All Forum Posts by: Sam W.

Are you permitted to put these large signs up in residential lawns in your town? My town wouldn't permit them (and I wouldn't do it anyway).

"I know what similar properties are selling for in the area and I can offer you $xx,xxx for your property as it sits right now -- and we can close quickly if you'd like. I think its a fair deal for both of us. Is this something that would interest you?"

I'm not a fan of the back and forth of "what do you what for your property" type negotiation. Be up-front. Tell the seller what you want to pay for the property and go from there.

Aaron Ruiz,

Moving above duplexes was an eye opener for me. Granted, besides a few duplexes I only have 1 x 4-family and 1x 3-family so I'm hardly an expert, but here are a couple of my lessons learned with regards to 4-plexes:

- If possible, assign parking spaces and make sure everyone knows the plan. Same with porches, patios, etc. I include a property diagram as an addendum to the lease which outlines sole-use areas and common use areas. This diagram has stopped more arguements than I can count.

- Provide some type of storage/area for bikes, lawn chairs, etc. 4 families worth of outside "stuff" will quickly make your property look like a flea market if you don't give tenants someplace to put their things. Once you assign the storage, then enforce it.

- If you pay water/sewer or any other utilities, get a handle on it quickly. Your water bill will go through the roof in a 4-unit if every family is setting up wading pools (I don't allow pools [ utility cost, liability and health/safety].)

- Figure out which tenant you can count on and cultivate a relationship so that he/she becomes your eyes and ears on the property. Not a narc, but someone who is interest in keeping it a nice place to live.

- Try to keep similar rent for similar units. Nothing upsets the delicate balance of multi-family living than when tenants find out that the folks in Apartment A pay $50 a month less than they do.

- Your biggest enemy in 4-units will be turn-over. Little things make a big difference and go a long way to making tenants comfortable and less willing to move. A security light in the parking area; a clean laundry area; new mailboxes ... all speak to your interest in the tenants and, over the long-term, will pay for themselves many times over in lower churn and reduced expenses.

There are plenty of others ideas, but these are the ones that come to mind right now.

Good luck,

Sam

Ce Mill,

Without knowing anything about your property, the area or the tenants, I can only make generalizations, but if this is a "college rental" you can really go two ways -

1) a short term "flop house" type of situation where you'll have a revolving door on all the units / rooms or,

2) a property where students stay the entire school year and, for many, stay their entire college career.

A very good friend of mine owns several large houses very near the University of Pittsburgh and rents rooms to students. Many of the students stay there the entire 4 years of undergrad (or 2 years of grad school). For them, it is their home and they take very good care of it...but he is attentive to their needs and tries to make it like home.

As Tevis Verrett said, and in my opinion, a two month lease in a college area is asking for higher than necessary expenses. In theory, longer term leases would be ideal for college students.

I agree with Corey Dutton ... don't follow the smart money - and for heavens sake don't try to compete with them. Hedge funds can operate on much thinner margins than we smaller fry can.

Most funds require investors to lock-in for 5-10 years. With that sort of commitment of several hundred million dollars, they can weather more than you can. Besides, they're not banking on current 3-5% cash-flow (that's just gravy). They're speculating on the capital appreciation that they are artificially creating in certain markets. When their target is hit, they'll sell (to a poor independent investor who arrives late to the dance) and move on to something else - leaving a bunch of folks holding overpriced, under-performing properties.

Hedge funds are in the bigger markets -- they just can't spend enough money to make it worthwhile in smaller markets. In my mind, while there is certainly room for small nimble investors in bigger markets, the opportunity is where the hedge funds AIN'T (to paraphrase Corey Dutton.)

Gail Layh,

I have absolutely no vested interest or professional relationship with any property management concern in Cleveland...

That said, Howard Hanna is one of the major players in the NE Ohio real estate market - and they are involved in PM as well.

A good one is Paul Blumberg. His info:

Paul Blumberg & Associates
Howard Hanna Pepper Pike

Good luck.

I'm with Shanequa J. - don't flip but do a lot of rehabs. I'm looking forward to reading and learning.

Tevis Verrett,

I'm right in the middle of drafting a new lease...I'm going to steal...errrr.....borrow your wording.

Thanks

Ce Mill,

Do the "upgrades" have anything to do with health or safety, or are they simply cosmetic or function? Health and safety are "must-do's" cosmetic and function are "nice to do's".

How you handle this exchange will set the tone for the coming months. I would prefer to have the father as an ally vice an adversary.

As Tom S. said, if it is only cosmetic, you do not have to jump because they have accepted the apartment. That said, it is easier to catch flies with sugar than vinegar. One technique (if the upgrades aren't too onerous) might be to explain to the father that you are not bound to make the upgrade but will do so because you want the two women to be comfortable in their new home.

Bill Robinson,

You certainly don't need me to "run the numbers" or suggest the easy stuff, but my back of the napkin math putsyour current combined PI at about $575/month. Refinancing at 5.5%/30yr would be about $422...so an increase in cashflow of about $150/month. You will have the financing costs, etc, but its an easy option.

Only sticking point as you said would be the appraisal. You said you'd be hard pressed to get $100K. Look for a lender who would lend up to 90% LTV (would need ~ $84K appraisal). You'd have to pay PMI of about $35/month, but would still leave an increase in cashflow of about $115/month.