Monday, January 30, 2017

This Week A Unique Investment Opportunity In Memphis Tennessee

0 comments
Hello Everyone,

This week we have a webinar that we set up that offers a unique investment opportunity in Memphis Tennessee. Our guest speaker will be Liz Nowlin from www.MidSouthHomeBuyers.com. This company is currently managing over 1,500 units in the Memphis area.

Their proposal appears to be that you purchase a completely renovated property from them that is already rented. They say theses properties cash flow and they have all kinds of guarantees that they won’t be vacant longer than a certain period of time, etc. They also have financing opportunities.

Come on out and listen to their pitch on this unique concept.

See you there!

How To Determine Market Rents & Judge What Your Tenant Can Afford.

0 comments
A quick Landlord how to on rents... I would say the best accurate place these days to determine what your place should rent for is: https://www.rentometer.com/

Rents should be checked on a regular basis as they typically go up every year. But don’t be surprised if your phone isn’t ringing off the hook during the dead of the winter. The worst 3 months of the year to rent a place in our area are December - February. The rest of the year is typically fine with more than enough people to relatively quickly find a good tenant that passes your criteria.

Rentometer gathers their data from ads that were placed on Craigslist. They have a log of several years of rent in any given area so they often can find properties right around yours that were for rent.

One thing they don’t do is determine if it was a multifamily or not. And you should not have the same rent for your 3br single family house as I do for my 3br triplex. Those of you that have single families should have their rent right up next to the red. I rent my multifamily units above market rent so I like to keep them up by the red as well. But most of what you will see towards the green will be a multifamily houses, apartments, or landlords who are behind on the times and are not trying to get a fair rent for their property. 

The prime time for finding new tenants is between the 13th of every month and the 25th. That is the time frame that you find good quality tenants. Those who like to take extraordinary risks look for places form the 25th and the end of the month. That time that everyone else already has a place. That 25th through the end of the month is also full of those who have been having a hard time fining a landlord who will rent to them due to evictions or a string of bad crimes.

Then between the 1st and the 12th or so you have two types. One is the person who is currently being evicted. They are typically the real nice ones that seem to be awesome people as they have to work a lot harder and find a sucker that will rent to them. The other type looking at that time is the tire kicker. They are going to look ALL month long until they find that perfect place. They want more pictures and want you to jump through a whole bunch of hoops to later tell you that they are looking for the Taj Mahal and your place doesn’t fit the bill.

I’m not saying that different types of people don’t fit into all other parts of the month. I’m just talking in generalities that I’ve learned over the years. If you are not getting a lot of good quality leads in the 1st through the 12th time frame, don’t worry about it. No need to drop your rent as that time of the month is bad for quality potential residents. But if you’re not getting good leads between the 13th and the 25th of the month, than there is something wrong. Either your rent is too high for the condition of your property, or you are not keeping your ad renewed on Zillow and Craigslist, you have a bad property manager showing it, or some other random error you have that you will need to immediately get worked out.

Now you’ve found a good potential tenant. Lets determine if this tenant makes enough money to be able to afford to live in your place. I have historically had my numbers right on the bitter edge of what a person can afford. So close to the edge that if something happens such as their car breaks down or they have some other type of unexpected expense, they will get behind on their rent and will not likely be able to get caught back up unless they get assistance from one of the local agencies that help with homelessness prevention.

That right on the edge number is rent equaling no more than 40% of their total monthly income. I have seriously considered changing my number to rent totaling no more than one third, 33%, of their total monthly income. With 33%, a person can typically take a hit such as the loss of a job for a couple weeks from getting fired or being out sick, a car break down, or something else that sets them back. They at that level will be able to brush themselves off and get back on track on their own without assistance. It may take a little leniency on your part to give them time to catch up but they will be able to do it if they are actually trying.

A person isn’t truly comfortable unless their rent or mortgage payment equals or is less than 25% of their total monthly take home pay. Think about this for yourself as well. Add up your own total take home income and multiply it by .25. You will be very comfortable with your mortgage payment equalling no more than 25% of your total monthly take home pay.

When rent or the mortgage is less than 25%, it takes just one weekly check to cover the cost of shelter. It then will typically take one more check to cover all other expenses. You or your tenant will then have two checks a month that are able to go toward savings, vacations, going to the movies, eating out, etc. If a person can not pay their rent and they are in that 25% range, then they either lied to you about their income, or they are extremely irresponsible people that have some sort of drug, gambling or spending problem.

When determining what the total monthly take home pay is, you are looking at the “verifiable take home pay” not their total gross monthly income. You can include things like food stamps as that’s just like cash in the pocket. I would be very careful including income such as child support as that often ends up not lasting consistently over a long period of time.

