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People want cool old houses until the moment they own a cool old house.
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May 14, 2013 00:08
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Has anyone owned rental property in the DC area? Wondering how bad DC landlord-tenant laws are and how expensive it ends up being to keep the place up.
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May 16, 2013 10:34
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I found a decent resource for new and potentially new rental owners at http://www.biggerpockets.com. They have a Beginner Real Estate Investment Guide that provides a good summary of some of the different aspects of how to get into the business and get yourself setup. They have other useful guides like Estimating ARV (which stands for After Repair Value for folks like myself who didn't know) and a bunch of other useful guides in their Learning section. No magic bullets here but plenty of useful information if you're trying to figure out how to get started.
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May 16, 2013 13:01
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KaiserBen posted:Has anyone owned rental property in the DC area? Wondering how bad DC landlord-tenant laws are and how expensive it ends up being to keep the place up. MD, DC or VA?
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May 16, 2013 13:16
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TheLizard posted:MD, DC or VA? All three. I'm in VA, but looking at jobs on the MD side as well, and a few in the city proper. I'd prefer VA, since I know the law on this side of the river, but there's not too good rental property in the suburban sprawl that makes up this side of the Potomac.
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May 16, 2013 16:38
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KaiserBen posted:All three. I'm in VA, but looking at jobs on the MD side as well, and a few in the city proper. I'd prefer VA, since I know the law on this side of the river, but there's not too good rental property in the suburban sprawl that makes up this side of the Potomac. In MD the law is heavily tilted towards the tenant. My realtor told me it can take 4-6 months to get someone out if they need to be evicted.
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May 17, 2013 00:33
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Authentic You posted:My dad keeps encouraging me to buy a house here (even though I'm loving broke), and that the way to do it is to buy some hulking Victorian that's been chopped up into apartments so that I could have built-in tenants to pay down the mortgage, and then boot them out one by one as reabsorb the divided units and restore the house to its former glory. I mean, I want a cool old house, but I don't know if I want to deal with tenants while trying to restore it. In the city that I'm in, the Victorians sit on prime condo/apartment land, but cannot be redeveloped due to heritage rules. What many people have done is divide them up and rent them to undergrads. In a few years, they are so beyond repair that they lose the heritage status and the owner can do whatever they want with the property. Maybe this is what your dad wants?
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May 17, 2013 16:22
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Isentropy posted:In the city that I'm in, the Victorians sit on prime condo/apartment land, but cannot be redeveloped due to heritage rules. What many people have done is divide them up and rent them to undergrads. In a few years, they are so beyond repair that they lose the heritage status and the owner can do whatever they want with the property. Maybe this is what your dad wants? Quite the opposite, actually. My dad builds houses on the side (he's in commercial real estate development), including Getting a house with rentable units would just make it easier to afford (and a better project - my dad LOVES projects and I think he's trying to live vicariously through me and my hypothetical house).
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May 17, 2013 17:56
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Authentic You posted:Since it was a 'remodel', he essentially got to follow 1900 building code What? Maybe the law is different where my property is but any remodel work done has to follow current building codes.
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May 18, 2013 23:09
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In some states there are certain thresholds that can be triggered when you remodel a house. My state passed a law that mandates the installation modern insulation with windows, walls, and the like if you were to change them in any way...all at code. So you can't throw a piece of insulation into the wall if it's not the right R value...even if there was no insulation there to begin with. I manage 2 run-down rental houses and in one I have fantastic tenants and in the other house has been a mess. The primary occupant, Bernard, invited his wife's parents to move in. They happened to be a special type of inbred malevolent trash that were beyond horrible. So Bernie and I soon realized we had to get them out after the thefts, trash burning, the father pissing all over the floor, etc. I consulted a lawyer and advised us that we just evict all of them and let the Bernie and his wife stay with a new contract. Wisely, we let Bernie drop the news and what followed was 10 police cars, a swat team, and shots of my lovely run-down house all over the nightly news. The father-in-law Roger took his pistol and emptied a clip at Bernie. Lucky for Bernie, Roger was a 400lb diabetic with a trach tube and bad aim. Flash forward to last week, Bernie asked if I wanted to speak at the sentencing coming up. I declined. Roger had been convicted of 10 felonies, but only after a spectacularly retarded defense on the stand. Anyways, my brother-in-law's father was a slum lord with a collection of a dozen or so properties in lovely New England neighborhoods. Once the tenants would leave, he'd automatically keep the deposit, and try to fix it up for the next lovely tenant...IF the place didn't randomly burn down first...if you know what I mean. I really don't know how he got away with it so many times.
