All Forum Posts by: Warren A.

Section 8 programs will vary in different markets, With that said, I strongly recommend you look before you leap when it comes to section 8. In our SFH rentals in the southeast, I had two back to back section 8 tenants in the same home that caused a lot of damage + turnover cost + eviction costs resulting in about $20K combined costs. I was told the housing authority supervisor in our area transitioned and thus contributed to lengthy delay / backlog in addressing the needs of our home. So it's not always guaranteed income. I now no longer accept section 8 in our rentals.

I enjoy listening to Chad Carson's podcasts.  His "small and mighty investor" / keep it simple theme resonates.  The 2 hours is after a portfolio is established, systems in place , etc.  

We have 2 story SFR in Memphis. Purchased in Sept 2017 as turnkey with major deferred maintenance items addressed. First tenant moved out Nov 2022 and current tenant moved in Jan 2023. Current tenant previously complained Feb 27, 2023 : "The Heater is very Hot on upstairs and it is not coming on downstairs I mean the living room is very cold bedrooms are very hot" but I pointed out that the previous tenant never complained of this issue. PM and I agreed to not action it at the time as the weather got warmer. Details : https://www.facebook.com/groups/biggerpocketsofficial/permalink/1004600267177934/

Yesterday , PM informed me with HVAC vendor #1 quote , "This house has a bad compressor my recommendation is to replace the complete system 3.5 ton along with separating the upstairs and downstairs ductwork so it will be easier to adjust the airflow. Put all upstairs ductwork together and all downstairs ductwork together, also adding a return duct for the upstairs, 2 filter boxes, supply box, drain pan, and furnace feet. The cost of material and labor is $8280. I have dispatched for a second quote and will keep you updated." 

HVAC scope of work back in 2017,

1) Condensate line checked for clearance 

2) Ducts not smashed 

3) AC’s exterior lines insulated & cage installed

The AC unit was not new and as of today is about 12 years old. Given the compressor is bad, I think it makes sense to replace the AC unit . I estimate that alone could be about $4K to $4.5K. However, I am unsure if doing the ductwork is really necessary at this time. Now, the PM did say , "It looks like we've sent about 4 different vendors to address the HVAC, and they all mentioned the airflow" but my suspicion (which I can't prove ) is that all the vendors who went to quote heard complaints from the tenant about the hear air flow in late Feb 2023 and therefore they quoted ductwork (see previous post link above) .Should I just focus on replacing the AC now, see if air flow is OK with new AC unit, and if necessary try to push vendor for less costly workaround for the air flow ? From the previous post, I feel like the HVAC vendors are pushing for the costly nuclear option.  Suggestions?

+1

@Vicki X  is giving great advice here.

Finding a trustworthy PM is not emphasized enough.  PM will make or break you in the long run.  When I first started I put heavy weighting in finding a good PM and even more so than the market itself.  You could be a in a growing market but lose in the long run if your PM is poor performing and/or not honest.

Also due diligence on hazards / natural disasters + risk mitigation + associated costs (i.e. flood insurance needed and impact to your bottom line) should not be overlooked.  

I would marry Vicki X's advice with Melissa's advice above about goals.. start top down.

My PM initially touted Rhino ~ 1 year ago but lately has changed course.  I know that sounds vague but I was not given the details.  What I took away from the brief conversation, however, was that it's not the silver bullet it was thought to be to reduce overall homeowner cost during turnover.

I am in the "it depends" camp.  I have almost hit my # of properties target but am already starting to pay down my loans.  My goal is pay them all off within 13 years using tenant rent only.  I am also saving from W2 to have the option to pay off non investment , fixed debts.  All of this is by design and against life goals and tracked in a year-by-year plan.  To someone else, it may not be the most financially optimized but it aligns with my life goals and helps me sleep better at night.

The states our rentals are in are red and landlord friendly.  I am trying to gauge if Blueprint for a Renters Bill of Rights will eventually make landlord friendly states too tenant friendly to the point that will drive out investors.

I am not trying to incite any political debate. I genuinely would like to understand the risks to Mom and Pop landlords like myself. We currently own SFR portfolio in Memphis and Little Rock. Do you think there will be enough checks and balances? Does it change your long term strategy?

I don't want to overreact but at the same time, I am genuinely afraid of another federal level mandates like the COVID eviction moratorium (which I am still shocked could even be enforced as long as it was). 

I invest in SFRs in Little Rock.

How likely we will see the end to income tax in Arkansas with Sarah Huckabee Sanders?

If likely , do you expect to see a meaningful or massive increase in property taxes to make up for loss in state revenue? How would it change your REI strategy ?

I use Hoffman Team for our Little Rock properties.  Jamie Hoffman is the owner.   Drew gives good points.  I know they manage properties in Sherwood and Jacksonville.  I don't know if Carlisle is too far for them but you could give them a call or email.