OfflineI looked over the inspection report for one of the properties in escrow. Zero problems at all. (The biggest "action items" were missing face covers on the outlets.
One problem remains though... When the city turned over the water, they broke the valve. So the water could not be turned on for thbe inspection.
The valve is probably not a big deal (though I am not offering to pay for it). The bigger problem is that the inspector could not adequately inspect any of the plumbing. My realtor is trying to deal with it. (She is very much on top of it and knows/understands where I stand.)
We may need to extend the inspection deadline. Otherwise, I will have to fail the inspection. (Abundance of caution).
On another property, I got an addendum from my realtor. The seller (bank) will be paying for the termite treatment. That is somewhat unusual.
I called the A/C people on one of my existing units. They had to service it twice in April. I asked what the useful life was. He said basically ZERO. So I have to plan/budget for that and let the tenants know that if the compressor happens to go out, I do NOT want replace it.
I called my bank to verify rent receipt. All in and accounted for (except for the ones that are mailed to me and I deposit). I will get to those later in the week.
I am having all kinds of problems with my pool service. This is the 3rd pool service company I have been with and their service is poor. The tenant is having to email me the sign in sheet to prove that the "technician" was only there twice last month. Otherwise, the company wants to "punt" on the problem- and of course still bill me for it.
When I get that, I will send out a strongly worded letter to the cmopany. It may be time to start searching for "yet another" pool service company. Sadly, their quality seems to be right around that of property management companies.
Update.
I did end up staying with the PM. They did get both houses rented. One was very upscale and was rented immdeiately. Easy money for me and the PM. The rent has been late the last 2 months but still paid- and with late fees.
The other (the 1st one I bought that I tried to rent myself) was in more of a mixed neighborhood (daily yard sales right next to manicured lawns). That took a few months but is now rented and looks very stable. I am thinking not a long term keeper though. This one I will sell once the market turns.
I had 2 vacancies come up. One in early November and the other at the end of the year. The one in November was kept in great shape by the tenant so is ready to go. Still hasnt been filled by the PM which does NOT make me happy. The holidays OFC was the reason/excuse. I will be pressing them hard to get it done this month.
The other was rented longer and a little rougher. It will take 4K in repairs- most of which is flooring related so I am not too distressed about it. It was like pulling teeth to get the PM and his repair person to give me an estimate as to what needed to be done and how much it would cost. A frustrating 3 weeks. It should be done this week. And I will also be pressing the PM to get THIS rented this month as well.
Here are my thoughts on the PM. The boss lady is pretty good. Not great but pretty good. Her assistant is a complete waste of time. Either doesn't respond or doesn't answer my question. So I will be dealing ONLY with the boss.
The price is definitely right at 5% of rent plus some fees to go from vacant to rented. And PMs in general are just NOT very good.
I am now looking at some retail flips. I have a wholesaler who is sending me deals. I am trying to keep them all in the 100-150K (retail) range. I have to weed 80% of them then push them onto my realtor who weeds them even more based on comps and area. But we may have found one that we are interested in. Price is 89K. ARV is 140K.
I am becoming more and more pessimistic on the future of landlording.
Ironically, it is NOT because of the "twin evils" of toilets n tenants. (I think those are VASTLY over-rated as problem areas.)
It is not even because of the dearth of quality property managers (which I know has been a recent theme of my journal).
No, it is because of government. In the past, acting as a small landlord has been VERY tax and business friendly. This has been changing in recent years. I have spoken of this before and I only see this problem getting worse.
More and more governments (and when I say governments, I mean state, city, and county) are taxing rentals. Of course, you have your property tax. That has been a standard for years. They are only going up and even if value goes down, more and more things get added to the bill so the bill may not go down.
But more and more government entities are requiring licenses and priviledge taxes (sales tax on leases). I have seen this trend increase in recent years and it seems to have no end in sight. One option of course is to pass it on to the tenant just like retailers do. I have had some luck doing that. Of course, you risk pricing your rental over market. The tenant really only looks at what their out of pocket is.
