All Forum Posts by: Brad Larsen

@Jeff C. Volume pricing still does not get volume pricing! We manage near 900+ upper end SFH's - and good vendors are difficult to find and keep....especially legitimate vendors with licenses and insurance. The upper blue collar (plumbers, AC, electrical) are easier - "make ready" specialists working flooring, paint, and basics are tougher. I did see some fair pricing above quoted on round figures.

I would also point you to speed of completion as a big factor.  We have seen this MANY times from out of state investors who we get quotes for on make ready's for their rental homes where they can't believe / understand the pricing.  I saw one investor fly out here himself, illicit his family to help him with work and completed his own make ready in 90 days.  Good for him!  Except, we could have done the work here in 9 days.  

In the effort to "save" money - he cost himself atleast two month's of rental income.  I hope you are considering this during your shopping phase.  :) 

@Jake Hobson Good luck with pending move to San Antonio. Many people are envious of your opportunity for Uncle Sam to place you here, move you for free, and give you a zero down VA loan to buy a home.

CASH FLOW:  Who Cares?  Are you putting money down?  Probably not, so be thankful if you can break even when it comes to renting it.  

DEPRECIATION and TAXES:  You are missing the magic pixie dust that is tough to quantify, but really makes everything worthwhile.  Taking depreciation, paying property taxes, and writing all of that off on your income tax.  This is where you create your own cash flow.....while someone else is paying your mortgage.  

BREAK EVEN:  If you can break even every year for 5 years, watch what happens to your spread.  You will see 3-7% appreciation and pay down your loan every month.  Snap your finger, 5 years later, and you have real equity.  Fast forward 20 years, you could have a paid off property.  Now....rinse and repeat as much as you can.  

TEXAS:  Embrace it!  We love it here. 1,000 people PER DAY are moving here.  Fill in the blanks as to why.  

PURCHASE:  When you arrive, buy a home.  Find a good rental neighborhood.  Look for the 3/2/2 or bigger home between $200k and $250k.  Anything UNDER $200k is a bidding war right now.  We sold a home that was one story, 3/2/2, 1200 SF, and $149k list price......TWELVE offers in less than 48 hours.  Because of the price point, anything that hits the market is getting gobbled up.  

@Steve Rozenberg  Steve - thanks for the mention! 

@Charlotte Kelso  Hire the right folks to assist you and it starts with a Property Management company.  A good one can 1) Sell you a great property.  2) Manage that property to increase it's value.  The concept of eating what they cook is easy to understand.  They will not want to sell you a dog.  Also, look for currently occupied rental properties as pre-listing or pocket listings.  Those are already performing with all the metrics needed.  A true turn-key.  Hope this helps! 

@Cindy Veit  Would recommend looking into forming a Trust - and placing properties inside of that.  Atleast weigh the differences with a local attorney who can advise you on that formation with the pros / cons.  Hope this helps! 

@Alan Grobmeier  That is the reason to find and hire a good Property Manager.  You are wasting your time doing $20 / hour tasks when you should be doing $2,000 / hour tasks in finding the next 10,20,30 deals.  First, get out of the mindset that no one does it better than you and then accept the fact that everyone else will perform what you do to only 80% of your standard.  Read the book 40 Hour Work Year by Scott Fritz to gain some insight on letting go of that mindset. 

This makes total sense.  One bad PM who is on their way out of doing business in a war zone some people call Detroit....and ALL PM's now suck.  Wow.  I want to edit my first statement to indicate YOU are a "C" Class or worse landlord.  Don't think that is fair?  Neither is insulting our industry and our country.....under which you have the landscape to become an "investor".  @James Wise @Nathan Gesner

@Marisa R.  It would be helpful for you to read this article on what Property Managers would classify investors.  I'm not saying you are in any category, but a little self-reflection may help in your dealings with US based PM's.  Also, I have been to Australia and spoken at their PM conferences - there is a difference.  But, for you to make that blanket statement is unfair to our industry and disrespects our country.  

https://www.biggerpockets.com/forums/52/topics/402958-investors---are-you-a-c-class-landlord?page=1

@Nicholas Seaver   Look for Robert Brown or Trey Gowdy here in San Antonio.  They can handle anything Real Estate related and have used Robert Brown a lot.  

Awful advice on home warranties.  Never heard of worse advice to provide a good service and keep good tenants.  "Here - YOU fix it!"  Recommend never touching a home warranty for a rental property.  

Self management is a viable option as long as your brokerage allows it for your personal homes.  Some realize that there is a minefield in property management between fair housing, repairs, security deposits, insurance, etc....  Brokers may not allow you to manage.  Assuming you have gone through that permission seeking, you could do this.

My next point would be - WHY WOULD YOU SELF MANAGE? 

If you are wanting to invest and buy / hold more - go find those deals.  Pay someone $20 / hour so you can go make $2,000 / hour with the next deal.  

Also, recommend never selling.  Have you looked at the magical DEPRECIATION numbers yet on your tax return?  That may change your mind as new investors never realize the true value of that.  Make sure you are accounting for it with your tax returns.  Your break even is a good thing.  Depreciation and appreciation make the investment strong.   

Hope this helps! 

@Scott Goulet Scott - you are screwed. There is no "winning" against HUD no matter how right you are. Offer to pay the tenants $1,000 to **** off til the end of time. You will spend 10 x fighting it and HUD will find other things wrong. Make the PM Company file an insurance claim with their E&O carrier on the matter or they can split the cost with you. I have been through the HUD / TREC / IRS audits and there is almost always more they can find if they want to. Those losers have the crap job of justifying their own existence by making examples and charging fines. Sorry to put it so blunt, but get out of this as just cost of doing business the cheapest manner possible. The tenants know the game and you are the victim on this side. Just remember, what comes around goes around so find ways to offset the cost.