All Forum Posts by: Robert Smith

I see this is a fairly old post but if you are still looking to purchase a short term rental here in Gatilnburg or the local area let me know. I am working with some investors I manage other rental property for and we are running into the same thing, profit lost mainly due to fees. A large reason for the higher fees over traditional management fees are the taxes that have to be paid when doing short term rental business. In Gatlinburg there is also rental tax FYI. There are a few on the market now that are pretty close to right for purchase price but still a few stilling on the market over priced. The second home market is coming back but not like it was, people are still paying full price to rent them out whether nightly or weekly. I have a lot of experience in beach front rentals and basically the same thing. 

I know this is an older post however I will answer it and hopefully help you or someone else out. If you are out of state and have a business you can file a certificate of authority to transact business in TN without starting a company here. Members and/or managers are not required to physically reside in TN however if you want to form an LLC in TN the registered agent office must have an in state address, no po box. When in doubt call the secretary of state, they are actually helpful there.

Its too long...way too long. Simple is better, less is more. There are a lot of good templates online and in the forums if you dig around a little bit and find some. Most of my yellow letters state "My wife and I are looking to buy our next home and would love to talk with you about purchasing yours. Please call me ASAP! I have cash, will do any repairs needed and would like to close as early as next week." Litterally no more other then my local phone number. And make sure it is hand written. Yellow paper, red ink...its been tried and tested over and over again, stick with what works. Response rate is higher because you are not trying to pitch them, save all the numbers for the homes on the market with agents that you are doing an offer blast to and understand what you are talking about. A seller only wants to know their home is sold and sold quick and with little or no hassle. Peak their interest, and when they call set an appointment to see the home don't try to sell them on the phone. It is harder to say no in person then it is on the phone. They can't hang up when you are in their home. If they are out of town, get in the home and show them you mean business, then send them a cash offer to purchase, discuss once the offer is in their hand and you are on the phone with them. I like to email if possible so we can "look through it together". Try it out and see how it goes. Good luck 

Are you desperate to get rid of the home or know them personally? I stay away from multi tenants. It creates headache is issues for you and everyone else. They may be friends now, but in 3 months when one don't pay his portion and they don't have it now you have to evict all of them. Either make one overall responsible for the entire amount or don't do the deal. If you do the deal, have a clause that does not allow them to sublet or swap tenants without a new lease. I would get an application on all of them along with their drivers license, next of kin, place of employment, and full credit check per individual. Save yourself the hassle and headache and keep it out there for another week or two and see what happens. Legal zoom is a generic boiler plate blanket set up and usually just good enough to make you feel protected with many loop holes. Many attorneys or real estate property managers can draw up a lease for a minimal fee not only specific to your start but also specific to your individual wants and needs. If they want to place bad enough ask them to split cost with you since taking a chance on them. What can you legally charge in late fees per month, how long do you have to wait when giving them notice for nonpayment before you can file a detainer warrant, can they waive that right, what type of insurance will you need and will it cover this situation, states and local customs vary greatly and can be answered by a local professional who is trained and on the ground where you live. My $.02 says don't do it unless you have no other option. Also 4 adults utilities are going to be much higher then a family of 4 more then likely, and if you ever wanted to sell the potential for a family to buy the home over multiple individuals is greater. Its business, nothing more. Good luck whatever you choose. 

132 in the last 12 months is actually a fairly low turnover for a farm list, I personally as an agent and as an investor would not farm it. I want a turn over rate that is high (closer to 10-15%) especially when getting first into a neighborhood. Pick an area you know that everyone wants to be in, could be due to schools or jobs, park or new shopping or employment coming in that area. I only market to people who have equity, if they have to pay to sell their home are they really going to want to pay you 6 or 7% without trying to FSBO first? I personally like out of state owners if you still come up with too many homes to market to. If your MLS includes rentals take out any home that recently rented or look on hotpads and zillow for that info. Drive the area and know the dump homes from the nicest homes. Pick homes in the average purchase price range, not the price range you want your commission check to be in. If an agent lives in that subdivision it may be harder to get in the subdivision if they are a top producer. Look and see per farm area what agent sold the most and if everyone when to them or if it was equally divided, that will save you some money. Become top of mind. Don't just mail saying let me sell your home, they want to know that you care before they care what you know. Send out news letters or local area happenings. Visit yard sales in the neighborhood and get to know more people if that is going to be your farm for the next 6 months. I only market to people who bought at least 5 years ago, have not refinanced in the last 5 years, are out of state or non owner occs, and have a tax value lower then the resale prices in the area. Nothing is a sure thing, but follow up is key. Mailings like this have a low rate of return, expect that but press on. Put them in your sphere and make them remember you. Everyone does one small post card that looks like junk. Spend a few extra dollars on a hand written letter and envelope. Put a mint or something bigger in the envelope so it stands out. You can have a VA do a lot of the leg work and gather a list for you, they can even stuff envelopes and mail for you. Check out the rate of return on hand written envelopes compared to a generic post card, it is worth the extra $.50 per mailer. Good luck and stick with it if you start.