I am seriously considering starting an orderly sale of all my rental units.
Another thought on all these government fees/taxes... I said it was my last thought but probably won't be!!
I doubt anyone likes paying property taxes but at least you are getting SOMETHING for your money. At least where I live, you can look at the property bill and see how much goes for this school or that school or this fire dept or that police dept or whatever. You may not agree with what it is being spent on or USE what it is being spent on, but it's something.
Sales taxes and license are a different beast. A complete black hole. You get absolutely nothing in return for them. And when I say nothing.. I don't mean "nothing of value"... I mean LITERALLY nothing.
They started to revamp the rental licensing plan last year and we all had to pay like DOUBLE what it had been. But there were so many complaints, and indecisiveness at the board meetings that the whole thing was cancelled and they sent ALL our money back. No license fees THIS year! Maybe everyone will go home and realize we don't NEED regulating. Think so? (don't I wish.
)
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Yeah.. It doesnt seem like that. The fees have only been going up and expanding ie one city only used to charge for landlord with 4+ units. That is gone. All units are subject to the fees. Also, the actual rate has been increasing.
In one city.. it was to pay for police and fire.. in theory at least. It seems like every single thing I pay goes for police and fire. But supposedly the CITIZENS voted for it. So what can I do but pass it along since the must want to pay it.
I have been on an email list getting properties from a wholesaler. The problem with it is that it's very non-focused in terms of location, price range, property type etc. He just emails me whatever he has and I have to weed through it.
Plus, there is an additional layer of cost in order to pay the wholesaler.
I did make contact with a couple of other wholesalers yesterday. (One sent me a property last night. The location is probably ok but at 70% of FMV it would be a case of "everyone makes money but me"...)
Given all this, I also asked my realtor if we could start digging for retails flips. She is going to pull some MLS stuff Thursday and we are going to pop out some ridiculously low offers.
I had a brief- 20 min or so- phone call with a wholesaler today.
He had his bird dogs on the line (conference call- on mute), trying to get them motivated to go out and hunt for deals with the knowledge that there ARE buyers out there.
It was a lot of funn talking to him and telling him what I am doing, what I am looking to do and what he is doing (short sales and subject tos mostly). The finest kind of networking.
Hopefully some deals will roll out of it.
I was on the phone trying to get the utilities on one of my vacant properties moved into my name. The silly customer disservice person was trying to convince me that I had to pay the ex-tenant's overdue bill before they would switch service.
(No I did not cosign for them. No I did not agree to be responsible for bills other than my own.)
I didnt even feel like arguing with her so just asked to speak to a supervisor who cleared it up right away. Enjoy those collection calls Mr. Ex-Tenant.
Next time I may just ask for a supervisor right off the bat.
I really could do with less local government. WAY less. As in like almost none.
I am always looking for new contacts, new networking, new ways to find properties.
I talked to one company today who has a turnkey system in place.
They buy REOs in bulk then sell them all cash to investors who then retail them on LO or LC/CFD to owner occupants.
All good so far.
The cash on cash return was 50%+. Still all good.
They also have a "lease back" program (not REALLY but that is what he called it) that the management company will make the rent payment to you for 6 months if they cannot find a T/B. That's fine too.
Now it gets dicey.
They want a 2K deposit up front (for what I was not clear but it's payable by credit card! Oh my!) in order to start sending you properties. Then you have 24 hours to say yay/nay to the property and another 7 days to do due dilligence.
Red flag #1: An up front deposit for... well... sort of nothing.
Red flag #2: Some kind of a time rush where you have to decide RIGHT NOW.
I politely declined.
Horrible communication from my PM's maint guy this last week. They are just horrible about following up or telling me about problems.
I guess I need to redouble my communiation efforts, follow up on everything BY TELEPHONE.
In fact, since there are 4 of them, I guess I need to communicate four times as well.
Bottom line: the rehab is delayed but only by a day or 2. Glad I didnt wait any longer to follow up with HIM. (Cuz he sure wasnt gonna follow up with ME anytime soon.)
