All Forum Posts by: Sam Applegate

@Ryan Brown

As mentioned on the previous comments, it really depends on the state and its laws. But also, think about the situation. If a family member is living in the unit, paying rent on time, and taking good care of the place, maybe it’s worth keeping them happy. It could save you the trouble of finding a new tenant and dealing with vacancies. Sometimes, having a reliable tenant stick around long-term is more valuable than pushing for an extra $100 a month.

@Jorge Abreu

Thanks for sharing. This is really interesting, and I agree with the benefits of seller carry.
How often do you get sellers to agree to carry a note? What tactics do you use to convince them?

@Steve K.

From my experience, it's more important to find a broker who specializes in your unit count rather than new turnkey properties. I'd suggest finding the top sub-institutional brokers, building relationships with them, and letting them know what you're looking for. This is more important than trying to find a broker who specializes in new construction. If you can clearly communicate your needs, they'll likely be able to find what you want.

@Ryan Brown

I agree with @Kevin Sobilo and @Joshua Christensen. Also, remember that New York is very tenant-friendly. It's a good idea to consult with a property manager or do thorough research on landlord and tenant rights, as situations can become litigious quickly.

@Andy Ramos

How much are they charging you per month? Property managers usually have a placement fee and often a renewal fee too, but it's generally not a full month's rent for renewal. It's more commonly a flat fee or maybe half a month's rent. You should be able to negotiate that, though.

It's pretty common for high-end property managers to charge around 10% of gross revenue, plus one month's rent for placement, and some sort of renewal fee. Personally, I find that a bit steep and would probably look for another company. But if it's a single-family home in a remote area, it might make sense because they need to make it worth their while to manage.

@Karolina Powell

A great way to start is by having a property manager tour the property with you. They can point out everything they notice and give you estimates for operating the property.
I also like to include a couple of checks in my underwriting to make sure I'm being reasonable. For instance, I'd recommend understanding the average expense ratio for similar properties in the neighborhood. This helps ensure you're including all the appropriate expenses. A property manager can also help you with this. It depends what state you're operating in but often times they're ~40%.

@Karl Hudson

Is there equity in the property? If so, consider refinancing. This will allow you to pull out cash at a lower rate and use it for the improvements.
Are all those improvements necessary today? Can you do one a year and use the cash flow from the property to pay for it?

Whether utilities are individually metered or master-metered makes a big difference. If each unit has its own utility meters, tenants can handle their own utility bills, so the landlord doesn't have to worry about paying them. But if the utilities are on a master meter, the landlord has to cover those costs. In that case, it's important to check out the T-12 (trailing 12 months) financial statements.

Looking at the T-12 is key because utility costs can vary a lot from one property to another. For example, single-pane windows can make heating and cooling more expensive compared to double-pane windows. So, it's a good idea to really dig into the T-12. If the property is master-metered, consider setting up a RUBS (Ratio Utility Billing System) program to bill back some of the costs. Just be aware of your state's laws, as they can differ on how much you can bill back to tenants. If the property is mastered metered, I use the total utility bill from the T-12 as the estimate in my pro forma.

Hi Garrett - Great that you're trying to learning real estate investing! I have created a learning platform that I've used to train my team members. DM me a little about yourself and what you are looking to accomplish and I'll see if I have something that can help.

How much can you rent your current house for?