighbors, I would prefer my tenants to have neighbors, I will stick to living in the country.  

Again Welcome and have fun