All Forum Posts by: Royce Talbo

@Julie Berks I dont have kids yet, but I feel you should always start with the bathroom.  you can live without a kitchen or living room for a while but, you need a toilet.  if the bathroom needs lots of work(plumping, toilet, shower) pay someone to get it done fast before you move in. flooring, vanity, painting, ceilings, trim can be done by yourself to save money.  everything else doesnt really matter what order you go in, but you should do it one room at a time to contain the dusk etc to one place. trying to do multiple rooms at a time will only get dust on everything and its impossible to clean all your items and be dust free.

@Jessie Saribay Jr DONT DO IT.  you are putting your parents in a very bad place if you do this.  like you said you are new and you dont know what you are doing yet.  your parents want to retire soon right, if anything goes bad they could lose the house.  if not they would have to postpone their retirement, just so that you can have capital to start.  we are at the top of the market right now so trying to start when you are new doesnt make any sense. the chances of you losing money is very high.  if you were experienced then you could do this as you know the pitfalls, know what a good deal looks like and can calculate contingencies to cover when things go bad.  it takes years of learning and know what you are doing.  i guarantee you many investors will lose a lot of money in our next recession because they only started couple years ago and are gung ho leveraging more than they should or bought over priced property thinking things will keep going up just because they have been successful in an up market.  

I suggest you have your parents refi to consolidate their loans since rates are so low right now.  or they could get a heloc, pay off all those loans and do the sweep strategy.  then after they could partner with you 50/50 on a project later on when the market is lower and you learned more. they being the capital partner and you being the partner that does everything.  this will also give them some extra money during retirement.

idk if i should tell you this as it might encourage you to go against my advice, but you can get a 250k deduction from capital gains if you live in the house 2 out of 5 years like it seems you do. if you are married then its 500k.  also read more in the gift tax, you dont actually pay anything as their is a yearly gift limit and then there is the lifetime gift limit. so once you use up the yearly you start dipping into the lifetime which is something like 11mil. once you used up everything then you have to pay tax. like i said it takes years to learn this stuff and even after 30 years you will still not know everything.  dont gamble with your parents retirement.

side note if you do this on your own you will be a better investor than if you were handed the money and you will feel more accomplished, good luck.

@Account Closed there are many strategies when it comes to real estate. there is no such thing as sophisticated investors, just experienced and inexperienced investors with different strategies.  Im not sure what your family or work situation is, but there are couple things you could do.  if you own a house in PC and work in town. look at how much you could rent your house for vs how much you are comfortable renting a condo for in town.  for example I could rent my 3bd/1.5bath for $2300 where i live and move to town and rent a 2bd/2bath condo with similar sqft for $2000, thus freeing up $300/month and no traffic.  its just me and my wife so we dont need 3 beds.  

you could also do live in flips, where you find livable but deferred maintenance property below market and fix it slowly while you live there.  you are not constrained to time like a regular flip and paying high % for hard/private money lending.  you can do conventional and just put little down.  as you fix it up, you add value, plus the appreciation from the market helps.  then when you are ready you can sell it and do it again and dont pay capital gains up to $500k because you lived in it for 2 out of the past 5 years. right now the market is at its peak the only thing keeping it high or going up is that the fed keeps lowering rates.  so to do this strategy you would have to find a good deal and hold it for a while, but everyone need a place to live right so why not make it an investment.  when its time for the next project, you have to evaluate your property.  is the principal paid down enough that you could refi, rent it and cashflow or should you sell it.  remember there is a reason why hawaii is so expensive. lots of demand means higher prices, higher prices means less people can afford, which leads to more people renting, and then less rental inventory leads to more rental demand, lead to higher rents.  

another option is to look at c/d neighborhoods here. they cashflow just as well as the midwest and they appreciate more, but they do come with more work.  this is more for the experienced investor.  I wouldnt recommend this till you had a few rentals and get your system down. then you can modify it to fit lower class neighborhoods or use it in the mainland.  I always recommend to new investors get your feet wet at home and then if you want to invest OOS then at least you have a system in place and can modify it to fit the area you are interested in.

good luck!

It seems like the best way to go is american standard toilets, delta shower,  moen faucets.

@Matt M. I think Toto are great toilets, buy not for a rental.  Their draw is that they are a bidet toilet.  

