All Forum Posts by: Roger Vi

Some will tell you this is terrible advice, but I am going to throw it out there anyway because I truly believe in it...

If real estate is your passion and you plan to make it your main source of income one day, the best way to get involved is to drop out of school! Go be a full time RE agent or something where you can see RE transactions on a daily basis. I'd go as far as saying that being a plumber and fixing toilets will teach you more about rental property than going to a 4 year university. 

With that said, what are you studying in school currently? Is it related to your real estate goals?

1031 exchange is where you sell an asset and buy a new one within a certain amount of time. The benefit is no tax on sale. So to know where is the best to invest 1031, what current assets are you currently trying to sell and about how much are they worth?

Triple Net is when you rent out commercial property and the tenants pay (1)net real estate taxes on the leased asset, (2)net building insurance, and (3)net common area maintenance. Essentially, landlord does nothing but collects rent. It is a very nice scenario, just slightly more risks and barriers to entry for commercial real estate. Not impossible though.

Just went and looked at a potential deal that is the first of its kind as far as my investing career goes.

Single family home on a great street in a B neighborhood, historic city. There are some rough parts of this neighborhood, but this block and the blocks around it are regarded as the best in the neighborhood and have been since this city was established in the late 1800s. It is right around the corner from 3 historic 100+ year old mansions that have nearby streets named after the families that built them.

It is a 2 story home with a full livable basement (3 levels total). We have 3 total kitchens, one on each level. Basement = 3 rooms, main floor = 3 rooms, top floor = 2 rooms. 1 full bathroom on each level. All rooms are pretty basic around 10'X12'. Only difference is top 2 have walk in closets w/ slightly more sqft and basement rooms have lower ceilings.

Currently, the rooms are being rented individually as a clean and sober home. No medicare, government funding, licensed employees, or any of that. They are just renting by room privately and advertise as a sober home (from what I understand).

The condition is very good. The entire home was gutted and remodeled 6 years ago. Electrical and plumbing is the same as new construction, roof is 6 years old and good condition, appliances are all in acceptable 6 year old condition. Some are even better.

It is in the appropriate zone to be converted to a triplex, if you locked the doors to the stairs each level would be completely private. Each level already has their own entrance from outside as well.

That about sums it up. 8 bed, 3 bath home with 3 kitchens.

My questions for the people who have seen/bought something like this:

What are the pros/cons? I can see the cash flow this will bring in and have multiple ways I can approach it. My main concern is my exit strategy. What troubles might I run into trying to sell a SF home with 3 kitchens? Trying to convert it to a duplex/triplex? Other than the extra work involved, what problems can arise from individually renting to 8 roommates?

Thanks in advance for all your help!

Yes, there are a lot of ways that criminals become "criminals." Not all criminals are created equal.

Just yesterday, I ran a background check for an applicant. He had a criminal record for Possession of Marijuana 4 years ago. The unit I am renting out is 2 blocks from a Recreational Marijuana Store (I am in WA state). I have no problem renting to this criminal. 

Besides, I don't think I've ever given anyone a reason they were rejected other than, "We had another applicant that was better qualified for this home." I can't see them ever making this one illegal. 

@Andrew Halbert I was such a terrible landlord back then. The guy already had income problems. The reason I wanted to rent to him was because he claimed to be the only one living there. This is a 4 bed 2.5 bath SF with a decent sized front/back yard (10,000 sqft lot, landscaped w/ basketball court). My previous tenant was probably my all time favorite tenant even to this day. She lived there alone; she liked the extra space and could afford it. Stayed 3 years w/ no late payments and no problems. Her move-out condition was actually better than the move-in condition believe it or not.

So when this guy offered to stay solo I was thinking, "PERFECT!" He had income problems, but offered to pay an additional month's rent deposit. If he ever missed rent, I had 2 month's of reserves AND damage deposit; to me that solves being a couple hundred short on the 3X income rule. 

When I saw the dog and friend, I really didn't know what to do. I left that night saying it was ok as long as this isn't a full time thing. I went home and decided that I would just have to do some extra surprise maintenance checks on him. So I would go by monthly to "fix something" and monitor the condition of the home. He never missed rent and I just let him live on for the next year and a half. Never saw the dog again but the friend was there 3/4 of the time I visited.

I got smart and raised the rent the second year, making it clear that there was plenty of interest in the home and he was not my favorite tenant because of his dishonesty. He paid it for a few months but then took off on a short notice saying he had a job opportunity out of state he could not pass up on. He was 5 months into his 2nd year lease. I had no problem with him leaving and ended up taking all the deposits. It was a nightmare at the beginning, but in the end the only loss I had was loss sleep from worries that never came to be. Luckily, a free lesson in land-lording.

@James Cash Thanks man! Really appreciate it! 

@Vy Mai Haha I have a small obsession with formatting text to catch a reader's eye. Honestly, YOU DO NOT HAVE TO WAIT! You can DO THIS on a regular basis! :D

@Dmitriy Fomichenko Appreciate the kind words! It has been a while but I have not forgot about you. As soon as I get get comfortable in my post day job life, I will be looking to see what opportunities a Self-Directed IRA can bring me. Talk to you soon!

@Bhekizwe M. Thank you for taking the time to read this!

@Tim Puffer More success, I love the sound of that! Cheers!

@Jake Thomas Thank you Jake! It wasn't long ago that someone inspired me with a post like this, just giving back!

@Account Closed I love sharing and I really appreciate you taking the time to read this!

@Jeff Sheraton great advice, I just contacted them to request more info!

Do you know if I can sign up as just an individual landlord? No PM Company no LLC? PayNearMe would not let me do this...

Thank you for the compliment and taking the time to read my story @John Van Uytven, I really appreciate it!

If all goes planned, I should have plenty of stories to tell in the coming months :)

@Dolly Caswell You can find some gems on craigslist.

What I do is I post up ads for smaller jobs (replace one closet track set, install a doorknob, replace a garbage disposal) and give them a good hourly rate that most would be happy with (usually $20-30/hour they are more than happy). If they do a good job, I ask them what other skills they have. 

It is surprising how qualified many of these guys are and they just want to make a quick dollar on their days off. And it is nice to get 30-50 applicants in a day (normal) and get to pick through them. No more finding contractors, this way they find you!

@Anthony Chara getting multiple contractors to do estimates is genius, finally found a use for all those sucker quotes they give me!