All Forum Posts by: Rongsu Qi

Yes I am a current client of Realty Medics and am referring someone out-of-state to them too. I would start by saying no PM company is perfect, as my realtor told me. I have explored a couple other options in the area and found them to be professional and their fees perhaps slightly lower than others. They handle leasing and repairs fast and their repair pricing is fair. What I wish could be different, and understand this is difficult to do, is being able to advertise before tenants move out. They would only advertise after tenants moved out and the property cleaned and fixed, this usually results in at least a month of vacancy in between tenants. Would love to refer you. 

It could be that the roof needs repair. Roofs in Florida wear off faster because of heavy rain storms. A 30-year roof may only last 20 years if it doesn't get damaged by a hurricane sooner. Termite is also a major threat especially to an old wood frame house. You may see concrete block houses selling 20+% more than wood houses of the same size. Knob and tube electrical in an old house may also be uninsurable. 

Hi BP,

We're about to buy a to-be-built house from a local builder, and have a transaction broker to handle the transaction. The contract presented to us is a standard FL As is contract, with the house feature list attached. Is this all that is needed for new construction?

We have purchased a few rentals before but this is our first new construction purchase. We just want to make sure all our bases are covered. Any suggestions/comments? What if the builder takes too long to complete the construction? What if at time of closing the house is not to a certain standard? Should these be covered in the contract? 

BTW there is a builder's warranty. The broker is trust-worthy and has done many transactions with this builder.

Thanks!

To me forbearance is not a solution for landlords. Yes you may not get foreclosed on for the immediate timeframe, but when the forbearance period ends, all the unpaid payments are due all at once. If you accrued tens of thousands of dollars of lost rent during the forbearance period, how will you suddenly be able to put up that money? What happens then? Agree with Scott that suspending all mortgage payments of all primary and residential investment real estate is the only fair way to make sure no one loses their homes due to the virus.

That's why we budget for maintenance and Capex reserves, as well as property management fee, right? If we don't budget for those, a 8-10% deal becomes 15-20% deal. In addition, the stock market has plenty of unexpected downturns and sleepless nights as a result too.

I'm following this thread and commenting because personally, I've invested in the stock market for quite a few years before finding RE. Part of the reason is that any cash flow is nearly impossible in the Bay Area, and I wasn't going to invest purely based on appreciation/speculation alone, like everyone else around me is doing. I thought I've found a far better investment in RE, but got really confused seeing people in this thread say they would rather go back to the stock market. 

I don't think there's a magic formula for a good deal, you have to work with the market and just compare to what else you have available. Am I happy with what I'm getting? Well I definitely want higher returns, but this is the best we can do in terms of any type of investment at the moment, so we did. I would've done BRRRR or look for below market deals if I invested locally.

So what I want to say to @David Waddleton is, we don't live in 2012 anymore, so look at what you're getting in comparison to what you have available to invest in, be it the stock market or other rental properties. Just calculate the ROI in terms of cash down and time involved and compare. Personally I think we're coming to a bear market in the stock market and can't expect as good returns as we did in the past ten years. I see more stability in RE and of course other benefits like loan pay down and rent raise etc. I wouldn't put my money in the stock money if I can find a 8% deal after budgeting for maintenance, Capex and management fees. It's fine if you want higher cash on cash returns, you may just need to move to another market if possible, or be a lot more aggressive looking for under market deals.

I know I'm new to RE investing but I'm shocked by so many replies about the stock market making 7% return with no work. What about the three different incomes from Real Estate that BP has been preaching?  1) Cash flow 2) Appreciation 3) Loan pay down. 

The stock market can only give you appreciation and maybe cash flow if you invest in dividend-yielding equities . And both are completely out of your control. For these reasons, wouldn't you want to invest in RE over the stock market even with the same cash on cash return? Oh and next year when your rent increases by 5% and your mortgage stays the same, your 8% deal likely becomes 10%. Stock market can't do that either. 

I just started investing last year and bought a SFR in the Orlando suburb area for around 8-10% cap rate. That is nearly impossible to find in the area, at least off of the MLS.

Question to the experienced investor here: Since Orlando is considered an appreciation market, with a yearly appreciation of 6-10%, does it change your opinion about taking the 8-10 cap deal?

@Thomas S. Thanks for the advice. I will look up on how to properly clean it up and send my friend who's in the area to do it. Luckily the company agreed to do the inspection for free. 

Regarding maintenance, lease only mentioned that tenants are responsible for the following:

-All electrical systems and fixtures repairs when those are necessitated by the fault or negligence of the tenants

-All doors, windows and frame repair 

-Protection against insect and pest

-Structural repairs from tenants fault

-Routine HVAC maintenance and repair

-Lawn.