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May 19, 2013 06:38
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My family has a rental property in a college town that I managed until I moved too far away, so all of our tenants are college kids. We always make them have cosigners so if the kid is a deadbeat and doesn't pay rent we can hit up the parents. We haven't seen too many problems... yet. Mostly them being overdramatic about routine maintenance issues ("the garbage disposal is making a funny noise! WE ARE GOING TO DIE"), or them ignoring issues until we call them going "yo WTF?" after receiving a $100+ water bill (normally ~$40) and them going "oh yeah a toilet's been running..." It's mostly issues that arise from them being away from mommy and daddy for the first time and not really knowing what's "normal" for apartment living. We include water/sewer/trash in our rent because if the kid decides they don't have to pay bills (a lot of college kids don't realize you have to go pay bills and they don't magically pay themselves  ) then it can come back to bite us since the town can place a lien on the property for unpaid utility bills. We don't want to get into legal/credit trouble because of some dumbass tenant. This is definitely a thing you need to look into when buying a rental property.
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May 19, 2013 15:10
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Aquatic Giraffe posted:We don't want to get into legal/credit trouble because of some dumbass tenant. This is definitely a thing you need to look into when buying a rental property. THAT is really good advice. Thank you.
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May 19, 2013 16:14
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You know renting to undergrads is bad when i took out all the trash and swept and wiped my unit down during moveout and the maintenance guy loving hugged me because nobody in my building had ever done that for him.
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May 22, 2013 21:23
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That's just sad. I'm planning on a week of thorough scrubbing of my place after I move out. Renting to undergrads is both good and bad-- you pretty much have guaranteed occupancy so your place is never unoccupied for long and you can require cosigners on the lease so deadbeat tenants aren't too much if a problem; but you have to deal with kids living on their own for the first time which is often disastrous. If you do rent to undergrads, have a party clause in your lease. Ours says no gatherings of more than 10 people. They will ignore it and still have parties, but if they clean up well you'll never find out. If they ruin the place, you can hammer their rear end for lease violations. The legality of this may vary by state so you might want to check.
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May 23, 2013 22:25
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Peven Stan posted:You know renting to undergrads is bad when i took out all the trash and swept and wiped my unit down during moveout and the maintenance guy loving hugged me because nobody in my building had ever done that for him. Aquatic Giraffe posted:If you do rent to undergrads, have a party clause in your lease. Ours says no gatherings of more than 10 people. They will ignore it and still have parties, but if they clean up well you'll never find out. If they ruin the place, you can hammer their rear end for lease violations. The legality of this may vary by state so you might want to check. Probably a good idea, even if just to enforce it in case things get out of hand. Like, hosting a big Thanksgiving for all your classmates that couldn't get home? Awesome! Raging kegger where windows and floorboards get broken and the cops and fire department gets called? Yeah... ANMAN posted:In some states there are certain thresholds that can be triggered when you remodel a house. This, pretty much. And I probably meant retaining old zoning in some cases, not building code - the building code stuff was namely getting away with the single-paned windows, and the multiple wood-burning fireplaces (which might be a zoning thing), and probably something about window:wall ratio or something. You can't do that poo poo with new houses. Otherwise, the construction was all nice and modern with proper insulation and a foundation (the house originally had no foundation and was single-wall construction, like literally, plaster and shingles mounted onto opposite sides of the same boards). As for zoning issues, the remodel enabled us to keep the house on its original footprint up in the corner of the property. Tearing down and rebuilding would have reset the zoning, requiring us to place the house in the middle of the lot and on top of my great grandmother's mature garden, which includes an absolutely giant and beautiful cutleaf maple, and that was unacceptable. Oh, and we would have had to reduce the number of stories from four to two with new construction. My dad got away with a lot of poo poo, and the town council still hates him 15 years later.