The 3 formulas look like this on a person that has a total monthly take home pay of $1,900.

For 40% $1,900 X .40 = $760
For 33% $1,900 X .33 = $627
For 25% $1,900 X .25 = $475

The number at the end is the maximum amount of rent that they can afford for each of the formulas. You then determine if your rent is above or below the maximum affordable rent for them. If your rent is above what they can afford than send them away. If it is below than their financials check out and regarding that aspect they will be a good selection. As long as the rest of their background checks out fine.

Sunday, January 22, 2017

City Real Estate Taxation & Roanoke City GIS Functionality This Week At REI

0 comments
This week we have special guest speaker Susan Lower, Director of Real Estate Valuation for Roanoke City. Susan has been to our meeting as the speaker a couple times in the past and each time it has been fun. Susan really truly is a nice person and easy to talk to. I guess that’s a needed quality when you are the one who is in charge of determining the property values which directly relates to how much in taxes you are going to have to pay.

The city this year had a budget shortfall by 4 million dollars. They have rapidly grown in several of their departments and haven’t been able to keep up with it. As well as the last couple of pay raises they gave to every single city employee that cost millions.

The city is saying that the primary reason for the budget shortfall is due to a lack of sales tax. AKA business is hurting. Which leads to higher unemployment.

Now as we all know, the tax assessed values in most areas did not decrease in proportion of the loss we had after the bubble popped in 2008. And since then locally we have been skipping across the bottom. But it just so happens on the budget shortfall year…. from what I’m told….  this year, overall, the value of property went up. Susan I’m sure will have statistical information to verify this increase. It may have increased a very small amount. But it never was allowed to comparatively decrease after the housing crash so the city could continue to grow during times of economic despair for so many. 

Susan is also in charge the city GIS. She does an outstanding job with it. It’s far better than the surrounding areas however Roanoke County is quickly attempting to catch up. There have been some recent changes on the GIS which have some different functionality. Susan will also teach us how to get the most out of the city GIS, to do your research when looking for deals.

It’s going to be a fun meeting!

See you there...

Monday, January 9, 2017

This Week Open Forum And REI Rehab Opportunities and Brainstorming. 

2 comments
Hello Everyone,

This is the big week. This will be the week where we will have a moderated group forum that will consist of random topics. Due to the wide variety of topics, these are the types of meetings where most people will walk away with some great info. Landlording tips, buying, selling, rehabbing, wholesaling, negotiating, it’s all on the table for discussion.

We also plan to have a brainstorming session with the group regarding the REI rental rehab we are purchasing. Things we are juggling around are ways to get members trained in rehabbing to rental quality, how to on fixing their own units, what to do regarding paying members in our group that have particular skills to do one aspect or another. We will need a fair priced paid painter, carpenter, possibly a plumber, electrician, etc. We will also need someone to manage the project that should get paid to do so. As well as someone to be the property manager for all of the properties we buy in the end.

And we will need investors who want to cash out REI by giving REI of Virginia Inc a loan against the rehabbed and rented property with a first mortgage on it in your name to be a super safe investment. We will use that money to buy another and develop a portfolio that will continually have training opportunities, income opportunities for members and investment opportunities in the end. There will be no personal cosigner. The property will be your security. And the value of the property will be significantly more than what we borrow which will be no more than what we have in to it. We’re doing this by using tried and true methods that help eliminate risk. The same methods that we teach our membership.

If you are unable to attend the meeting but are interested in any of this than feel free to shoot me an email with your thoughts.

See those at the meeting that can attend! If you have questions about any aspect of investing, this meeting is the place to bring them.

Williamson Rd Area Business Association Pushes For A “Road Diet” Turning Williamson Into A 2 Lane Road & New Tax Potentially Coming For Landlords In That Area.

0 comments














The Road Diet: The WRABA has been working with the city on a plan to somehow miraculously help business by turning this busy road into a one lane road on each side. They are especially interested in the area between Orange and Angel Avenue.

They didn’t mention the Road Diet in their email blast but it’s known that those are their intentions. Back in 2015 the city had a meeting that used Williamson Rd as a project in a Road Diet including the development of strategies on how to defend the idea. See Below:

FHWA Home / Safety / Road Diets (Roadway Reconfiguration) / Road Diets Newsletter
On October 29, 2015, FHWA partnered with the Virginia Local Technical Assistance Program (VA LTAP) to provide a Road Diet Workshop in Roanoke, Virginia. Over 30 people, including engineers, planners, and transportation safety specialists from state and local agencies participated in the event. Topics of discussion ranged from Road Diet benefits to feasibility and evaluation.
The workshop included a field exercise where participants implemented a Road Diet on nearby Williamson Road. Mr. Mark Jamison, Manager of Transportation for the City of Roanoke, provided background and crash data for the location. Each group provided a reconfiguration of the roadway and were required to present and defend their plan. Overall, the workshop was a great success with many positive responses.

