All Forum Posts by: Sharon Rosendahl

@Gil Segev

We have selected 2 properties so far. They are both being rehabbed and I am closing a 1031 so haven't bought them yet but will buy sight unseen. My realtor is walking both. We are looking for a 3rd property. He will walk that for us too. He takes pics and send them to us. It is about trust, he specializes in working with investors. If he doesn't do well for me he might make a quick buck this time but I won't refer him to others and won't return if he is doing a bad job. He is in it for the long haul and wants his investment client to return regularly.

If you don't have boots on the ground that you feel good about then maybe you need another team.

Also, look around different areas of your own state. TX is a huge state with many good markets. Being closer to home will let you check things out yourself. I was invested about 5 hours from home but in my own state. That meant I could get over there when needed. It also meant no income tax (WA doesn't have income tax). Staying in your own state allows you to deal with fewer tax laws than when you are in other states. I used to have to file multiple state returns and it is an added expense since I pay for tax prep.

Good Luck!

Sharon

@Gil Segev

I was lucky on my out of state searches. First off, I have had realtors recommended to be by other BP users. So far, I have been happy with the two I found that way.

This foray into house hunting I was able to get a reference from an investor friend to her investor friend who referred me to a realtor that so far I'm pleased with. referrals are the way to go as I have found that many realtors may be great for the homebuyer but not for the investor (bad experience with that before). 

I guess affordable is in the eye of the beholder, I am looking in TX for my next purchases because it is much more affordable than the west coast, and more landlord friendly.

Good Luck!

Sharon

See if there is a landlord association in your area. We have the Washington Landlord Association for my state. They charge about $100 year and provide us with a lot of info about our laws and have a lot of documents and other help for landlords. Likely they have something similar in MI.

You are here at BP. There are loads of resources both in your state/region forum and also the landlord forum.

It is critical to vet your tenant well. That will solve a lot of potential issues. One of my background check resources regularly offers classes and newsletters that pertain to landlord issues.

Meetups are also a great way to learn more about being a landlord and investing. I even have a meetup through work as I work for a very large tech company that has interest groups.

Good Luck!

Sharon

@Richard L Smith

Is this rent amount confirmed? I don't know your market but that is high compared to the purchase price. Assuming your purchase and rent are accurate I suggest that you include approx. 5% for vacancy. Depending on the market, it could be higher, once in a while a little lower but likely never 0. Even in my hottest market I will have perhaps a month of vacancy between tenants but luckily tenants tend to stay several years too. 

Depending on the condition of the house, I would use at least 5% for repairs. Brand new house you will still have repairs as tenants can do damage or even wear and tear will eventually cost you something for new carpet and paint. 

Depending on the condition of the house, I would use at least 5% for capital improvements, you will someday need a new roof. Brand new house, may need a little less, older house more to a lot more.

You have no other expenses besides your loan amount. Depending on what is customary in your area that may not be the case. I always pay for basic garbage for my tenants because I want them to throw away their trash regularly. I had one property that it was customary to pay water/sewer on. While you can build that into the rent, rent is somewhat driven by the market. HOA or other community fees may come into play too.

Management fee. I self manage but use a 10% fee to make sure I can afford to use that option. Depending on the property, PM's may make your life much easier and since you are new, you will want to ensure you have that option as you may find yourself overwhelmed.

Good Luck!

Sharon

A few years ago I bought a 1920s and 1950s homes in a small town outside a larger city. No one has ever questioned the age. Bigger concern is the amenities, if they are there then all is good.

ADUs are great if you can make the cost work. The house I live in has an 1100 sf ADU and it pays my mortgage.

I think the lead/asbestos thing is a personal decision. Be aware, if your paint is sticking to the wall fine it has likely had the lead sealed under several layers of non-lead paint and therefore isn't considered a hazard. Asbestos ceiling tiles are also consider safe if the aren't flaking and are intact. So if you aren't doing demo you may not need to worry about this. You will probably be required to provide tenants with the generic lead paint pamphlet but then again, you will likely need to give your tenants a slew of info that may or may not apply such as military service lease laws, domestic violence etc.

Probably my age showing, at 56 I would likely keep the $800 month knowing that at a later date I would still have that equity and be able to sell for something similar (while there are ups and downs I choose not to sell when the market is horrible).

@Brandon Sturgill Yes, it is with an agent. The location is sort of a funky little town. Back in the 20s it was a tourist town that people went to for healing in the mineral lake. It fell on hard times. Then as the bigger city nearby boomed it became a bedroom community. Most things sit for a while because that is just the way it is. This one guy is just a super low baller. I think he goes around offering super lowball if a house is listed for a month or so and then tries to bully the agent. They also required an answer in 5 hours of making the offer. I didn't counter, they offered a little more and then were pissed that I didn't go down to meet their 25k below asking price although that was better than their 65k below asking.

We have had a lot of people want to buy it but they (not the house) can't quite qualify. That is kind of the name of the game in that town, either people have Seattle money and have what amounts to a mansion out there or they are too poor to afford a house. I'm sure it will sell soon. My carrying cost on it is low and since I was in the midst of moving I was good with the wait. Now I'm working on finishing rehab and renting a more lucrative house so still ok with the wait.

@Brandon Sturgill Thank you! I will study this further. I received a super lowball offer on the houses I'm selling and then got a slightly better offer but still not where I want it to be. I need to get on the ball do my best to find something. It is so hard because things move fast enough that what I find today is generally gone in the near future while I'm still waiting for the old property to close. 

@James Wise

That is good to know. Different areas are doing different things. Competition is fierce on the west coast for pretty much anything but I was talking to a couple of Realtors the other day and they both felt that multi greater than 4 units are less frenetic than the single family market over here. 

@Scott Swanson

Hi Scott, 

I have considered Indiana before. Mostly I had to narrow my search down from a whole country to a handful of cities so that meant that most places were discarded so I could focus on a couple of areas. Feel free to pitch Indiana to me as I'm not firmly rooted to any one place yet. I'm not trying to get political but the biggest requirement is that it is in a state that is predominately Republican. The rental laws in Washington have become so restrictive that I have no interest in owning rentals here or anywhere on the west coast. 

My realtor says list price should be $265k. It is a small market but has little available. This leaves me with a little over $100k in cash. Since the SFH market is pretty high right now I'm thinking multi-family will have less competition and am willing to do that.