RentalStarter - A Midwest Real Estate Investment Company

[Branny]

Two MASSIVE deals.

Both by the same landlord that self-managed 100+ rentals, he wants to liquidate some properties.

#1 - 4br/2ba unit duplex. $1200/mo with one tenant under sec8. Both are doing their own work on their units as the units are quite underpriced. $39,900 purchase price (36.1% Simple ROI)

#2 - 3br/1ba unit duplex. $1000/mo with both being long term tenants. Decent shape overall, not as good as an area as #1. $39,900 purchase price (30% Simple ROI).

[1714775704]

1714775704

[1714775704]

1714775704

[1714775704]

1714775704

[floatyfish]

Two MASSIVE deals.

Both by the same landlord that self-managed 100+ rentals, he wants to liquidate some properties.

#1 - 4br/2ba unit duplex. $1200/mo with one tenant under sec8. Both are doing their own work on their units as the units are quite underpriced. $39,900 purchase price (36.1% Simple ROI)

#2 - 3br/1ba unit duplex. $1000/mo with both being long term tenants. Decent shape overall, not as good as an area as #1. $39,900 purchase price (30% Simple ROI).

This is awesome, when can they be bought?

[VJain]

Great update via email and the posting above. Glad to see things are doing well!

[Branny]

Two MASSIVE deals.

Both by the same landlord that self-managed 100+ rentals, he wants to liquidate some properties.

#1 - 4br/2ba unit duplex. $1200/mo with one tenant under sec8. Both are doing their own work on their units as the units are quite underpriced. $39,900 purchase price (36.1% Simple ROI)

#2 - 3br/1ba unit duplex. $1000/mo with both being long term tenants. Decent shape overall, not as good as an area as #1. $39,900 purchase price (30% Simple ROI).

This is awesome, when can they be bought?

As long as the condition isn't terrible (And I personally know the agent who has them listed, and he knows his stuff. He has told me they are in average shape). We could make an offer on Friday after looking at them.

[Branny]

Great update via email and the posting above. Glad to see things are doing well!

There's been a small modification to the rent roll for the potential duplex purchase. The agent had the wrong information on the rent roll and the income is now $1200 instead of $1300 (The rent was $50 less on one unit, and there's a $50/mo fee for water on the other unit).

[tempestb]

Branny,

  I'm curious, how is your ability to manage all these properties?  It appears you're one dude right now.  As this outfit grows, you will need to bring on more people.  Employees can suck a lot of cash out of a business.  At what point do you see yourself adding employees.  For instance, how many properties do you reach before this becomes a situation where you need help, and what do you think the loss would be.  Like, if you had 25 properties and had to bring someone on for $40,000 a year (Health Insurance, Unemployment Insurance, Social Security, blah blah blah) figuring some properties require investment to modernize and keep-up, and some are in transition.  Have you factored that kind of cost into your future growth analysis?  I'm just curious how you plan to grow as an operation. 

[Branny]

Branny,

  I'm curious, how is your ability to manage all these properties?  It appears you're one dude right now.  As this outfit grows, you will need to bring on more people.  Employees can suck a lot of cash out of a business.  At what point do you see yourself adding employees.  For instance, how many properties do you reach before this becomes a situation where you need help, and what do you think the loss would be.  Like, if you had 25 properties and had to bring someone on for $40,000 a year (Health Insurance, Unemployment Insurance, Social Security, blah blah blah) figuring some properties require investment to modernize and keep-up, and some are in transition.  Have you factored that kind of cost into your future growth analysis?  I'm just curious how you plan to grow as an operation.  

We already have  2 people working for us now, I don't see an issue adding more since the way we pay is all success-driven. I don't like the idea of hourly/salary employees. The pay that they receive sharing minor management burdens is paid for by new tenants.

[lemfuture]

Branny,

  I'm curious, how is your ability to manage all these properties?  It appears you're one dude right now.  As this outfit grows, you will need to bring on more people.  Employees can suck a lot of cash out of a business.  At what point do you see yourself adding employees.  For instance, how many properties do you reach before this becomes a situation where you need help, and what do you think the loss would be.  Like, if you had 25 properties and had to bring someone on for $40,000 a year (Health Insurance, Unemployment Insurance, Social Security, blah blah blah) figuring some properties require investment to modernize and keep-up, and some are in transition.  Have you factored that kind of cost into your future growth analysis?  I'm just curious how you plan to grow as an operation. 

We already have  2 people working for us now, I don't see an issue adding more since the way we pay is all success-driven. I don't like the idea of hourly/salary employees.

if its not hourly, how do you pay em

[Branny]

Branny,

  I'm curious, how is your ability to manage all these properties?  It appears you're one dude right now.  As this outfit grows, you will need to bring on more people.  Employees can suck a lot of cash out of a business.  At what point do you see yourself adding employees.  For instance, how many properties do you reach before this becomes a situation where you need help, and what do you think the loss would be.  Like, if you had 25 properties and had to bring someone on for $40,000 a year (Health Insurance, Unemployment Insurance, Social Security, blah blah blah) figuring some properties require investment to modernize and keep-up, and some are in transition.  Have you factored that kind of cost into your future growth analysis?  I'm just curious how you plan to grow as an operation.  

