All Forum Posts by: Tashfeen Islam

As a long-time former Bay Area resident, most of what's been said already is pretty spot on, especially the person who mentioned that your expenses don't end at the $4-5K for the mortgage, PMI, etc. and collecting $4K every month is not guaranteed either.

Expensive markets like the Bay Area (and Sacramento slowly getting there) are meant to offer little-to-no cash flow unless you have minimal debt on the property. However, with the strategy of purchasing a property for $550-600K, you’ll be paying expenses out-of-pocket for a long time, pretty much until you pay the loan off. If you can afford that with your other income(s), that’s great, but very few people can. 

Two suggestions I'd offer are 1) if you can somehow claim this as a primary residence (e.g., moving into the property for at least a year to avoid any form of mortgage fraud), you may be able to reduce your interest rate to save some funds monthly & manage the property yourself so you can avoid paying someone to do so while also monitoring the condition of the property on a daily basis (e.g., gives your more insight into the quality of tenants, whom to not renew a lease with, etc.) and 2) if you decide to make this a purely investment property, lenders will require 20% down so you'd be best off finding something for half the price you were originally seeking. Given that a property for $275-300K in Sacramento is tough to find excluding condos and apartments, which have HOA fees monthly eating into your margins, you may need to consider a fixer-upper (some lenders may even finance some of the renovation expenses for the same percentage as they're lending to you to buy the property) but that's a different story though can be successful, as I've done so once myself in Texas without living in-state.

Reach out if you ever want to discuss further. Good luck! 
 

I agree with the mention of the Tampa-St. Petersburg area. That area was definitely more affordable 5-7 years ago but still not absurdly expensive today compared to the rest of the country. Plus, it’s a retirement and snowbird haven so finding quality tenants year-round is not difficult, even for someone living out-of-state. This was the first out-of-state market I invested in and it worked out well enough that a number of my family members and friends also outside of Florida decided to buy investment properties there too. 

 @Drew Sygit Thanks for the thorough feedback. I've been exploring different methods to get some units occupied but with an incompetent PM, its an additional hurdle I am trying to clear.  

As for your questions, my responses are as follows. 

1) Is it on the MLS so other agents can show it? I'm still waiting for them to confirm but have mentioned to them the helpfulness of MLS and sites such as Zillow, Redfin, etc. a number of times.

2) Are they offering self-showings? No as they have the keys at their office so a prospective applicant would need to coordinate with them to access the units. Per my PM, this part of Lubbock has seen more break-in's as of late thus someone being there to lock up upon exit is important and they don't want to rely on prospects to do so.  

3) Have you reviewed the ad type and pics on your phone (how most prospects will look at) to verify acceptable? I did and I told them to add more details to the description (initially just had a one sentence description) and use pics all from one unit, instead of picking some from multiple units, so prospective applicants don't feel they are being bait-and-switched.  

4) What MoveIn Specials do they suggest? $50.00 off first month's rent for qualified applicants who sign a lease. 

5) What Along with 3-D Tour, what about a floorplan? They are not a tech savvy PM so their site does not offer 3D tours. As for floorplan, they simply state how many bedrooms, bathrooms, and square feet the unit is. 

Simply put, I am doing a lot more hand holding with this PM than I typically do with my other PM's which is frustrating but I am giving it a few more weeks to see if they can make any progress before I discuss any early termination of our agreement with the principal. 

@Sam Yin Yes, I’m a frequent user of Zillow. What I meant was in terms of your listings, are they all based in/around Los Angeles or do you also advertise listings in less densely populated parts of Texas? 

The reason I ask is because I’ve noticed different marketing strategies work with the different demographics in varying regions so something that might work in a big urban city may not also in a small rural town. 

I did notify my PM to get us listed on Zillow nonetheless but maybe they need to implement a unique strategy while we’re at it to be most effective. 

@Sam Yin I’m glad to hear that you were able to right the ship with your properties. My PM has a website that lists their vacancies and frankly, I’ve pointed out to the principal how poorly the listings look and their descriptions are not even decent. She has promised she’d work on them but I’m still waiting on my listings to be updated. As for Zillow, I’ll bring it up to her as I didn’t see anything there. 

Are your listings primarily in California or do you also have some in North Texas, as I believe the marketing strategies would differ between the two? 