It may be super old school but when working on a small budget I would pick out the homes with the most equity and go knock on their door. I would also keep a pack of yellow notebook paper with you and pass out yellow letters when driving for dollars. Different markets are working with different letters and lead lists. For me expired are drying up but there are still notice of default leads. No matter your market there will be some 90 day lates you can mail to as well as out of state no mortgage sellers. Some investors don't like to do this, but you can always approach probate and estate cases, on that note there is a right way and a wrong way to do everything. Do what no one else will and you will soon be able to do what no one else can. Youre thinking outside the box, keep going. If your market is small expand your radius. Find a niche that you know and can work well with and go from there. Get personal with your leads and show them the benefits of selling instead of the hassles of hanging onto a property. Go through your scripts and role play before a hot seller calls you so that you are not practicing when your money calls. Good luck 

You could follow him around or lojack his truck....
I would go to the enforcement office or see if they have a website for people who pull permits. This may not be people that he spot checks due to tall yard and such, but it would give you an idea of who is doing what in the area and put you in touch with sellers you may be able to work with prior to them improving the home, or investors who improved the home and ready to sell and may be willing to buy another one...from you. More then likely there is more then one inspector in your area, if at first you don't succeed.... instead of only talking with them on inspection day try showing up a few times a month and "educate yourself from their expertise" at their office. Make your face the one they think of when they pull up to the home with 15 cats or the tall yard. Youre thinking outside the box so you are on the right track. Relationships and new team members in every field can be invaluable. Good luck

For one, auction.com lets everyone in the world (literally) know when something goes up for sale. It used to be that only the diligent and prudent knew when something was coming up and where to be (hard work pays off kind of thing). Sort of like my complaint with the god awful TV shows that make it look so easy and that we are all making 100K in 5 days per home. It drives the prices up and before these larger auction companies came on the scene we were able to work closer and easier with the lender to put deals together. They should not have made the loan in 80% of the bad loans coming up for auction and when our cost goes up the overall price of a home goes up putting a lot of the lower priced owner occupant buyers out of the market on a resale. Everyone has their own formula but most of them come back to the MAO (Max Allowable Offer) formula. When looking at any deal, depending on your exit, you have generally the same numbers. My max allowable offer for a home usually looks something like ARV-cost to sale-repairs-profit=max offer. Cost to sale generally is about 11% of the resale price when you figure commissions (6%), buyers closing cost (3%), your own closing cost (1%), and misc repairs and home warranty (1%). Plan for the worst and hope for the best. Some investors are happy with 10 - 15K in profit however most are looking for more. If you have an unplanned AC unit go out there goes half your profit if you are only planning to make 10K. Repairs always cost more so go ahead and add another 10% to any number that you come up with, and by you come up with I mean 3 quotes from 3 different repair companies. Don't use fly by night fixit men, go with a trusted team in the area who won't bankrupt and rob you blind. Just because a home is off the market may not guarantee equity, trust your numbers and formula and don't do a deal just for deal sake. Talk to friends, family, print up and hand out we buy houses cards to everyone you know. A deal will come if you are putting it out there but it takes work. Watch the news paper and read these forums on how to find deals. There are many different ways to purchase a home and many ways to find sellers. I may even look at finding a wholesaler in the area who is willing to work with you. No reserves and needing financing does put you in a position that you may have to pay slightly more then someone paying cash but that does not mean you have to take any deal presented. Take emotion out of it, this is a business like everything else. Good luck, let me know how it goes and keep educating yourself.

Ditto, do not close. Unless it is a screaming deal and you can afford to replace the 2K, 5K, 10K worth of damage she could do out of pocket. I would have put that in the original offer to purchase, or at least in the amendment after the inspections, you hopefully knew about this by then. If they damage the home for the current owner they should be taking them to court already. Without at lease they should receive a 30 day notice then have to move out. It is an unfortunate situation with the death and such but they should have their application and information on file to be able to go to serve notice and evict if needed. 

I would have to say it depends on his company and your agreement. Everything is negotiable. For the homes I manage and have managed for me in other areas the repairs are done then invoiced and paid out of the next rent. At the end of the year there should be a profit and loss statement provided for your taxes and tracking expenses. Most vendors work on a net 30, they do the work then get paid later. I am always a little weary when paying before any work is done. I have seen many owners get messed over in a similar situation. If they can't work with what you want talk to their broker in charge or talk with another company in the area. A flat fee is standard for everything you mentioned however flat fee for repairs is not standard. Look at holding some money in reserve out of the first months rent for minor repairs. Standard in my area is $200. As that money is used up it gets replenished with the next months rent. Helps you on a short month and to break up the expense, also allows the manager to have funds if an emergency comes up and funds are needed asap.