All Forum Posts by: Vlad B.

Quote from @Eliott Elias:

Fake investors will say this, if you're not buying right now because of interest rates you are missing out on the biggest opportunity to buy cheap in a long time. 

Perhaps, I’m seeing low inventory in the market I’m in and a lot of “back on market” properties. I’m not sure what the issue is or was but I’m staying put for a bit. Q2 going forward with embarrassing offers and reading through the previous inspection reports.

Quote from @Todd Vernon Chunn:

Hey Kwan. I am local here in the Detroit area. I could refer a good Property Management company that also could get your units city certified and rented for you. I would also recommend that you have the PM get you Section 8 tenants. They tend to stay longer, the rent is higher and will get paid each month even if something like COVID hits again. Let me know if I can be in any assistance to you. TC

 @Kwan Suh you will need to watch the PM's out there. Make sure you vet the PM Carefully. I don't know how much I lost this year due to the PM charging me the full price and then hiring a contractor for a lower price. After switching PM's I found that you need pictures/video evidence if you are Out of State investor. Potentially get another contractor out there for a second quote to keep them honest. This was only after my new PM told me about their shoddy work.

We all take our "lessons" in RE but it's still worth it in the long run.

Good luck trying to raise rents from $400 to $800, there is no way you will get people to stay and pay double. You're in for years of gradual rent raises or else you will have 16 turnovers all at once. That will be quite pricey. 

Find out more information about the Kids Landlord literacy. Don't assume they don't know what they are doing, there is a good chance some of these tenants are going to be problems. Have some reserves for the above and Expect Surprises.

Quote from @Robert P.:

I'm looking for 2 to 4 units multifamily.  Any thoughts on good areas in say 100 mile radius?  Some of west side Indiana maybe?  FYI this will be my first multi-family.

A lot of great areas are offered in this thread, but do you have more specific criteria? For instance, where I'm buying MTF, I use the following criteria:

1) No basement, flood zone, older than 1980 properties to avoid foundation issues.
2) No HOA, Condos, and mostly decent shape properties with upside where you can add W/D, Stainless Steel appliances, and change cosmetics over time.
3) If my realtor or Property Manager is not excited to go to the area, stay away.
4) I don't buy ADU or properties with added-on spaces, try to stay with the original form the property was built in.

I'm sure there is a lot more but you need to create your own. Some come from experience or talking to locals in the area about the major problems.

@Joe S. Right now may be the best time to pause. The environment is stagnant with low to no inventory in most markets. Doing passive investing is cautious as I don't think you will like it having self-managed your projects. Selling right now is tough as any investor seeing the property will try to take your profits away for their own profits. 
Most of us are addicted to looking for new properties. If you take time off you may find yourself having FOMO. I've taken many "breaks" but found myself being lured back in by the excitement of the hunt. 
Best of luck!

Quote from @James Mc Ree:

I agree with everything above. You have a 911 on your hands and the last thing you should be thinking of is adding to your sinking ship is more ballast.

Looking ahead to 2023 if you must.... From here well into 2023 is likely to be a time of generally declining prices due to higher interest rates and increasing supply. It takes about 9 months for a Fed interest rate change to have its full effect. The first one was in March, so we are just starting to feel the impact of the multiple increases hitting the market now - and they're still coming! You may see properties up to 10% cheaper in Q3 2023 than comparables now.

Focus on fixing your cash flow now and WATCH your target markets until your current portfolio is stabilized and you have built that 6 month reserve @V.G Jason mentioned. It's very important and often not given the credit it's due until you are in a situation like you describe.

My goal for 2023 is to build reserves and stabilize rents so collection rates are higher. I have started on this path with the new PM.  
I really like the point that the market is 9 months behind so there is time to stabilize, save up cash, and then make the potential investment later next year. This I didn't know so thank you @James Mc Ree!
I made a horrific rookie mistake of taking out the cash I made in year 1 from my rentals and not having any reserves. 
I'm not selling my property or doing owner financing. There is a lot of upside in the area with KCMO investing billions in transport, World Cup in 2026, and Royals moving into the area. 

Quote from @Jonathan R McLaughlin:

@Vlad B. ok not to kick you when you are down, but a few problems...and a suggested solution:

"someone complained on MLS about no showing times?" who cares? This makes no sense and something is off.

interest rates from august are 2.5% less. This time period is the pivot. Most if not all of that run up in value is gone or was never really there.

That HELOC could be a bomb if you are already cash struggling....most reset and that could mess up DTI

There is no such thing as a "B/C" property, its one or the other each with their specific challenges and best practices. I worry that your casual way of combining them indicates a real blind spot in your approach, especially from out of state.

Sell the property with less upside in the spring market, using the time from now to March to get things up to speed and tenant issues fixed. use the cash to get the HELOC paid off/down. You likely wont have much of a tax issue given the losses.

If you think this is all temporary and you can weather this period ignore the above. But know you will spend a little more money and stressful time till it gets better.

Retrench to fight again, this is not the worst that could happen but its time to get ahead of it.

Good luck.

The complaint was going to cost my realtor $1K from MLS and they are not willing to put it up again due to this issue. She's never heard of this problem before...so this was a stick in my spokes. My realtor doesn't have $1K so they're not re-posting. Now the price has gone down 35K or so and I'm willing to wait it out.

Correction: 1 C property and 2 B properties. 

HELOC is a problem because it's a balloon that has gone up with interest rate. I thought I would sell the property and use the money to remove the HELOC and use the rest to invest, but that didn't happen due to the complaint.

I'm seeing mixed reviews from the BP community between sell and hold. The tenants are having issues paying and are signing up to get help from the state. I'm giving them a week, proof they submitted the paperwork, or they are out. I don't have enough information on my tenants to move forward YET.

But there is a feeling of missing out on the opportunity to buy in 2023!

Quote from @Larry Turowski:

@Vlad B.Keep investing? If you keep investing like that you’ll go bankrupt. You are over leveraged. You need evict non-payers, fill the vacancy, and sell one or more of the properties to shore up your finances. And then reevaluate. You should not have two non-payers and a lingering vacancy out of 8 units in b/c areas. 

Larry, 2022 was full of many failures. This is my second year of owning properties. Last year was a cash cow 29% COC Returns. The problem property in C area is sub 4% loan from 2020. It grew 90% and I put it on the market while in transition from a bad PM, hence issues. When I put it on the market someone complained with MLS that I didn't have showing times and my realtor took the listing down. The PM transition took from October to November and my new PM told me what's going on with my units that my previous PM wasn't communicating.

Vacancy & the other delinquent unit is in a 4plex that was purchased in August. It's been delayed due to poor PM.

Hi BP Community, I need some feedback. Currently, I have B & C properties, 8 doors and 2 renters are struggling to pay rent and a vacancy. I've used up all reserves in 2022 for the vacancy, maintenance, and late rent. My HELOC is maxed out and we can't save any cash as we spent it on the mortgages in 2022. My wife and I work full-time jobs and I took on other work to subsidize the mortgage losses. I'm an out of state investor in KCMO market.

What can I do in 2023 to continue investing?

Why not a hybrid approach of doing school online, which could be at a discount and working a job. Yes, this sounds like it will suck but if you get a decent-paying job, live at home or a roommate and study you can graduate while building cash. Then when you have enough cash you can house hack and build from there?