@Nathan Gesner I appreciate the thoroughness in your feedback. You made some great points that I hadn’t previously taken into account but the ones that really caught my attention were no. 2, 3, and 6. The one-year agreement we currently have, which is shorter than the other PM’s I spoke to offered, seemed short enough in my eyes but we never ironed out a separation policy which is where I dropped the ball. As for the fees they charge, they lowered their monthly rate from 10% to 9% as I had given them so much business from the start so they’re not the least expensive option in town but based on their positive online reviews, I felt like maybe they justified their pricing. However, talking to other owner clients of theirs and any other PM’s I consider in the future is definitely something I’ll add to my checklist moving forward. I’ll be in touch in case any other questions pop up. 

@Stuart Chinworth Thanks for the feedback and I understand. The PM I hired made me feel like they’d handled properties like mine previously and they were eager to earn my business but of course, initial discussions and actual results are two different things. Nonetheless, I’ve had a talk with the manager and principal (her supervisor) recently about getting this property to full strength asap. As for bringing in a new PM, it didn’t state in our agreement that I can drop them at any time but the PM and I have discussed previously how to proceed if one or both parties feel this partnership isn’t working. Having everything in writing would be ideal but since it was my first venture into this market, I wanted to give the partnership at least a fair shake and one year felt more reasonable than being locked in for two. 

@Danny Liu Hit the nail on the head! 

For reference, I live just north of that section of Manhattan so I speak from some experience.

IF you are able to find any multi-families for sale in that area, they will be for multi-millions most likely (only case I can imagine is if the owner is doing a fire sale and just trying to offload their asset asap). Most of those listings get scooped up by larger corporations ultimately but I'm sure one or two fall through the cracks out of every ten or so. 

Manhattan in general though, is not a great cashflow market so like he said, its more ideal for buy-and-holds to see some appreciation in your investments over the long run. Plus, the bureaucracy that is New York throws a whole different hurdle at you that you should be mentally ready for, in case you do decide to invest here. 

If cashflow is more important of a criteria for you than value appreciation, I would recommend going to one of the other boroughs as Manhattan is slowly getting tapped out, even Harlem. 

However, if you do decide to pursue Manhattan, the east side is slowly getting more gentrified so East Harlem (if you're willing to take the risk of visiting there) may be the best bang for your buck long-term. The Bronx is also just north of Manhattan is you want to try your luck there. 

Hope this helps!

Tash 

Hey Tanner, 

Glad to hear you're planting the seeds early in your real estate endeavors. 

The best insight I can offer would be the following: 

1. Study your local market first and foremost, as investing in the area may be more ideal than investing out-of-state until you get more comfortable hiring a property manager and delegating more of the responsibilities to others. This can give you a better idea of what you can purchase on your budget, who the typical renters are in that area (e.g., retirees, college students, etc.), etc.   

2. Build out your network (e.g., realtors, mortgage brokers, contractors, vendors, etc.) so you have a support team once you do get into a position to buy something (real estate, from what I have learned, is all about relationships) and can have your investments running smoothly post-purchase.  

3. In regards to a mortgage broker, ask them what they would typically need from you to get you approved for a loan. Having your past two years' tax filings (if you file independently), a W2 statement (if you have one), easily accessible last two months' bank statements, paystubs (if any), and some other items all in one place ready to share at any moment's notice will definitely save you headaches down the road when you are moving quickly to get approved and into contract on a place.

4. Given that you are still in college, IF you need a co-signer, talk to someone who you believe would be willing to do so (e.g., a parent or guardian, relative, etc.) so they are aware of point no. 3 and can provide you and the mortgage broker with those same items when necessary. My parents co-signed my first loan and knew that the risk of me not paying my mortgage leading to a loan default would fall on them and impact their credit score so make sure that person(s) are aware of the risk they are taking on so they can decide if they are willing to co-sign or not.   

From there, just stay vigilant by reading up on the real estate & credit markets and overall economy until you're ready to make a move. 

Best of luck in your journey!

Tash  

Hello, 

A few months ago, I purchased an eight-unit, two-story apartment building in a more blue collar part of Lubbock that has seen a number of tenants either vacate or get evicted, thus we are down to less than half occupancy. 

For any local experts or those on Texas multi-family real estate, got any advice for an out-of-stater on how to get these units occupied quickly? 

My property manager is moving at a snail's pace so just getting one unit rent-ready feels like pulling teeth but given that at least two are move-in ready, I would like to get them occupied asap. 

I also have one vacancy in a similar area of Killeen in central Texas so any advice there is helpful. 

Thanks in advance for any and all insight!

Best,

Tash