All Forum Posts by: Jared G.

@Wayne Brooks That may be true, but either way, they're often flaking out on calls and appointments that they themselves scheduled. So. . .

I have been in contact with realtors, lenders, insurance agents, and property managers for the past couple of months. I've noticed that while they are friendly and mean well, most of them have been dragging their feet on everything. Every interaction is a missed call, an unanswered email, taking 3-4 days to respond to simple, straightforward questions, and promising to send something over and then never doing so. Even when I want simple estimates for what things may cost, it takes a week of back and forth to get an answer.

You may think, "it must be you, then" -- but I doubt it, because when we do talk, everyone is in good spirits and we are productive. It's just very difficult to keep anyone around for very long. Plus, I have so many questions that by the time I get a hold of them, much of what I was going to talk about has been interrupted with even more pressing questions.

How much of this should I be willing to accept? I know people are busy and I want to respect everyone's time, but another weekend is now going to come and go where I can't be as productive as I want to be because I am waiting on others to get back to me with necessary information. 

What do you consider normal, and when would you move on to working with someone else?

@Christopher Phillips Thank you for the quick and thorough reply. I think that I am one step behind you in understanding, though. You're talking more about estimating the costs of these repairs, right? I'm confused on how you even know that there are repairs needing to be made in the first place. 

Where I'm coming from is this: evaluation calculators always have a spot to enter renovation costs. If I am evaluating many properties in one sitting, how would I know what renovations they would need?  Thus far I have just been putting $0.

Other than walking into a house and seeing a giant hole in the roof, or a completely broken HVAC system, or something obviously destroyed, I'm not sure how you're supposed to judge whether anything needs to renovated. And all of these things happen when you see it in person, not earlier when you're running the initial evaluations. 

I totally get WHY you'd want to update and refresh a property, in order to rent or sell it for more, but I'm not sure how you know which are absolutely necessary, especially before you see it.

I have no problem admitting that I don't know squat about renovating or rehabbing a house. I had always thought those kinds of topics were for more "advanced" investors or actual hobbyists rather than beginners. However, as I read and listen to more, I keep finding stories of people who casually talk about redoing entire kitchens, knocking down walls, landscaping, completely renovating bathrooms, etc. The way they talk about it makes it seem like these things are integral and obvious to owning property. Or, if not that, that they are necessary for finding great deals that other people "don't see." I also find some property listings that would be good deals except that they need "$30,000 worth of rehab" (just an example). But I don't know what that means, specifically. (Would I simply pay for already-established needs or would I have to figure out those needs myself?)

For some reason, the beginner material here seems to approach renovations as something everyone is already familiar with. What about for a potential investor who has never done more than change a light bulb? 

What is the average investor supposed to know about renovations? How much of all of this is necessary that I direct myself, rather than hire out to someone else? Do I have to have "taste" for what the inside of a house should look like? I am intimidated, because all of that specific house knowledge seems like a completely separate field of study in itself, whereas I'm only just getting acquainted with the math side of it. Coming from me, this seems like months' more of study in an already complicated business. I know nothing about materials or hardware.

Should I just not even consider properties that need renovation in this case? I don't want to let deals slip by just because I'm not handy with tools or construction, but then again, I really don't know how much one should know.

Wow -- great answers from everyone. I really appreciate it. I think (to answer almost all of you) I'm getting paralysis by analysis in a way, because I've heard and read about all the little things that can go wrong. Or, to not be as pessimistic, all of the little things that can make a property cash flow negative. I'm weary because I feel like one simple miscalculation can completely change an evaluation.

@Jeffrey H. @Jake K. @Ozzy Sirimsi Thanks, everyone. This makes me feel much more confident. I'm glad to see this good side of BP.

@Russell Brazil Thank you, Russell. What confuses me about your reply is that I thought the whole idea in learning about REI is evaluating deals. I've read and heard that over and over -- evaluate hundreds of deals. So, I am trying to do that every day. But my evaluations lead to various results as I tweak numbers while still being reasonable. If there's no right or wrong, then what is there? How does one know what makes a good deal, or a property worth buying, when the calculations can change significantly with slightly different information?

@Jay Hinrichs What happens to me is sometimes I will evaluate using the 50% rule as you mentioned and the property will be cash flow positive. But then I'll evaluate using the more specific Baltimore area numbers I've gotten from other investors and it will be negative. That is being conservative. But tinkering with the monthly rent, purchase price, and maintenance numbers even a little bit (all still within the ranges given to me) yields both positive and negative cash flows depending on what I alter and so I don't know which of those adjustments are "right" to make or not.

@Matt K. @Jay Hinrichs Thanks for the thorough answers. I'm definitely running evaluations myself, I think my confusion comes in the ranges I've been using, which I have gathered from all the sources you've mentioned. Using the upper versus lower bounds of these ranges seems to give me wildly different results in the calculator, leading me to many "potential maybes" -- so many that it seems like too much to ask for her opinion on. For example, simply adding $50 in rent per bedroom or estimating $1000 more per year for maintenance can completely change my outcomes. Not to mention knocking $10,000 off the price of the property. I don't know if those substitutions make sense or not. I realize this is beside the point, but that's what I was looking to her for clarification about.

@Brian Pulaski Thanks for the quick reply. Yes, I've been finding properties and then asking her opinion to which she has given the mysterious answers I mentioned. One of my main issues is that I'm not completely confident on those numbers (since I'm working with ranges) - so I've just been running as conservative numbers as possible. I think she can help me refine my ranges so that they're more accurate, since she's familiar with the neighborhoods. But she isn't really answering? She only replies every 3 days or so, with just a couple of sentences. I have no idea if this is normal or not. Again, not trying to make more work for her. It just seems odd that I should be guessing the numbers in my evaluations when she knows them from years of experience and can tell me where I'm right or wrong?