All Forum Posts by: Amy E.

I recently began liquidating my half dozen SFR's. I am just not cut out to be in property management, although generally it has gone really well and I've made a decent ROI. I found an investment company to buy all my properties in one big hunk. The investment company is international, but use a realtor from my state to handle closings, paperwork, find properties, etc.

After chatting up the buyer's realtor, it turns out they are looking for someone in my area to find appropriate homes to purchase (they are located about an hour away from me).  They offered to pay for my realtor's license and classes and to sponsor me.  They basically want me to find houses that make good investments to they can sell to their investors.

I had actually thought about getting my license years ago with the intent to eventually have a property management company; but determined I am not really cut out to have to deal with clients/tenants all day.  This seems like a good compromise.  I get to stay in the business and do the fun part (finding good deals), am not dealing with clients directly, and still get to make a bit of cash on the side (note: I still have a regular 9-5).

Anyway, I was wondering if there are pitfalls I should look out for before moving forward.  What are the benefits of doing this vs. contacting investors directly and simply being a wholeseller (other than the fact I only know the one investor!)?  What type of money does a wholeseller make vs. a realtor on a typical deal?  In this type of relationship, what type of commission would go to me vs. my broker sponsor (I know this will vary a lot, I'm just looking for a ball park).  Do realtor's pay their broker's by year for sponsorship (or deal, etc.)?

Any tips or thoughts appreciated.

What is the etiquette for notifying tenants of the sale of a property?  For reference, these are single family rentals, some rented Section 8 and some not.  Some tenants in a regular lease and some month-to-month.  

Do I wait until after the due diligence period, after closing, etc.?  I have no idea what the new owners intend to do with all the properties.  It is an investment company and when I googled them they have rentals but they also do rehab flips.  Not sure what their intent is for these.

Last month, I sold an empty SFR pretty easily. I actually posted in my local REIA facebook page and an international investor and I made a deal. This investor has expressed interest in any other properties I may have.

I've got 5 SFRs that are all leveraged by a single commercial mortgage, so I'd like to sell them all together.  All 5 are rented, but with two  are on month-to-month leases, so I could feasibly get those empty pretty easily prior to selling if that's what the investor wants (I know inheriting tenants is a very opinionated topic).

What are some good tips for presenting my inventory to help me get the best price? I know I need to provide rent roll and such, anything else?  Should I include any specific numbers/values up front to make it easier for them to see their bottom line?  Should I offer to empty the the month-to-month houses or wait for them to ask?

@Marc Winter,

You have totally hit the nail on the head, it is maintenance requirements driving me bonkers.  I tend to do okay with specific trades (plumber, electrician, carpenter, tree guy, etc.).  But I have yet to find a good handyman, and most of my properties need some light maintenance after a tenant moves out that I can't find anyone to come do.  For instance, I needed a light installed, some tile repaired on a bathroom wall, a piece of trim and a door replaced.  Nothing major, maybe $150 in material.  But I couldn't find anyone to do the labor.  So the house sits empty until I can get around to doing it myself.  I don't have much turnover, but even if a house turns over once every three years, that's still at least twice a year that I am losing rent because I "can't get around to it" for the light maintenance.  I am struggling to find an "on-call" maintenance guy and even just a basic handyman.  And, many times, I have to go look at the issue to figure out what is needed (is this water leak an A/C drainage problem, or do I need to call a plumber).  The tenants are usually not knowledgeable enough to tell me what's needed, so I have to go access first.

There are no NARM members within a 50 mile radius of me...but that's a good idea to contact the closest ones for advice.

Can you provide the name of your hotline service?

I've started investing in SFR's in 2014. I've got six right now, and I am thinking about crying "uncle" and hiring a property management agency. I work full time, and the rentals are making a ton but not enough for me to get out of my 9-5 to manage them full time. I feel like I can't expand anymore unless I get help, and to be honest I'm kinda tired of doing it myself (why is it that EVERY time I go out of town, a crisis happens....seriously, every time). I've got decent tenants now, and not a whole lot of turnover, but due to some other life factors its getting to be too much for me.