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May 24, 2013 00:10
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I've got a question about property management companies, if anyone has experience with those. When, say, a government organization tells a rental property's management company that X needs to be fixed, what is the process like? Can the property management company go ahead and do it, do they need to get permission from the owner, do they have a certain amount that the owner lets them spend on repairs without needing approval, or something else? A run down of how property management services run would be great, if someone doesn't mind. The way I loosely understand it, they get the rent and maybe repairs come out of that and they pocket what's left over? Gringo Heisenberg fucked around with this message at 10:20 on Jun 2, 2013 |
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Jun 2, 2013 10:09
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Gringo Heisenberg posted:The way I loosely understand it, they get the rent and maybe repairs come out of that and they pocket what's left over? If the property manager kept all the rent, then how does the owner make any money or pay his bills? Agreements for property management can vary wildly but for small-time landlords, it's generally 5-15% of the rent and they handle tenant screening, rent collection, and are the first line of contact for problems and issues from the tenants. Repairs can be handled however the contract terms are written, so basically whatever you are comfortable with.
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Jun 2, 2013 16:52
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Peven Stan posted:You know renting to undergrads is bad when i took out all the trash and swept and wiped my unit down during moveout and the maintenance guy loving hugged me because nobody in my building had ever done that for him. I can see that. In our renting days, we always got our security deposit back and people acted like we had some sort of magic, but nine-tenths of it is cleaning a place well. Honestly, it's so easy to clean a bare apartment, I don't understand why more people don't do it. That said, the remaining one-tenth is, I'm sorry to say, being willing to go to court. There's a certain number of small time landlords who are sleazy and treat the security deposit as easy pickings. If you don't want to be that person, know your obligations and keep on a professional footing with your tenants.
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Jun 2, 2013 17:13
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Gringo Heisenberg posted:I've got a question about property management companies, if anyone has experience with those. When, say, a government organization tells a rental property's management company that X needs to be fixed, what is the process like? Can the property management company go ahead and do it, do they need to get permission from the owner, do they have a certain amount that the owner lets them spend on repairs without needing approval, or something else? I'm not 100% sure for single family homes, but generally with things like code violations if it's on the outside they can just send someone out to do it. If it's inside, they give a day or two warning to the tenant that someone is coming in. Major repairs will always involve the owner in some way.
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Jun 2, 2013 17:48
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DNova posted:If the property manager kept all the rent, then how does the owner make any money or pay his bills? Sorry, I didn't phrase it right. I had assumed they got rent and used it to take care of all the expenses and pocketed the rest, the owner getting the value of the house when they sell. I just assumed it was that way because of all the run down poo poo holes I see that are run by property managers. But percentage makes a lot more sense. Thanks.
