All Forum Posts by: Paul Cijunelis

My only reply here is to say to simply focus on the business objectives. Collecting rent, preserving the asset, minimizing vacancy. How hard is a zelle payment to deal with? You have one property. You're going to torpedo a tenant relationship over this? I'd simply explain they can use Zelle until the renewal, then the portal will be the preferred method. Because Zelle requires more data entry I would explain with the new lease there will be a small and reasonable processing fee if the tenant kept with zelle but they can still use it. I am not familiar with Avail and whether a LL can view credit history. Seems like an errant statement but I don't know. A lot of suggestions here are very confrontational. Good luck with your tenant.

Is that 450-600k equity over and above a 70% LTV? You're netting $5k/mo and have no cash available and you're working a civil engineering job? Did you just use all your cash on a new acquisition?

I'm not familiar with Canadian regulations but you should look into how you can get access to money if you don't have any. A LOC would help. It's also unclear what you're intentions are. Commercial acquisitions or new construction?

Commercial deals are going to look at your qualifications as an investor as well as the DSCR value of the property supporting itself (at least here in the USA).

For construction, you will need to look into licensing requirements such as a GC license. Here in the USA you have to be licensed to build a structure that will house someone else. Even if you're the GC not swinging the hammer, you need a license. For the community development dept, you'll need proper plans (architect), site survey, permits, etc. when you're ready. Talk to your local building department for the codes they follow and requirement(s). A phone call will answer all the questions or a quick visit is better, set an appt. Here in the USA you need what's called a "construction loan" and it's also very hard to find a company that will insure you if you're a newbie. Make friends with some bank presidents, seriously. You might need to be interviewed (ask me how I know). Then you'll need to find land, acquire it, find a spec home buyer and set up meetings to design plans or buy a set online with mods. Of course have your costs researched first bc the buyer will want to know how much it will cost them to buy. Is it in-line with other builders? Then it's simple, build the home, find crews to do the work (you should already have them basically from the prior step), excavation, concrete, sealing, framing, roof/gutters/siding, windows, insulation drywall, plumbing, HVAC, electrical, finishes, etc. basically in that order. It's a huge undertaking. I've done it, I know. Good luck.

Quote from @Kaleb Johnson:

Hey guys, I am a real estate agent looking to get into property investing. I was wondering what are some good areas to look into for investing. I live in Upstate New York but i was thinking of areas more out west or down south. Thanks!

 Kaleb, good morning. My opinion on this is split between two answers:

1) invest in your backyard. Obviously you can maintain a stronger presence and level of involvement investing in properties near you. You know the areas, etc. Many benefits to doing so. 

2) If you are going to invest outside your area, the one thing I rarely see mentioned here is simply the "investment landscape". What I mean is look for areas that are favorable for investors / landlords. This is a two-sided beast. The first thing here would be the regulations and laws governing acquiring properties, managing properties and selling properties. Taxes, costs, eviction complexity, etc are going to be a much bigger factor in your success than anything else. The second thing would be simply the costs, themselves. How pricey are comparable properties and their costs? Just throwing a fake example here: a 3/2 SFR in NY vs a 3/2 in OH, MI, IN etc. what are the property taxes? If you had 150k you could buy one 400k property with 8k property taxes that rents for 2500/mo or you could buy two 200k properties with say 3k property taxes per month each renting for 1800. In the first you have one tenant, 2500/mo revenue and higher costs. In the second you have two tenants with 3600/mo rents and lower costs, if one moves you still have 50% revenue coming in diversified across two properties. Again, these are made-up examples but when I started, I was looking at one property in Chicago vs THREE in Indiana and the property taxes overall were about 1/4 the cost of Chicago and evictions of 3wks vs 6 months or more in Chicago. So guess which route I started with?

Let the numbers tell you where is the best area, for you.

Oh, and if you invest out of state, build the PM costs in the deal. You'll want a property manager.

You should talk to a lawyer. You'll probably want to quitclaim it into the LLC. Read your mortgage paperwork for the due on sale clause. I have several really good lawyers we use, you can PM me if you want info on them ... and if you'd like to talk property management reach out. Chicagoland is extremely tenant friendly so understand that going in.

Quote from @Charles J Sabo:

This will be huge for house hackers out there. 95%LTV on 2-4 unit properties. Set to release on Nov 18th. Keep an eye on this.