WRABA says it is important to hear from you and have offered this contact info for your correspondence. wraba@wraba.org or via US Postal Service at WRABA, Williamson Rd Improvement Committee, P.O. Box 7082, Roanoke, VA 24019.

It is important that people attend their meeting for support or opposition or they will proceed with their plan. Their meeting is January 17, 2017 at 1:30pm at the Holiday Inn off Hershberger Rd.

New Taxes For Landlords In The WRABA Area: The Williamson Rd area has special zoning that they set up that includes several entire neighborhoods down Williamson Rd. This area is huge and is from Williamson Rd over to Plantation and down to Hollins. They have been allowed to charge a special tax to businesses in this zone.

But WRABA decided to not stop there…. We have information that they now are waiving their finger in the air trying to find all landlords to include in this tax so they have more money for their business. You are a landlord therefore you are running a business and will be held liable for this tax by WRABA. Pure unadulterated greed!

Monday, January 2, 2017

Group Forum / Possible Hard - Private Money Conversation - This Week At Real Estate Investors of Virginia

1 comments
Hello Everyone,

This week, if not as planned, we will have a moderated group forum that will consist of random topics. Due to the wide variety of topics, these are the types of meetings where most people will walk away with some great info. Landlording tips, buying, selling, rehabbing, wholesaling, negotiating, it’s all on the table for discussion.

There is a strong possibility that we will have lender Jim Sexton at our meeting this Tuesday to talk about expanding your investments to warp speed using hard / private money. If not this week it will be very soon. I don’t have confirmation just yet as I wasn’t in on all of the emails regarding this.

It’s been super high stress for the past few days for me so I’m not totally in the loop of what's happening.

I’m getting ready to need to start doing some deep breathing or some other stress relieving tactic because a person can only take so much before it drives them crazy. When it rains it pours. It’s pouring right now for me and I’m not seeing the light on the other side yet.

This past Friday my sister in law turned up dead. There is an investigation going on as there is a high likelihood that it was a murder. I sent a message through the bad guys friends that he better not see me out at the bar or anywhere as I will go after him. I was told he has had a lot of death threats since she died.

This guy was known to mercilessly beat her. A few months ago he beat her so bad he closed up her eye and she had to stitch her own face so he didn’t get in trouble. I don’t know why some of these women will get with a loser and stay with them after something like that. I was taught only a sissy will lay a hand on a woman.

So all day I watched my poor little 2yr old nephew and 5yr old niece after mommy died so my brother could take care of some things and put a GoFundMe up to get money together to cremate her and have a service. Him and her family don’t have much and it’s already stressful enough to have to deal with her death as well as having to try to figure out how they will financially give her a proper goodbye.

Those poor kids have to grow up without a Mom. I can’t even imagine that considering I’m a mommas boy. My brother is pretty torn up as well. I caught him several times trying to hold back tears because he didn’t want to cry in front of me.

Then today for the icing on the cake, I took my girlfriend to the hospital again. As you may recall, she had a double mastectomy from an extremely rapidly spreading type of breast cancer. She’s been battling cancer for several months now. Taking trip after trip to MD Anderson in Houston Texas. That is statistically the best cancer hospital in the United States and when you have something life threatening, it’s not the time to be cheap. You just do what you’ve got to do and deal with the financial circumstances later.

We were in the emergency room last week from an infection she got. It’s very serious as it’s in her chest wall right next to her heart. She was put on an IV antibiotic last week rather than the 3 super powerful pill form antibiotics that she was taking to try to knock it out. It had seemed to work but all of a sudden she started going downhill again. They now are going to keep her in the hospital for 3 to 4 days on an IV antibiotic while they will likely try to do some other things like opening her back up and cleaning her chest out, reinserting some drainage tubes that fill up with this bloody fluid several times a day, etc. If that is unsuccessful the surgeon in Houston said she needs to get an emergency flight back to her so she can do surgery again.

What a nightmare for her to have to go through. She was crying all day today. I think she’s worn out from all of this fighting. She’s a tough girl though and will pull through.

I look at all of these things that happen to people…  and wonder why it always happens to the best people... The ones with the heart of gold. The nasty mean people like me will live forever! It doesn’t matter what I do or how bad I abuse my body. I’m immortal...
 

Real Estate Investors of Virginia. Copyright 2009 All Rights Reserved