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Jun 2, 2013 19:49
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So a long time ago I asked the mod to start a rental/investment property megathread and got permission. But then I realized that my experience was a narrow slice of all the different types of investments (rentals, duplexes, commercial, empty lots, foreclosures, etc. etc.) so I tried to research other areas and then since I'm a lazy rear end in a top hat nothing ever came of it. So I'll just give my experience here. I got interested in rentals for a weird reason. My girlfriend had an old fridge she wanted to get rid of, so she put it on Craigslist for free (it was pretty rude looking). Some guy showed up a couple hours later with a beat up pickup truck and said "great, I'll put it in one of my units". The gears in my brain started turning and I thought to myself 'beat up pickup truck, low Philly property taxes, free appliances, this guy must be making huge profit margins'. I'm usually a very negative and pessimistic person that thinks a business idea will never work, but I began scouring Craigslist, Zillow, a handful of other sites, and just driving around Trenton in general looking for a good, cheap property to buy. Long story short I bought a three bedroom townhouse with the tenant in place for $35,000. The rent is $900/month. It's probably the best deal I've ever made in my life. That being said, there have been some challenges. The tenants speak almost no English, I speak almost no Spanish. Even though the house is in pretty good shape, it seems like they need to bother me about something every month to feel like they're getting something in return for their rent (beyond just the use of the property). They've complained about all the mice in the house and I've told them repeatedly that they need to put all their food away and there's nothing I can do about it if there's food all over the house. They complained about condensation in the refrigerator, I got the name of an appliance guy from the seller and he fixed it for $50. They complained about the stove smelling like gas, I went out there several times and had a plumber go out and we couldn't smell anything. Eventually I replaced the stove because it was old as hell anyway. The one thing I feel REALLY bad about is that the tenant called me once because the heat wasn't working. I didn't understand her on the phone so I just told her I'd get over there when I could. This is back in January and it was pretty cold. She called me the next day and was almost yelling at me (she's never does that). So I got over there and realized what was going on and called the plumber to come look at it. Thank god it was a quick fix, turns out they had been turning the thermostat back and forth between 50 and 90 to turn the heat on and off and that caused an arc in the furnace. The plumber replaced a jumper on the control board of the furnace and it was fine. I really felt like a dick for leaving them in that cold house overnight, even though it wasn't on purpose. I'm very aware that based on the property value and the area people assume I'm a slumlord, and I do my best not to be one. About three months ago I bought another property from the same seller for almost the same numbers. I figure if I can get 10-15 properties and own them outright, that will be a nice little side business that can keep me afloat between jobs and make for a really nice living otherwise. As for advice for people considering it... I say do as much research as you possibly can. Talk to a real estate lawyer in your area (they'll do a free consultation) and ask them about stuff like "how hard is it to evict tenants?" and "what kind of landlord tenant laws do I need to be aware of?" ask them if they know of any good RE agents. Just talk to people in the business as much as you can. I personally will not purchase an investment property if the rent is less than 2% of the purchase price. If you do the math, I did substantially better than that on my properties, more like 2.5%. It leaves some financial wiggle room, and as a new landlord, you'll probably need it. Finally, don't let people discourage you with horror stories. Yeah, stuff happens, but you'll deal with it. I still remember the first time I rolled up to my property for the first time and collected rent. Knock on the door, tenant opens it up, hands me a wad of bills. I count it, say "thanks", and drive away with a poo poo eating grin on my face.
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Jun 3, 2013 02:23
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A $35,000 3-bedroom rental infested with mice makes you a slumlord, I'm sorry. I'm not judging by any means though. There's a lot more profit margin in owning places like that than nicer places.
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Jun 3, 2013 21:06
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DNova posted:A $35,000 3-bedroom rental infested with mice makes you a slumlord, I'm sorry. I'm not judging by any means though. There's a lot more profit margin in owning places like that than nicer places. What am I supposed to do about the mice? I've been to the house a half dozen times setting traps. If they leave food out of containers, they will get pests, it's that simple.
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Jun 4, 2013 01:04
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^ I actually agree with you, but have you tried looking to see where the mice are accessing the house from? Maybe there's a hole in a wall or something, could help.