Wow, this is a big change. Good opportunity but ... I have to wonder if "they" see trouble coming. This is effectively legislation to open up the market to new prospects.

Quote from @Dustin Hagemeier:

As someone in property management, I’m pleased to share that we’ve had significant success with the Section 8 program. [...] In fact, approximately 40% of our business involves the Section 8 program.

40%... It saddens me to see this percentage creeping upward constantly. So many dependent on government. I hope this improves.

S8 can be a challenge. I'm not in St Louis, rather Chicagoland. People you talk to will either love or hate S8. It depends on the experience they've had. For me, on my properties, it's been pretty good. But there are challenges for sure. The key for any tenant, S8 or not, is screening, imo. 

You'll typically need to set up your account and get familiar with the process of working with the local housing authority. Reach out to them. They are the source. In terms of the areas, you will be best served driving it. I don't ever recommend someone buy a property having never seen or been there.

It sounds like @Dustin Hagemaier would be a great resource for you. As a PM, his team would be familiar with areas and could help underwrite the property and take care of the day to day headaches. 

If you're going to do it alone, make sure you your due diligence: estoppels, inspection, review, consult with a local attorney familiar with the local regulations, etc. and good luck.

I'm with @Huong Luu but would add join a local REIA and find some PMLs they are always hanging out at meetings. Network, find some money. If your 5th deal is good, you should be able to find funding outside the banking industry.

Quote from @Camille Romero:

Hey everyone, 

I’ve been thinking about buying my first real estate property and have a few markets in mind. I’m from the NYC area, but the prices here are out of my budget. 

Now I’m looking into the Detroit and Ohio areas (Toledo, Cincinnati, Cleveland, Columbus) since they seem to have growing populations and affordable properties under $200k as well.  

Thanks!

As others said out of state can be more challenging based on location but local or out of state both can be done. 

Local. Keep looking. Being local affords many conveniences based on access and your knowledge of the area. Too expensive? Every area has deals. RE is being bought and sold in every city or township around the world. You just need to find the deal. Money? You can use other people's money if the numbers work. Money should never be an issue.

Out of State. Certainly more options because you are no longer limited by imaginary boundaries of traffic and time. You can buy and rent anywhere. Ohio is a great landlord state. Check out Cincinnatireia they are a huge REI group in the SW area. Consider hiring a Property Manager to manage out of state properties. There's a value to that service. Yes, I am a property manager but even I use a 3rd party PM for my properties that are out of state. Again, if the numbers work, and you can fit in the cost of a PM service, what's the holdup? It's even easier. Make money and someone else deals with the problems. Local or out of state work if the deal is right. 

in fact, consider including the numbers for a property manager anyway. What's the risk or cost to you if you face an eviction or a bad tenant because you used basic screening techniques? I talk to so many people who regret not getting a PM up front because they are having problems or high eviction rates doing it alone. Or tenants know they are the owner and take advantage of that. A PM offers so many additional services in addition to things you cannot do yourself - like simply having a 3rd party between you and the tenant. Will tenants take advantage of you? Will they "check themselves" from bad behavior when they see a professional company with professional services, legally reviewed lease, etc. managing their day-to-day? Is saving the fee a PM charges worth the potential thousands in cost and headaches? It's important to ask yourself, and be honest with yourself, how you would handle managing tenant situations if you were to become a landlord.

A good deal is different to everyone. Someone with $10M in the bank in cash just needs to put a lot of money to work and time value and tax write off is more interesting to them than a hungry investor in their 20s that has never found a deal.

Honestly, books are great, but they are about as "boiler plate" as you can get as I'm sure you're discovering. Personal criteria, building criteria and area criteria will all affect the way a deal appears on paper. two 100 unit apartment complexes, one in an A area and one in a C+ area will have very different financial breakdowns and interest groups.

Want to know if a deal is good (for you)? Run the numbers on a basket of deals you're looking at. Make note of some important ratios and percentages such as COC return, IRR, CAP, yearly maintenance vs acquisition price, etc. Build a big list of evaluation ratios etc. The best deals will all have a handful of financial ratios/percentages in a certain range. Once you've identified what's important and what ratios to look for to evaluate a property, all future deals should be weighted against those "good" ratios/numbers - and periodically adjust to suit your goals.

Check airbnb.com stats on airdna or consult. In line with the previous comment look for areas that are up-trending or have solid decades-long traffic...