All Forum Posts by: Vlad B.

 So I decided I am in for the long run. 

One is in a C area. The other isn’t. The dream is to get rid of everyone and get cash flow but that doesn’t exist to my knowledge. 

Bill, good points. These are newer properties with bad tenents that I inherited from the previous owners who got small security deposits. I started to require renters insurance for MTM leases and these two properties are 1990 and 1991. My PM's get me the quotes as I'm out of state, so my hands are a bit tied there. Other learning here is I should have kept a bigger budget for reserves.

Hi BP Community,

I have 2, 4 units total Duplexes that I purchased in the last 2 years that were money makers last year. Everything was going well before 2022 hit and tenant turnover happened. 

Unit 1 turn: renter went M2M, didn't up their rental insurance, 2 huskies from previous owner's lease lived there urinated and destroyed hardwood floors. The security deposit was $800, damage was over 5,200 with insurance already expired after the lease. Took 2 months to rerent the unit at a higher rent.

Unit 2 turn: better, $1,500. Took 1.5 months to rent. Rented at a higher rate. 

Unit 1: had a leak in AC Unit: $600.

Unit 2: leak causes molding and $3500 of damage for both units.

Unit 3: Tenant smoking and put cigarettes on countertops while cooking making incredible black circles. Countertops and turn $2450. 1 month vacancy, rented for $300 more.

Unit 4: At this point, I've had it and raised the rent only $100 so they stay. Find out they have a pitbull mix and the tenant cannot sign lease due to mental illness and PM is unsure how they signed in the first place. 2-month delay in signing the lease extension, no pitpull mix on-premise.

Both properties were purchased sub 4% financing. PM is better than first PM I hired in the area. Has anyone else gone through similar and been through this?

@Daniel Sanchez what a question with a wide amplitude of answers. Lots more questions here than answers first:
1) When you're talking about a real estate portfolio are you talking active RE investing (owning property) or passively investing in RE?
2) Are you looking for your portfolio to provide cash flow or appreciation? With options #1 and 2 there isn't really liquidity for a bit of time.
3) Out-perform is a relative term depending on how you crunch the numbers and tax deferral. If you don't understand this, it's important to read up on this because some of the out-performance will happen with tax savings.
4) Liquidity is going to be tough with Active or even passive real estate investing as these are long-term holds to obtain valuable benefits. If you want liquidity, you will need to go with a crowdsourced type of RE investment but that doesn't provide you with much on #3 but you gain liquidity. 

You're still young and have ample time to learn from books and by doing. Best of luck!

@Tom Shallcross please add me to the list. 

@Marcus Auerbach Great post! Hopefully, the person that has this investment has great mentors or BP to help them out of the situation. Early in my RE journey I almost purchased such a property being from OOS. I was saved by my inspector who provided me the truth about the area and woke me up from my stubbornness. 

Since I have developed two rules that have helped me stay away from "cheap" housing. Rule 1) If I can't find 3 Property Managers that would manage the area, perhaps this isn't a property I can invest in from out of state. Rule 2) If the property is not a safe place to live inside and outside, and the money invested to make it safe and affordable for my tenant isn't possible, then I stay away. 

My realtor is a close friend of mine who I trust. I have learned what to look for and understand which parts of a property will cost me the most to repair. It sounds like what I need are handy men and General Contractors who can do the work to repair fixer uppers. Is that what you are saying?

I'm an out-of-state investor in the Kansas City area. With the market being so hot I am noticing that I'm at a disadvantage. Looking at multi-family properties (2-4 units), I'm noticing issues with properties that I cannot fix from far away: horizontal foundation cracks, water damage from bad or no gutters, bowing walls, windows rotted out, no floors, no kitchens, fire damage, and mold. 

These are issues my current team doesn't have the capability to fix, or time to find vendors with pay because they can make more money just selling properties. I've looked at two wholesalers and some off-market deals but I don't see the wholesale deals cash flowing well for what I want. I've looked into other markets like the Milwaukee area where I could drive and see the places myself but that market is again scorching hot. It doesn't make sense to move away from a good market where I have a solid team (Lender, Realtor, Insurance, PM). 

I'm hoping the community can provide ways to get around this issue as I'm not the only one dealing with this challenge.

Thanks @Ryan Husser your points make a lot of sense. I also looked on Google Satellite view and there is no way to get to the second property as it's behind the first home and there is a creek and forest in the back yard. Seems to have many barriers to entry, so I'm going to pass on the property.