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Jun 6, 2013 06:31
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I manage a couple of buildings in Los Angeles, one triplex which is my own, and two eight-unit buildings which I bought with family members, but I solely manage and they just get a check (or not, depending on the quarter!). I wanted to be a landlord ever since i took an accounting class in college where the professor spent about 50% of the class discussing the amazing tax benefits of owning rental property. It works out pretty well, although not as well as it used to (before Reagan overhauled the tax codes). I spent a lot of time researching the market and reading about investing and being a landlord. Most books out there are crap, but there are a few that are are useful. The crap ones either offer overly optimistic encouragement without any practical details, or worse, exist to establish the author as a guru. I see that the OP mentions bigger pockets a few times. I have spent some time on there and while they have good information and helpful people, there is also a lot of noise and people just trying to promote themselves. Many BP members are investing in depressed areas in Middle America, where you can buy a 3BR house for $75,000 and rent it out for $900 per month. That is completely foreign to me. I saw a mention of the 50% rule. There is a lot of talk on that forum about the 50% and 2% rules. The 50% rule is that you should analyze properties you are considering buying with the assumption that your expenses will be = to %50 of your gross income. Now, in any given year your expenses will be lower, but this assumption includes capital expenses, such as a new roof which may only happen once every 10 years, so it purports to take into account an average expense ratio over a long term. This rule does not take your loan into account - that would be an additional expense if you financed your purchase. I think the 50% rule is a pretty good, if conservative, estimate. I have found my own expenses to be between 40-45%, including some big fixes of the previous owner's deferred maintenance. The 2% rule is a rule of thumb saying that if the monthly gross rent is = 2% of the purchase, price, its probably a good deal. That means that for the $75,000 house above, getting $900 a month rent would not be an acceptable deal - the 2% rule says it is a good deal if you can rent it for $1500 per month. The 2% rule only works in certain areas - for example, it is hard to find something in LA where the rent is = 1% of the purchase price ($750 in the house example) and 2% would have to be in a very bad area with some special circumstances causing a discounted price. I am happy to answer any questions about my experience in general, or about being a landlord in Los Angeles (which has a lot of special rules, such as rent control, that can make it challenging to be a landlord). EDIT: I see Blackjack2000, above, actually has property with an even higher cash flow than the 2% rule... that's great - what part of the country are you in? Four Finger Wu fucked around with this message at 16:36 on Jun 9, 2013 |
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Jun 9, 2013 16:34
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Always happy to get more input. Since I don't have any experience myself reading the thoughts and opinions of others who have made the jump is extremely helpful. Four Finger Wu (or anybody else), do you have any specific recommendations on literature to read? As you pointed out the amount of noise in this industry is appalling and trying to sift through it to find actual information is brutal. As I've done more reading I'm starting to get a better idea of what to look for when it comes to actually purchasing my first property. What I'm not having much luck tracking down are good tools for putting hard numbers together. I've come across a few excel spreadsheets for sale (yeah right) that claim to do this for you but that's about it with one exception. The exception is http://www.finestexpert.com/ which on the surface seems to do a lot of the number crunching and takes into account a lot of variables. But again, lack of experience leaves me wondering if it can be accepted at face value. Does anybody use this site or have any similar resources they would recommend? Something else I've been trying to hunt down is a local landlord association. I'm in a city that is large enough that I would think there would be one here but I'm having no luck tracking one down. TouchyMcFeely fucked around with this message at 01:40 on Jun 10, 2013 |
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Jun 10, 2013 01:37
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Four Finger Wu posted:EDIT: I see Blackjack2000, above, actually has property with an even higher cash flow than the 2% rule... that's great - what part of the country are you in? I live in Bucks County, PA. The properties I own are in Trenton, NJ. If you read the fat-wallet thread it seems like the prices I paid and the rent I receive are in line with what other landlords are getting in economically depressed areas. EDIT: For example, I could buy a lot of houses in North Philly that would have similar returns, same with Camden. I imagine at some point I'll be renting to section 8 and I've done a lot of reading on that. /EDIT One thing I will say is that I was REALLY patient in looking for the right deal. I drove around Trenton looking for for sale signs on houses, I scoured Craiglist, Realtor.com, Zillow, Trulia, all the sites. I didn't end up checking out foreclosures beyond looking at REO listings and other internet stuff because I didn't feel comfortable with that game, there are all kinds of ways you can get screwed with liens and unexpected damage, and you can't inspect. I walked away from a house that originally listed for $60k but the seller's agent said they would do $20k, the tenant was paying $800/month in rent. That's FOUR PERCENT. But I met the tenant and didn't get a good vibe. I walked away from houses that were in poor shape but in nicer areas of Trenton because I couldn't be sure that I would have the resources or energy to rehab them. I only did the deals I did because I became convinced that I almost couldn't lose. I met the tenants, I had a lawyer, I had both properties inspected and appraised, I had CO's from the city, I protected myself in every way I could imagine. I'm still uneasy because of my lack of experience. I've still never had to fill a vacancy or deal with major maintenance issues. Blackjack2000 fucked around with this message at 04:04 on Jun 10, 2013 |
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Jun 10, 2013 03:53
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TouchyMcFeely posted:As I've done more reading I'm starting to get a better idea of what to look for when it comes to actually purchasing my first property. What I'm not having much luck tracking down are good tools for putting hard numbers together. I've come across a few excel spreadsheets for sale (yeah right) that claim to do this for you but that's about it with one exception. What kind of number crunching are you trying to do? I only estimated PITI (you can make your own spreadsheet for that) and compared that to anticipated rent (you can estimate vacancy and maintenance if you want, I didn't, I just tried to make sure the margins were fat enough to absorb that stuff.) rejecting any property with rent < 2% of purchase price or a bad Rent minus PITI result (Trenton has high property taxes so it kills a lot of otherwise good deals.) The properties that survived that test I investigated directly.