I have been doing a lot of networking with other investors- mostly wholesalers lately. A lot of email and phone conversations. Some of them sound fairly sketchy ie scams so I am treding very carefully if something looks amiss ie not using title companies, having to put up "deposits" immediately on credit cards etc.
One of the vacancies is filled as of Feb 1. Not at the rent I wanted but I guess it's close enough.
There was some light vandalism at the other vacant property. THe maintenance guy for the property manager ho hummed it. And why not?? It isn't his property.
Just a thought, we are all using CL for RE, how about posting a job listing for a property manager in your area.
People are getting laid off in all fields. Maybe there is someone out there who will take more pride in their work and in your business but just lost their job due to the economy!
Made an all cash offer of 35K on an REO. ARV is ~110-115K. Needs ~15K in repairs.
Heard back from my realtor that there is another identical offer. Bank will probably come back asking for "last and best". I will go to ~40 but no higher.
No chance I let the bank shop the offer.
Realtor has another property in an area close to the one we just offered on.
We will need to get a better deal though because it's priced at 50K. Need to get it down closer to 40.
Offer will be at 40 and Ill have to work at staying close down to that.
Im just not satisfied with my PM. Maybe it's me being unreasonable or the rental market in general. I dunno.
Their rates are reasonable.
They did get 3 of my 4 vacancies filled.
But the rents are low on all of the properties and the last 2 proprties took 3 months to rent.
I called yesterday to find out what the story was on the last vacantone. (It's end of the month time and prime renting time. The PM had previously said she could get it filled this month.) I never got an answer. The PM said she would call me back and never did. I guess Ill be banging the phone again today.
My realtor called me the other day for my PM's contact info and a rec. Apparently, she has investors who are desperate for good/competent PM. I gave mine a lukewarm rec.
Considering posting on CL but I dont want to bounce from PM to PM.
Seeking Property Manager
If you are SUPER aggressive about filling vacancies then maybe we can do some business.
If you produce results instead of excuses then maybe we can do some business.
If this sounds like the type of property manager you are then send me:
Your contact information.
Your pricing and service information.
Your references.
Any licensing and bonding information.
If you are SUPER aggressive about filling vacancies then maybe we can do some business.
If you produce results instead of excuses then maybe we can do some business.
If this sounds like the type of property manager you are then send me:
Your contact information.
Your pricing and service information.
Your references.
Any licensing and bonding information.
This is a great ad. Shows you mean business, and asking for exactly what you want!
If you haven't posted it yet you should.
Wouldn't it be hilarious if your current property manager responded!
Hey, Mark, can you make a list of what YOU feel a good property manager should be/do? I may need one soon (I keep saying that), and I know I'm too soft on people. What SHOULD I expect?
IF you have time.
Thanks,
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
IF you have time.
Thanks,
Rina
For me.. #1, #2 AND #3 is filling vacancies. That is where 99% of the value added is for me.
Calling out service people, writing leases, making the deposit, posting 5 days, calling the attorney, even collecting the rent are all things pretty much anyone can do.
I need a PM who can move from tenant to no tenant to tenant as quickly as possible. Because with my SFRs... when they aer vacant.. it's 100% loss.
As an example.. my PM finally got one of my houses rented. It took 3 months and the rent I ended up getting was 100.00 less than what I was getting. Is it them or is it the market now?? I dunno.. and that is my conflict. What I DO know is that Im out 4200.00 over the course of the lease. That's a "chunk"...
I mean if you are gonna get me 100.00 less per month anyway.. then just START there and get it for me 3 months ago!!!!
(As an aside...I expect to have the same "aggression" problem when I explain to them in 6 months that it's an "auto-raise" on the rent after year one.)
The other thing is.. dont make excuses. It is driving me up the wall. I can't get it rented cuz it's the 4th of July. I can't get it rented cuz it's TGiving, XMAS, New Year's, Valentine's Day. I cant get it rented in the 1st 2 weeks of the month.
It basically breaks down that there are probably 100-125 days a year that they can find me a tenant. Ridiculous.