We already have  2 people working for us now, I don't see an issue adding more since the way we pay is all success-driven. I don't like the idea of hourly/salary employees.

if its not hourly, how do you pay em

I always pay on a mix of performance and cost-per-action.

It takes about 5-6 hours to rent out a house (Ads, showing it, signing contracts and the like). I charge all potential renters a $40 application fee. We might get 1,2,3 applications for one property. That puts up to $120 in the hands of a person to get it rented out. If they end up only spending 30m to rent it out (Like the case was with W Mill), they end up making $80 a hour for their time. Once you explain to someone how it works, it doesn't take alot of convincing to join on.

Everything we do, I try to look at the best ways to scale (You'd be surprised how much can be offloaded to software). Because it's easy to handle 5, 10, 20 rentals. It's impossible to handle 500 or 1000 without a team. The plan here has always been to make it scale the best.

Alot of the marketing/work is done through our website. Contracts, videos, very clear information about each property. It solves alot of problems of people showing up and wasting contractor time or my own time. I'm already taking photos of each property for investors, it's trivial to upload it onto the website.

[tempestb]

At some point though you grow to where people are calling you right?  Who manages repairs when the toilet overflows or a door falls off?  Someone calls and you have to dispatch a service to repair this stuff don't you?  Or is every property you rent out just a situation where you do nothing and the owner has to deal with all their own repairs.  (I can't see how that would work really, but what do I know?)  I mean at ten properties it's not a big deal.  At 500 properties your phone is going to ring all day and night. 

[Branny]

At some point though you grow to where people are calling you right?  Who manages repairs when the toilet overflows or a door falls off?  Someone calls and you have to dispatch a service to repair this stuff don't you?  Or is every property you rent out just a situation where you do nothing and the owner has to deal with all their own repairs.  (I can't see how that would work really, but what do I know?)  I mean at ten properties it's not a big deal.  At 500 properties your phone is going to ring all day and night. 

We have 2 guys that do repairs, each property escrows $75/mo to pay the workers. The workers are paid on a per-repair basis, when we go in and rehab a property we fix everything that needs fixed, so for the most part it will take 2-3 years before anything sizable breaks.

Through property #5 we're setting back a total of about $450 per month in repair escrows.

[Branny]

We will be submitting an offer for a second duplex in Chillicothe today. Looks good as far as things are concerned - $1300/mo in income off a $39,900 property. In a sketchy neighborhood but the area is on the upswing which is where we want to be .

Mulberry was delayed due to the bank either dragging their feet or being otherwise slow.

[lemfuture]

coolio. would be nice to see some pics 

[Branny]

coolio. would be nice to see some pics 

I've got some exterior photos on my cellphone that are sync'ing with my dropbox account very slowly. I'll update this post with photos when they're done.

4br/2ba per side, almost 3,200sf.

[Branny]

Sellers accepted the contract on Scioto at $39.9k with us getting around $1200-$1500 back at closing due to deposits & rent credits.

[Branny]

Closed on Mulberry , bank is supposed to let us close on Mill today but i haven't got a HUD yet from them. They're making me very mad.

Scioto is under contract and I've got a distressed seller who owns a duplex literally right next to it, they want $27k without me even talking them down yet. If we can get it for say $35k or less repaired I'll go with it.

[Branny]

Closed on Mulberry , bank is supposed to let us close on Mill today but i haven't got a HUD yet from them. They're making me very mad.

Scioto is under contract and I've got a distressed seller who owns a duplex literally right next to it, they want $27k without me even talking them down yet. If we can get it for say $35k or less repaired I'll go with it.

Sounds like you've got some great deals going on over there Branny!
Would you mind putting all the info in a spreadsheet-like overview like on page 11 of the public release?
I'd love to see how the current progress is matching up to the projections you posted earlier, and how the additional investments are shaping up!

Impressed by your work so far!

There should be a link in the business plan to the spreadsheet I've already set up with properties & figures. Additionally on the past newsletters I've sent out, I have included the link again. If you can't find it just message me on here and I'll send you a link to the spreadsheet.

[Branny]

Oddly enough the bank emailed me all the closing docs on E Mill today and I ran down to the bank to wire them the funds, So, E mill is now ours.

Rehab I think will begin tomorrow. Will get some video set up of the property. East Mill, like Mulberry and the cottage on Union all have interior video so I can put together before/after videos of the process.

[Chris_Sabian]

Oddly enough the bank emailed me all the closing docs on E Mill today and I ran down to the bank to wire them the funds, So, E mill is now ours.

Rehab I think will begin tomorrow. Will get some video set up of the property. East Mill, like Mulberry and the cottage on Union all have interior video so I can put together before/after videos of the process.

Excellent! Good to hear.

Any timeframe for the next round of funding via Havelock?

[memvola]

I am more interested in the contract clause rather than its planned effect though.

<snip>

I'll try and get some exact verbiage done and get it added to the contract/plan by the end of the week.

Hi Branny, any updates on this?