@Vanessa Ganaden No it wasnt meet Kevin.  I watched several of his videos and he is a guru that gives some bad info.  I dont mind people making money off of information, but when he misleads people and make money off them, it just irritates me.  it seems like now days people think making money on social media and fake it till you make it is ok. selling people info as they learn along the way is a bad practice.  You should first become an expert on something then you can sell correct info.

@BOB CRANEY thanks I never heard of that brand.  ill look into them.  

@Anthony Wick I feel like we hijacked this thread enough so ill leave it at this.  If you are only screening tenants as good as a property manager is(meaning only on paper), then thats not good enough, it needs a personal touch. you can judge them on everything that is not a protected class, so why not judged them on what type of job they have, how they dress, what kind of car they drive, how they discipline their kids, their mannerisms etc.  when i do a showing all persons must be present, so i can judge all that will be in my property.  

I treat rentals like a business and I am hiring employees. I want the best and when i get the best i take care of them.  just like in business if you take care of your employees they will take care of your business.  take care of your tenants, they will take care of your property.  treat them like they are a pay check, they will treat your property like a rental and not a home.  build a relationship with them and they will take care and leave on good terms.  same like if you borrow something from a friend, you will take care of it and return it in good shape vs if you rent something from the store you will not care, abuse it and return it in ok shape.  When people form connections they dont want to disappoint the other.

@Jim K. interesting, i thought peerless looks kinda like delta. After reading your comment ill look more into Moen.

@Matt DeBoth lol maybe when i have enough properties to have my own plumber I might switch to Moen.  Right now I only have a few units and usually do all my own work. How does the warranty work if they already have part on hand?

@Matt R. Good idea on just keeping a spare for the next unit. I still dont have many units so I am still trying to find the best items to streamline.  as for the warranty on commercial i think its something like 5 years or 10 years. i know they have several different tiers.  Ill have to look into Delta, if they have a good warranty like Moen. since i do all my own work i can just pick up the spare part at HD or Lowes and start storing and streamlining Delta.

@Joe Splitrock Like I said it would raise red flags.  If they had any gap and said they were staying with friends or family that would raise a red flag.  why would they be with family or friends for months and couldnt find a place?  If they had to stay with family that long most likely they couldnt afford rent and would raise a red flag saying they probably dont have stable income, so i wouldnt rent to them. in my market anyone who raises any red flags are disqualified and i move on.  

I was watching this guy on youtube and he was talking about buying Moen for his rentals.  his point was that you are paying for the labor anyway, why not go with something good.  He also mentioned that Moen has lifetime warranty on parts, so when a tenant wears it out you can just get a replacement part and its free.  

I love Moen in my personal home, but dont think I would go with it in a rental because if something breaks I cant be waiting on a replacement part. I will just go down to the store and get a replacement myself.  Also the warranty doesnt cover misuse, incorrect install, etc.   In my rentals I usually put american standard, as I see it in lots of hotels and commercial places. I figured if its good enough for high traffic, its good enough for a rentals and I havent had a problem yet.  I tried Kohler before but doesnt seem to hold up as well.  

What are your guys thoughts and have you guys tried other cheaper brands that hold up?

@Anthony Wick I just say its not worth it because you will be using the deposit to cover any damages and to nickel and dime them like how your post seems to suggest will amount to very little after the deposit is depleted.  then you have to go to court and waste half a day or more just to get heard and be awarded.  To me it seems like you would be stepping over a dollar to pick up a dime as nothing in @Tim Phillips post suggested that there is heavy damage.  your time is better spent getting the place rent ready and filling it. chalking it up as a loss, learning from it and maybe screen tenants better or buy in a better place.

@Joe Splitrock @Anthony Wick As far as doing future landlord a disservice or not finding money owed in the background check. I would think that by simply contacting the previous landlords you will find that they did not pay rent and abandoned the property.  If they dont put their previous address and landlord contact or had a lapse in tenancy, then that raises a red flag.  If they use their friends to act as a landlord, you can usually tell by how they answer your questions and again would raise a red flag.

@Andrew B. I agree every situation is different and agree its not really worth it for a little money, but might be worth it for a large amount, but it doesnt seem like that is the case here.