All Forum Posts by: Account Closed

I have never seen a deal so good that we would put up with an HOA or Condo association. Way too many factors controlling your expenses that are completely out of your control.

Ad remember they can change rules, assessments, etc on a vote.

Run don't walk!

There are many factors that went into our decision.

We had one policy cancelled due to a roof being older then 15 years, even though there was nothing wrong with it and had a 30 year guarantee. So we would have had to put a new $6,000 roof on a building just to keep our policy, absurd!

Also, remember, a casualty loss is tax deductible at least in the year it occurred with constantly changing limitations, this means that even if you have a loss due to some event, the amount of the loss can reduce your taxable income to some extent. You may even be able to amend a previous return!

This is in addition to the savings from the avoided rape by the Insurance blood-sucking leeches, is it sounding like I don't like them?

But as always, speak to your accountant and get a thorough understanding of implications before making such a decision.

And as a previous poster intimated, there is safety in numbers, meaning, the more the properties the greater the risk reduction in such a self-insuring mechanism..

We have been self-insuring for the last 6 years, 10+ properties. We take the balance that would have been paid to the insurance company minus the taxes we now have to pay and keep that in a separate account gaining interest.

We save app. $15,000 a year by not paying the insurance companies, so we have banked app. $90,000 that would otherwise have gone out.

The policies we had all had large deductibles, which we almost never met, and when we did have a water damage claim, the company, AllState, took the deductible out, paid us a few bucks, and promptly cancelled our policy.

We got fed up and changed our way of doing business. We have saved more then enough to rebuild a house completely destroyed by fire, which statistically almost never happens.

In addtion, we moved all the properties under a corporate umbrella and bought a liability only policy which covers all the properties for up to 3 million. The cost for this policy is under 2000.

Insurance companies make money by fueling your fear, you must have it, and protecting their profits, refusing to pay claims or not meeting deductibles, it is a complete ripoff and as a business you should look at the cost/benefits of dealing with them or not.

For smaller holdings, and of course mortgaged properties, you may not be able to completely self-insure, but it is worth looking into.

Buffet didn't get rich by paying claims.

We are to release our newest software shortly and we have decided to move to our own server from a shared hoster.

We are looking for a dedicated hoster will some good reviews.
Anyone use one they particularly like or dislike?

Regards

"Stupidity is fatal"

Prospective Tenant:

"I have an old cat, not long for this world, and have no interest in replacing the cat when she goes."

Finances where ok, ok'd the application set the date for lease signing and key handover, cash deposits required at lease signing and handover.

Lease SIgning:

New tenant shows up with 5, count em, 5 cats in her caravan with family ready to move them all in. "She couldn't leave them as they would starve."

My husband tore up the lease in front of them and ordered them off the property or he would call the police.

They left .. never heard from them again ..

In the myriad responses to an upcoming vacancy, more then half have had some type of legal problem, eviction, felony, etc. and disappeared as soon as this was brought up.

The rest have not had an income stream near no less above three times the rent. Most are unemployed and receiving student stipends, something new of late.

I know that there is 11% unemployment statewide, highest since measurement began, and probably closer to 15% in our area, but this is looking like a depression.

I think it may be time to begin unwinding our market holdings as well, not that the dollar is actually worth anything.

It is going to be a long winter!

Thanks for the thoughts all.

I decided to drop the rent and shorten the grace period for late rents, so that would effectively be the same but without leaving myself open to the "I did not understand the language" garbage.

Drop the grace period from 5 to 3 days.

Thinking about something different for the coming weeks ads,
near 5% discount for early rent.

Not sure if it is a good idea or another fart of the brain.

Example: Rent for 2 bed unit : 525.00

(All dates for received, not postmarked)

Rent: 500 if paid on or before the 1st of the month.
525 if paid by the 5th
565 (40.00 late charge) + 10.00 a day from the 6th on.

(Of course three day notices go out on the 2nd, but waive the late charges if paid on or before the 5th, hence 525)

Sort of an incentive to get some more interest on vacancies, and hopefully from some that might actually pay the rent early to take advantage of the cost steps.

Any thoughts ?

"An idiot and his money is soon parted."

There is a reason for this saying. Some of the advice you have received here is solid. Some is not.

Start with one house, go through the process of finding, buying, renovating, managing and learn. You will make many mistakes, and pay the price but you will, hopefully, not repeat them on the second one and so on.

Buying out of town is a terrible idea to start, you have not the experience and guess what, all "your" people will want to make money, gee, and they will see you as an income source that is not there to watch, you know, a bank.

Buying 3 or 4 houses a year to get to your goal is great if you have the cash reserves and experience to renovate and manage, otherwise your first trashing of a property, bad rental period, and they happen, will end your adventure and add some time to your planned work life.

Be cautious. Start very small and very cautious and pay your dues. You will pay for your errors and this should be expected.

But don't add leverage to you list of early errors. Leverage has its uses but not during a learning phase.
Would you buy stocks on margin when you are just beginning to invest? Don't do it here either.

That said, this is a great time to find good units to add to your retirement or for flips sometime in the future.

A good time to begin, as your mistakes can be covered by the expected valuation increases to come.

But no-one knows when the increase will come and further decreases in value and rents certainly appear more likely in the short term.

There is no get rich quick path, and anyone who tells you there is is full of it.

It is work.

The construction trade (west central Florida) around us has basically died. There is literally no new building in the area and those that were in construction have disappeared from the area along with their families, no jobs, and HD and Lowes are not hiring.

Combination of stupidity, arrogance, and just plain bad advice made the situation even worse when the local politicans decided to raise the impact fees for new construction and for converting office space to new usages.

Results are of course, empty commercial buildings,and we mean completely empty buildings, whole strip malls with not one tenant, and no new home construction.

As far as home improvement and repairs, that is far less then it used to be, as people seem to be afraid to spend the money, causing again less work and talent leaving the area.

This has had a weird side effect in that finding someone to do work for you has become difficult, as they all booked, and more expensive.

This has caused a ripple effect in the area. Restaurants are always half empty, used to be you needed to call ahead to go to Outback on a weekend, no more. At 7:00 pm, prime time here, it is 3/4 empty.

This means that half the waiters and waitresses that used to work there are
gone and those that remain are making far less money then they used to.

One of our tenants is a waitress and she has gone from 4-days a week to 6, with a couple of double-shifts in the mix, and she is still making less money then she used to. One night she even made
nothing, the first time that has ever happened.

She even complained that the "snowbirds" that should have started to arrive, are nowhere to be seen as yet, not a good sign for the services around here.

We have a couple duplexes, and this is where we are seeing the most effect, rents already down 10%, another 5% coming off as we speak.

The young couples, families, that we would normally get seem to be moving
back in with family. Actually in one duplex, both sides are leaving this winter
to move in with family to save money.

No end to the unemployed, evicted, and just bad tenant requests, two or three a day, but no decent tenant requests in the two weeks we have been running ads on the coming openings.

I am sure other landlords are accepting them, we are not. We will just continue to lower rent until we find suitable tenants and chalk it off to the economy.

The SFRs are also down 10% in rent, but filled and no-one is moving out as yet. We are priced below market and have superior quality so hopefully this will remain the case.

Looks like it is going to be tough to fill empty units, the only positive
on the horizon is we are only two months till tax season.In the meantime,
we will be reducing rent again and beginning to run specials in order to fill
the duplexes.

Budget for the coming year, will rise to expect 10 to 15% vacancy rate. Luckily, we have lots of pricing flexibility and hopefully will weather the storm, highly leveraged owners will not be so lucky.