That said, I'm not sure how to find a good property management company.  I'm in a somewhat rural area, and my state requires that property managers be real estate brokers.  So pretty much all the local realtors also manage property, but it does not appear that they do it well.  For example, when I go to their websites to see the properties available to rent, they are almost all rundown and not properly taken care of.  I know that's not necessarily a reflection on the manager (I mean, if the owner won't pay for the repairs, that's on them), but it doesn't fill me with confidence in their abilities, either.

How do I go about finding a good property manager?

Hardly any multi-family in Warner Robins. Macon has some, but the prices don't always work, IMO. In Macon, try to get near Mercer, Mercer Law or Wesleyan for student rentals. I do Section 8 in Warner Robins with SFR's. I still have trouble screening tenants sometimes (I'm 6 for 8 in terms of good tenants), but am making a good amount with those. I buy in the $50k range for section 8 and rent at about 950/month for a four bedroom.

I manage properties for section and don't mind if you want some advice (just PM me). I can't manage property for you, as I do not have a broker's license (this is required in GA). I have six SFR's in Houston County and five of them are currently rented Section 8.

It's super easy to do.  Just screen like you would a regular tenant and you are good to go (with the added benefit of guaranteed rent).  It's gotten to the point where a Section 8 applicant doesn't phase me at all, but a "regular" one does...because the rent is not guaranteed!

I've had tenants put small holes (like golf ball size or smaller) in walls, but typically they are behind a door (where teh door knob hits).  To fix this, I usually just put one of those large round, plastic door knob stops over the hole.  Prevents the hole from getting bigger without me having to patch/repaint.

This time, I've had a tenant put a hole in the wall, the wall has wall paper and its nowhere near a door.  Tenant has moved out (yes, I kept back some deposit).  But, I do lower end rentals and am really not concerned with looks all that much.  Still, putting random door knob stops in the dining room seems a bit low class even for my level of renting.  To top it off, this wall has wallpaper on it and I don't have any that will match.

Any other suggestions that won't look horrible?  If I actually fix the holes, I'll have to either strip and re-paper or repaint the entire wall.

I'm in warner robins.  I looked into Fort Valley, but I figured students would prefer to be close to campus and didn't find much foe sale that met my profit criteria and seemed worth the effort.  There did seem to be some fixers uppers that may work, though.

I started buying rentals about 3.5 years ago. I now own six and its gone awesomely. I bought three with cash, leveraged them and bought two more with cash. Leveraged those and bought one more. I like to buy in cash, because I find it easier (I'm in the $50k price range) and I currently have 5 of the 6 houses leveraged within a single commercial mortgage at 80% of their value. Because I have a business partner, the loan is in the name of an LLC. I'm at the point where the remaining equity that I could take out with traditional loans (80% down payment required) would not be enough to completely buy the next house. So obviously I'm unable to continue with my current funding strategy.

I'm wondering what the next step is.  I could keep leveraging, and just eek out enough from the most recent purchase to put a down payment on the next one.  But that would probably only get me another two houses or so with the added complication of having to buy with a mortgage and that makes the sale more complicated which I'd like to avoid.

I could stop taking profit from the business, and instead reinvest the profit to buy the next house.  But it would take 14-16 months to get enough for a down payment, and 5 times that to buy a house outright.

I could ditch expanding the business, and just go out on my own and get a personal mortgage for an investment property.  But, again, I think I would only be able to scrap up enough cash to do one or two houses.  Ditto for scraping up the cash and putting it back into the business, I'd run out after another house or 2.

I'm not ready to be a full time investor, and I still have a 9-5 job.  But the business is going so well I can't help but want to expand it.  In my head, I'm thinking 10-12 properties would be the perfect amount.  I can't help but feel that that is not a huge portfolio, so I should be able to figure out the funding issue.  

Any suggestions for funding?  Or am I stuck just taking it slowly?