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Jun 10, 2013 04:02
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I'm interested to see what people's thoughts outside of America (e.g. Australia, since I live here) are. For instance, in Australia I'd save the average selling price of a house in any decent sized town/city (minimum 30k) would be $200k (conservative) and in Capital cities more likely to be more around the $400k mark. I guess most people in these situations become landlords for tax purposes, but I'd still be curious as to how they work it and such.
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Jun 10, 2013 13:52
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Blackjack2000 posted:What kind of number crunching are you trying to do? I only estimated PITI (you can make your own spreadsheet for that) and compared that to anticipated rent (you can estimate vacancy and maintenance if you want, I didn't, I just tried to make sure the margins were fat enough to absorb that stuff.) rejecting any property with rent < 2% of purchase price or a bad Rent minus PITI result (Trenton has high property taxes so it kills a lot of otherwise good deals.) Maybe I'm just trying to make it more complicated than it really is. The properties I was looking at work out to be less than 2% so they wouldn't be a good starter anyway. For these low cost properties that you purchased, did you buy them outright or were you able to get a mortgage? If you did get a mortgage were there any special rules or stipulations due to the fact that you were buying rentals or because the purchase price was so low?
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Jun 10, 2013 13:58
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I see renting for 2% of its value thrown around all over the place as a rule of thumb, is it a sign that one should rent if rents are under 1% of property value in a neighborhood? There's an upper middle class neighborhood near me where there are only a couple of rental houses, but they are being rented for $2400/mo in an area where homes are $380k+. Is this insane landlords losing money?
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Jun 10, 2013 17:02
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Weinertron posted:I see renting for 2% of its value thrown around all over the place as a rule of thumb, is it a sign that one should rent if rents are under 1% of property value in a neighborhood? There's an upper middle class neighborhood near me where there are only a couple of rental houses, but they are being rented for $2400/mo in an area where homes are $380k+. Is this insane landlords losing money? They may be losing money, or they may be making it, using the value and rental rate is not enough information to determine. You can pay cash for a property like that, and make 1500$ a month on it. You're cash return will be miniscule but you're making money. If you finance a property like that however, that 1500$ goes towards P&I, and you're probably losing money each month, although there are some intangibles that may mean over a long period you end up ahead. For example, your principle is dropping each year, so that's say +7k in this sort of scenario, and the house may appreciate, let's say 3% so that's close to +12k. That is an increase in your net worth but it's not necessarily a great idea when you can get all three, cash flow, principal reduction and appreciation. Often times people renting houses like that are either former occupants of the house who couldn't or didn't sell for some reason, or people who are just stupid and assume that since 2400 > 2000, that they are making 400$ a month. They may, until the roof needs to be replaced.