Lastly, be responsive. Return phone calls. I called my PM around 11am on Monday. Still waiting for that return call. Inexcusable.
The sad thing is... she is probably the best PM I have found. (and at least as good as any my REALTOR has found.)
I probably should START a PM company..
Obviously you have to know how the PM gets paid as well and what they do for it.
Some get paid for finding a tenant (typically a month's rent or so) and then they are out. You do everything else.
Others are full service (as I listed above). They typically take a percentage of each month's rent and maybe a fee for filling a vacancy as well.
Bank countered at 39K with 3K earnest and a Feb 20 close.
That works. We are in. ARV is ~115K.
UBS's loss is my gain.
My sister in law is renting her old primary residence. She got a mother and her 2 sons as applicants.
Mother is a nurse (which means she can work anywhere as much as she wants). And the sons have a 4 year contract to do filmwork. Also good.
This means they have 3 incomes (so if one goes dark then they still have money coming in) and are theoretically locked in for at least years. Great start.
The mother really wanted the place and wanted to give a personal check to hold the place. This is also ok. (It's the last week of the month and people are looking to get settled.)
Where it gets dicey is that they wanted to move in immediately, before the paperwork and pay with more personal checks. ABSOLUTELY NOT.
It turns out that the check given to hold the place was fraudulent. No such account exists and the name on the check wasnt even the ladies.
Hello, Mr. District Attorney??
Luckily, these people did NOT mvoe in or it would have cost a few thousand dollars and a few months to get rid of them. And who knows what the eventual repair bill would have been on top of it.
My realtor just called. The other bank didn't even bother to counter on price. Just moved the escrow and inspection periods around a little.
In at 40. ARV is also ~115.
(These houses are actually fairly close to each other with the 2nd one being smaller but in a slightly better neighborhood.)
Rehab hat on. Good to go.
Just got the addendum from the bank. I'm pretty sure I now know why they are having to dump this house at 30 cents on the dollar.
They misspelled my name on both parts of the addendum.
The 1st part of the addendum had at the bottom of each pagethe following:
"Buyer and seller acknkowledge receipt of a copy of this page, which constitutes Page X of 10 pages."
ie
"Buyer and seller acknkowledge receipt of a copy of this page, which constitutes Page 1 of 10 pages."
All the way up to
"Buyer and seller acknkowledge receipt of a copy of this page, which constitutes Page 13 of 10 pages."
TOP notch work.
Finally got a callback from my PM. We lowered the price under 1000.00. That is a pretty critical breaking point so maybe it will move.
They seem to want to lower the price as low as necessary. Im unwilling to do that.
They misspelled my name on both parts of the addendum.
The 1st part of the addendum had at the bottom of each pagethe following:
"Buyer and seller acknkowledge receipt of a copy of this page, which constitutes Page X of 10 pages."
ie
"Buyer and seller acknkowledge receipt of a copy of this page, which constitutes Page 1 of 10 pages."
All the way up to
"Buyer and seller acknkowledge receipt of a copy of this page, which constitutes Page 13 of 10 pages."
TOP notch work.
Mark, are you sure it's legal and binding? LOL
Make sure you watch the NUBMERS closely.
Rina
P.S. Congrats on the deals. Those are REALLY sweet!!!
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Faxed off the addendum for the 40K house. And FedExed the earnest money check.
(They asked for a photocopy of the check eventhough our contract said we would wire it. I wonder if they even read the contract. Their asking price was 50K. Maybe I should have offered 5K. LOL.)
No word from the PM. Ill call tomorrow for status. I want to know if we got any more calls at the sub-1000 price. Also, I want to verify that we did get full cash and a signed lease on the other property. If it were to fall through, NO WAY the PM would bother to tell me if I didnt ask.
The inspection for the 40K house cam in at 30K+ (re-pipe needed). I am going to pass on that one but would be open to coming back at a lower level. Mayb 20K.
The other inspection was "in the range". Around 20K. So moving ahead with that one.
how do you find properties that are soooo cheap, but yet NOT in a crime zone???????
Don't Wish the Past, Create the Future! - DH