All Forum Posts by: Sam Applegate

@Dan Thomas That's assuming you need to fly to check out properties you are interested in. With the internet, you can get 85% of the way there using resources like google maps, crime maps, etc. 

It's also important to think about the skills you bring to the table. For instance, I'm great at finance and project management while I'm a work in progress for construction knowledge. So, the chances of me spotting a construction issue or deferred maintenance problem that a trained professional (who I hire) wouldn't catch are pretty slim. 

If I can get a solid feel of the surrounding through the internet, the broker sends me a video of the interior, and trained professional send me a property condition report, what value do I bring being at the property that I can't do remotely.

Now I'm not saying you shouldn't go look at your real estate or travel if you are going to buy a building. My point is that it's not as linear as everyone makes it out to be.

I personally like it because it forces you to set up systems to deal with the inevitable problems you face with real estate investing. For example, you have an issue with a property, if you lived close by you'd drive there and check it out. Since you don't have that luxury, you are forced to pay people who can do it for you. It forces you to turn RE from an active investment to a passive investment.

I appreciate your perspective on the unpredictability of cash flow in rental properties. It's a reality that amplifies the importance of conservative underwriting.

In the last few years, the market became so competitive that many investors resorted to aggressive underwriting to justify their deals. This approach can be risky, especially when unexpected expenses arise, which they inevitably do. Proper planning for these uncertainties is essential.

During your due diligence period, it's important to thoroughly assess the condition and age of all major systems and components in the property. Understanding the remaining life expectancy of these items and reserving funds for their eventual replacement or repair.

Insurance costs are another significant factor. While some increases can be anticipated, the recent spikes in interest rates were unforeseen by many. This has affected insurance premiums and, subsequently, cash flow. 

If you are conservative with your rental projects, you won't need to push rents as high which means you'll likely have lower vacancy.

I'm looking for a software to analyze rent rolls to help with underwriting. Do you have any recommendations? What are the pros/cons of the software you use?

I know if you're underwriting smaller properties a rent roll analysis program isn't necessary but for larger properties it can be cumbersome to go through by hand.

I'm curious to hear everyone's biggest headaches or areas you wish you could change about owning, managing, buying, selling, or researching (etc.) real estate.

What would make your life easier?

@Bruce Lynn great points. I agree with everything you said. Thanks for sharing.

I've been compiling delinquent tax lists from counties across the country. Would you find it useful to share this info or does everyone focus in their own niche/market? I'm also trying to figure out whether it's worth sharing since people also use things like listsource, propertyradar, etc.

I'm more rational and financially minded than most. 

But if there is no debt on the properties and they're cash flowing well, I'd consider buying your sister out. You can refinance the properties and pull out cash. Take the cash from the refinance to give to your sister for her share. You now own the properties and she is free to do what she wishes. 

It'd be a win win. It's important that the properties can handle the debt load though as the debt and properties will now be 100% yours. If there is excess cash from the refinance after paying your sister you could use it to develop the land.

Happy to help with the analysis if needed.