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Jun 10, 2013 18:40
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TouchyMcFeely posted:Four Finger Wu (or anybody else), do you have any specific recommendations on literature to read? As you pointed out the amount of noise in this industry is appalling and trying to sift through it to find actual information is brutal. William Nickerson is dated, but a good general strategy - he focuses on buying properties, fixing them up, and then trading them for bigger properties also in need of fixing. His first book is How I Turned $1,000 into Million in Real Estate in My Spare Time (http://www.amazon.com/Turned-into-Million-Estate-Spare/dp/1607964244/)... followed by updated versions Three Million (http://www.amazon.com/Turned-Three-Million-Estate-Spare/dp/0671201255/) and Five Million (http://www.amazon.com/Turned-into-Million-Estate-Spare/dp/0671253689). It looks like One Million has been reprinted but Three and Five are still old editions. The books are very old so they are a bit folksy and recommend discriminatory practices that are illegal in the US these days, but it is entertaining and his general philosophy is sound. You can decide if you want to shell out for his books, but John T. Reed has some good conservative free information about investing, and some pretty haterish (but generally well-deserved) comments about other gurus. He recommends Nickerson. http://www.johntreed.com/realestate.html
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Jun 10, 2013 22:46
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TouchyMcFeely posted:Maybe I'm just trying to make it more complicated than it really is. The properties I was looking at work out to be less than 2% so they wouldn't be a good starter anyway. You don't necessarily need to reject any house that doesn't hit 2%. I did because there were so many houses available it helped narrow my options. Let me point out that my property taxes on the first property are $3k/year. So I'm paying almost 10% of the cost of the house every year in property taxes. If you're in an area with lower rates, your "1.8%" property might be as profitable as my "2.5%". Financing these properties is always tricky. There's a hundred different ways to go. I work for a bank so I got a mortgage through their Associate (employee) Lending department. I would just start calling banks and seeing what they tell you. Ask them how small a loan you can get, what products they have for rental properties, etc. Call big banks, call credit unions, and call the little local banks. Most banks aren't crazy about doing such a small deal, but if you're a good credit risk you should have some options out there. Most investment property loans require 25% down and cost around 1% more APR. Also, my bank wanted to see enough liquid assets in my accounts to cover 6 months of payments and six months of payments on my primary residence. Another way to go is seller financing. I have no experience in this, I did propose it once but the seller was not interested. Your best bet here is someone that doesn't want to be a landlord anymore but doesn't need the upfront cash. Do you have a rich uncle? I do. I thought long and hard about asking him to lend me the money. I decided against it in the end, but under the right circumstances I probably would do it. You could even go the consumer finance/credit card route. I don't have the stomach for that, but I know people that got started that way and now make a lot more money than I do. It's probably at least partly due to the frugal management style it imposes.
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Jun 11, 2013 00:53
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Four Finger Wu posted:William Nickerson is dated, but a good general strategy - he focuses on buying properties, fixing them up, and then trading them for bigger properties also in need of fixing. His first book is How I Turned $1,000 into Million in Real Estate in My Spare Time (http://www.amazon.com/Turned-into-Million-Estate-Spare/dp/1607964244/)... followed by updated versions Three Million (http://www.amazon.com/Turned-Three-Million-Estate-Spare/dp/0671201255/) and Five Million (http://www.amazon.com/Turned-into-Million-Estate-Spare/dp/0671253689). It looks like One Million has been reprinted but Three and Five are still old editions. The books are very old so they are a bit folksy and recommend discriminatory practices that are illegal in the US these days, but it is entertaining and his general philosophy is sound. I just read some articles on John T. Reed's site, and wow, that guy is a bitter, skeptical, old crank about real estate. That's probably the attitude that you have to have to consistently make money in that field though.
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Jun 12, 2013 01:35
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So the property management company I'm using got an application and sent me the signed lease a few days ago. I ran their names through Maryland's court case look up and there are a lot of hits for judgements and liens. However, I don't have their credit report so I can't see their past addresses. Hopefully it's different people (their names are not uncommon) but I guess we'll see. I move in 2 weeks. This sucks.
