All Forum Posts by: Ryan Scott Isacksen

I talk to the people that are in the market.
The property manager you use will give you an idea of better areas that they prefer to rent in.
(they have to post notices and do showings at the building, so they will advise fairly)

The broker with property listed may give you some advice, though they are selling property so some things may be more positively evaluated.

Google street view can tell you a lot.  Is there graffiti nearby?  Is there a vacant lot no one has felt like developing nearby?  

Maintenance and insurance estimates look low.
Did a management company quote you a rate or is that an estimate?
Management varies a bit and you can run into crazy things like a company that charges to rent their 'for lease' sign.

Did you get a quote on the insurance and does it include 'landlord insurance' - basically a general liability policy and lost rents?

What have the annual expenses for maintenance been for the past 2 years?

Are you sure you can get a 30 year fixed on a commercial (5 unit) property?

Call the tax adjuster and ask what taxes would be if you bought a building for x amount.  

@Michael Tempel,

Spyderwash will set you up with equipment and a distributor that can sell machines as well.
You will need wifi in each laundryroom.

I looked into this for a client of ours, we didn't go with the proposal, but there is an option out there.

Let me know if you need any contact info.

I am not a big fan of rent control overall, but it sounds like your friend's friend is why the rent control laws got put in place.  There is a method for buying people out and there is a poor system of doing increases to help pay for capital expenses.

Claiming wear and tear items as 'waste' and trying to evict an older couple just makes it harder to make the case that we need less regulation.

There are some places where tenants become 'lifers' and I certainly wouldn't buy expecting someone to move out to cash flow.  

I can't afford this market now and do invest elsewhere for cash flow, but I manage here and understand why people buy and the kinds of returns you can get.

Arlen's property he mentioned has tenants in there that are rent controlled judging from the distribution of rents.  Appreciation here in Oakland happens when a tenant moves out and you get to raise the rent to market rate.

It becomes a waiting game, but he will probably see ~$500/month increase re-renting it.

I don't see a lot to criticize in the deal knowing the rental market, housing shortage, and difficulty adding inventory to the area.  

I would strongly advise listening to the advice that @Andrew Johnson gave you.

The carpet cleaning price can change for a specific issue that needs to be done such as dying out sun fading or a spot clean.  Did you have the unit when the previous tenant was there and was there any deposit withholding for these things?

Is this an apartment building or single family house?  

I would suggest getting the phone numbers of the people working on the place and speaking directly to people doing the work.  A month sounds long for a turnover unless you are doing a remodel with cabinets, counter-tops, etc., the place is large, or there is a lot of carpentry work needed to adjust specific items in the place.

Is everything being done in house?
Is this an old building with room doors and cabinet doors that need to be shaved down?

Did it need updated smoke detectors and are you using 10 year life battery detectors or 9v battery operated?  
Did outlets need to be replaced?

If you are tracking things down to the increments in the price changes, do you know the details of everything the unit needs? 

If you don't already know these things, it is going to be hard for you to make an intelligent decision about approving small price changes.

You will also likely end up being charged a lot more for work if you have to wait to get estimates on everything.
I had a vendor at the supply store that could have picked up a tub that a unit needed.  The owner wanted prices for 3 different types of tubs, then finally wanted the initial price that the tub was offered at.

The problem was it took 3 days back and forth for the owner to decide on the tub and the initial price quoted was from the guy while he was at the store.  He doesn't go back to the store for free, so the unit had 3 additional days of downtime and the price was higher.

You are going to have a very had time working with a PM and will cost you more money in the long run trying to save $100.

Welcome to turnovers.

Part of the issue is that the work is being done with handymen, not contractors.  Handymen and management can give an estimate of expenses, but when turning over a unit, various problems that are unforeseen can come up.  The PM won't even know the full price of the project until all the receipts come in from the handymen and their hours are totaled up. 

That price you stated sounds pretty standard for a turnover.

You should need to request licensed contractors and sign price quotes that they would need to do a change order to up the price from.    The other option would be to find a handyman that you are comfortable with that can give you estimates and send you text messages as things come up that you manage directly.

Hi @Amanda Major,

Many people rely on professional managers.  You can save a bit of money doing things yourself, but I would make sure it is a good deal even if you cannot do that.  You are in a good position to know the costs of maintenance of the building and will just have to add the rough labor rate of the area into the repairs. 

You and your husband will be able to review reports from a manager and have a good idea if something is out of place on billing.

I would just do the numbers on a lot of deals and estimate 10% for property management and use your experience to estimate the ongoing maintenance.  50-60 minutes away isn't too bad, just not close enough that you want to go out for small items.

I would use caution about the rental sites estimate for rents.  I think the site you referenced only uses data from the places that market with them, which are higher end complexes.  Look at Craigslist ads and Zillow ads in the area for comparable buildings and unit makeup / age.  More importantly, talk to the property management company you plan to work with about what you can realistically expect.

I assume you have a management company that quoted you 5%.  They can help you with rent expectations since they are advertising rentals in the market regularly.

Can an insurance broker.  You want to at least coverage that will pay out the loan if there was a total loss.
I would also ask about landlord's insurance that covers loss of rents and offers liability protection.  A local insurance broker can offer you what works well for your area.

@Claude Sicard,

You will probably benefit from reaching out to some people in the area of the market.
I would call up a broker or two and find out what cap rate things are typically selling at.

You can also reach out to some property management companies and get an idea of their rates and expected expenses for the area.