All Forum Posts by: Michael Totman

What's your "make me move" price? Drop the rent to $2,500.  If it rents Feb 1 that was your problem, if it doesn't you haven't lost anything more and you still need a solution. If you are worried about the $600 think of it this way: another empty month at 3,100 means it will take 5 more months to recoup that loss once you do realize you need to drop the rent and get it filled.  The tenant you're looking for who can afford that aren't looking to move in the winter during the holidays, so it could be timing, but what will you do to convince them to move now? 

Good luck with the ADA crowd on that.  Perhaps this even broke some other clause in your lease to evict on? Does your lease require he carry renters liability insurance? It will now...

Everything everyone else said, plus: You answered your own questions even though your numbers are only accurate-ish.  On the duplex for example, if your numbers were accurate that's $400cf/month. Is that worth it to you? Likely you'll find yourself at 100-200 most months so ask yourself: Is this work worth $100/month or some months negative cash flow? Sounds like you've got at least $15,000 to invest for down payments to make $1,200/year, or 8%. A good mutual fund gets you that with none of the stress or risk of these properties. So what premium would you require from your real estate returns in exchange for the added risk and hands-on-edness it requires?  Would the tax benefits cover that premium? What appreciation do you expect? Personally I make decisions without factoring in the tax benefit or appreciation and consider that gravy as it can change year to year, but I do think about it.  How solid are these tenants and those rents? Are they trending up or down? Lots more info needed here. 

Thanks @Steve Bracero  In this particular case I'm just talking Instagram.  Content is mixed, some listing photos specific to a town, some general "you should buy because..." photos, some general blog type info.  In all cases I tag my local towns, and set the location as my local office unless it's a town specific listing.  I'm not doing any ads here, just hashtags.  I use specific ones like #berlinamassachusetts, #massachusetts, but also some general like #realtor, #firsttimebuyer, #house, etc.  I'll get a handful of new followers each time, but mostly from way far away, and mostly out west or south.  The type of people I'm getting are the type I want, I just want them more local. Is Mass just that far behind in adoption, does it work differently out here, I feel invisible to Mass people but a budding star to the west coast.  I'm mikeWtotman.  Still new to this, any input you had would be welcomed. 

I'm an investor and Realtor looking to build a better online presence. What hashtags are you using on social media to get local interest? I want to find local people, but anytime I post on instagram or something I get tons of reaction from California, Florida, and North Carolina but hardly any Massachusetts based people. What tags are you using to get noticed by either other realtors/agents or buyers/sellers locally?  I do use tags for the towns I'm looking for as well as using the location feature.  Is Mass just behind in adopting these platforms?  Or am I a complete idiot when it comes to using this stuff?

Hi @Aaron Misiph, I've sent you a direct message if you'd like to discuss. 

Don't buy that house in Clinton. I've walked inside, if it's your first rental it's going to be overwhelming with the work needed to clean it up and get it respectable. It's way overpriced.

I should mention that off market deal I described, that's actually from a wholesaler who is supposed to know the numbers an investor wants...

Does anyone else feel my pain? I'm looking at properties trying to see if there is a good deal to be found but it seems sellers of small multi families are living in a dreamworld when it comes to prices. When I run the numbers, even when I try to cheat and assume "that cost would NEVER be that high so let's lower it..." I can't seem to make these things work. For example:

A 4 family building, seller wants $499,999. (I'm in the northeast, prices are high yes, but stay with me...).

The sellers numbers that they are presenting (water, electric, maintenance, mgt etc) in hopes of making this deal LOOK ENTICING TO A BUYER show that after financing the new owner at this price would be left with about a $10,000 annual LOSS!!

Even assuming someone paid all cash here, it's only about a 3.5% return based on their stated net income!  Forget tax benefits, are we really settling for 3.5% cash returns here?

I looked at the numbers, they are pretty accurate, so why is it listed so high? 

Another one, off market deal here, this time the seller wants $150k (this is down from the original $160k).  I look at the house with a contractor and it's going to need an easy $50-$60k to dress it up, fix foundation and asbestos issues, among other things and at best you might get $1,900 gross rent each month.  This one at least looks cash flow positive assuming nothing big goes after the rehab but still, it's a pretty thin margin here. 

I own a few other properties with a partner so I like to think I know the numbers, but, man, am I nuts or have my expectations for returns been unrealistic all these years? 

I thought I knew the numbers, thought I was smart, but please fellow BP readers help me understand and teach me why people seem to be paying these prices. 

Well, it's a single family so your margins are going to be tighter without the numbers being spread over multiple units.  Are your insurance and tax numbers accurate? Seems high to me based on such a low valued home, but it could just be your market. Is a 10% vacancy rate accurate for your area, how'd you calculate your maintenance and cap ex?  Maybe it's just not a great rental deal.