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Aug 30, 2013 02:15
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Edit: misread that as you renting from a company with lots of litigation against it, but I think my post should still stay here: As someone who owns a unit in and lived in a complex with a bankrupt management company with all sorts of litigation against it, RUN. The individual unit owners couldn't take over the HOA till they'd sold a certain number of units, but they went bankrupt and never finished selling or even building the remaining units so we were poo poo out of luck (and still are). Here's a wonderful sampling of poo poo that happened to me as a tenant:
We'd already put money down so we stuck it out. There's no way I would've put up with that poo poo if we hadn't already put down a downpayment. I lived there for three years during which no one new moved in aside from people's roommates moving out and new roommates moving in, it was really fun as a college student because all of our families owned our units so we could basically do whatever we wanted without landlords getting upset, but as a landlord it was a freakin' nightmare. Problem! fucked around with this message at 03:01 on Aug 30, 2013 |
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Aug 30, 2013 02:56
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Did anyone here have their properties built from scratch? What kind of units did you build and how much did they cost? What's the best way to go about buying land? I've always liked the idea of living in and renting a duplex but my guess is that if I buy one used chances are the person selling it is having a difficult time keeping it rented. My parents have also offered me land in an area that is really good for rental properties but the up front cost of building a new duplex worries me. I honestly don't know much about real estate so I would be interested in any books anyone could recommend on the subject.
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Aug 30, 2013 13:52
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TheLizard posted:So the property management company I'm using got an application and sent me the signed lease a few days ago. I ran their names through Maryland's court case look up and there are a lot of hits for judgements and liens. However, I don't have their credit report so I can't see their past addresses. Hopefully it's different people (their names are not uncommon) but I guess we'll see. I move in 2 weeks. This sucks. Did your management company not run their credit as part of the application/screening process? I would think any liens and judgements would ding their scores to a point your management company would have approached you with the red flags before accepting a signed lease. If there is still time before you sign/accept the lease, you could always request a co-signer or even a few months rent upfront.
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Aug 30, 2013 15:26
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A few months ago I started working for a company that runs background searches on tenants applying for rental housing, whether it be through a private landlord or a property management company. In that time I've learned quite a bit about property management in general, so if anyone has questions about tenant screening and selection I can probably shed some light on the topic. To those of you trying to select a property management company, make sure you know what kind of tenant screening they're doing. And if you're renting privately, please consider enlisting a professional screening company to do the screening for you (see below). No matter how good of an internet detective you are, you can't search every single county's criminal records instantly like we can.  TheLizard posted:So the property management company I'm using got an application and sent me the signed lease a few days ago. I ran their names through Maryland's court case look up and there are a lot of hits for judgements and liens. However, I don't have their credit report so I can't see their past addresses. Hopefully it's different people (their names are not uncommon) but I guess we'll see. I move in 2 weeks. This sucks. Most property managers will use a third party company like the one I work for to check the applicant's credit and criminal history and, depending on how thorough they are, maybe even search past evictions, verify income, and call former landlords for rental history. However, some of the more old-school companies prefer to do all of the screening on their own, which can mean nothing but ordering a credit score and checking a few county websites for felonies. You'd be surprised how little that can tell you about a person's ability to pay the drat rent. You have every right to know what kind of tenant selection process your PM company is using. If they have a website they probably have a section with tenant information that lists basic criteria for approval. If not, call them. TouchyMcFeely posted:I saw a a discussion regarding section 8 and one of the posters uses a simple rating scale to determine if they will except a tenant or not. Something like, "bad referral from previous land lord -1 point. Bad referral from 2nd previous land lord -7 points. Working for same company for 2+ years +3 points." etc. If the tenant falls below a certain threshold then they don't get to rent the property. If your PM company is giving you results in a point scale, they probably use CoreLogic SafeRent for their screening. They developed some sort of point system that they swear by, but you need to take like a 3 day course to be able to read it. Plus, there are some things that just kind of need to be automatic fails, not just "-10 points" Owing a balance to another property comes to mind.  I got mod approval to offer my services to any private landlords interested in screening applicants for their rental properties. We have really affordable rates and easy-to-read and easy-to-understand reports that just make a ton of sense. If you're a private landlord or work for a property management company, send me a PM so we can talk about putting a tenant who doesn't suck in your rental property. We work with property management firms with 10,000 units, private landlords with one unit, and everyone in between.EDIT: Here's my direct e-mail for those without PM: info@residentresearch.com EDIT: changed my personal e-mail with the main company e-mail since I don't work there anymore. 
timp fucked around with this message at 03:20 on Apr 30, 2014 |
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Sep 3, 2013 22:51
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