New in the rental game

These are some great things to know before you get involved in rentals. You really want to know what rentals are going for in the area and you always want to be in the middle of the average rentals. You will always want to have at least a $300 cash flow or more after all expenses are paid.
A great resource to know if your rents are high or low is the rentometer.com. This has been a good reliable resource.
Happy Land lording,

Check out the link below. It should be able to help you out alot.

Offer Formula
http://www.deangraziosi.com/node/3975

Buy low enough that you can have a cashflow cushion against the market going down,BUT at the same time, buy in areas that are trending up(big industry moving in, huge new shopping mall being built close by, city declares area economic revitalization zone, etc...) or trending stable with the expectation of going up in the future.
question two: Yes, if something is causing the area to degrade, like maybe too old and isn't the hip place to live anymore, a lot of crime is starting to happen in the area, area becomes polluted, overbuilding happens in the city(too many apartments, not enough renters). If you are talking about general property prices(not rental prices) going down in the area? I am not sure about that, someone more experienced would have to answer that question.

I can get you some info for question one Monday

Hope this helps

RENinja

1. Utilities
2. All service contracts(includes maintenance, cable supplier, etc..)
3. Taxes
4. Employees' salary history
5. Liens or encumbrances

Hope this helps.

RENinja

Hi positive cash flow should be the target you are looking for unless you can turn the property around an make it so, but postive cash flow is very important like any good budget, who wants to loose only fools, an thats not good management an if you need to get a loan who would be willing to lend you money with a negitive cash flow? Know your market an what rents are in your area of interest an do your due diligents an make sure of every thing.You have wonderful advice here from others talk it to heart an use it, Jim

Alright I'll keep those stuff in mind

Your rents rates will increase- your rates are locked by the lease with your tenant
Vacancy rate is one thing you're overlooking- usually 5%

Management fee if any

maintenance-grass, snow, repairs, etc.

I included a tenant move-in / move-out form for you - I also suggest taking picture/video of before and after for proof in case of damages

http://www.deangraziosi.com/real-estate-forums/rental-and-cashflow-prope...

Whats a vacancy rate?

its the amount of time unit is empty-NOT collecting rent, time between tenants or painting etc

If you're lucky, you can keep the same tenant for years and years.....

I am trying to get into rental properties as well, but I don't want to be a landlord. Someone put me on to https://fcg.infusionsoft.com/go/AFP1/rurei/. Rents, vacancy rates, cap rates? I was getting confused.

I guess what I'm trying to say is what would be easier to start single family homes or multi-fam units?

For each rental property you own you should have a least 6 months cash reserves in the bank. This is money to pay all the bills if you have no money coming in for 6 months. To be a successful landlord you must plan for the worst and hope for the best.

Better to stick to wholesaling the deals to your landlord buyers or do "subject to" and sandwich L/O if you have no money. Even then you should have several months mortgage payments in the bank in reserve.

Michael Mangham
MD Home Acquisitions LLC

Something that would fall under "maintenance" would be lawn care and snow removal if those apply in your area. I've gotten a couple of "reminders" from the city about high grass. If the tenant doesn't mow it, and I don't get that notice, the city will send someone to mow the grass for $75 per hour plus court fees.

Evictions for me cost about $800.

As Michael has said, keep some reserves. The bank I'm using has a minimum balance required otherwise there's a $10 per month fee if I go below that.

If you need to replace appliances, those can get expensive in a hurry.

As others have taught me, it's a good idea to standardize your maintenance items. If you have rentals that are in the same price range, for example, they have recommended that you use the same color paint, carpet, etc. throughout your rentals. In the case of paint, how many paint cans do you want to store, keep track of which color goes in which apartment. It removes a lot of the guesswork and time spent picking out new stuff.

I was just talking to a commercial buyer around my way and he says hes looking to own more commercial buildings. I asked him whats his criteria and he said he dont have one, just as long its a deal.He didnt give me anything good to start with, but Im going to see if I could find an apartment building that's sort of similar to what he brought. My next move is to find a seller now. I have several questions though:

1) This maybe a stupid question but should I collect the statement of income and expenses before or after I have the property under contract?
2) Who's the best person to go to, to find market cap rates?

Random question.

If I was to go into office buildings how do I know if a office buildings are hot in my area?

I haven't done commercial office yet but I would get all the numbers for determining commercial deals before making your offer. You need something to base your offer on, commercial is all about income. Are you talking about getting into apartment buildings or office buildings? I can help out a little with apartments but not so much in office/retail buildings.

There was a great thread on here a month or so about determining office/retail building values. See if you can track it down with a search first. It may be very useful to you. Commercial residential is a different beast.

I know im doing all the homework as I could. So far I have a good solid base. Im going to start networking with some of the other commercial investors. Im looking to wholesale apartment buildings. Do you own a commercial building?

Whats the best places to go to find property managers?

We have a commercial residential building (or 2). Word of mouth is the best way to find a property manangement company. We hired a guy without vetting him first... MISTAKE! Call realtors, title companies, and other apartment complexes regarding property managers. See who they recommend and then call the property management companies and grill them with the questions found on this site.

Unfortunatly, we live in a town just small enough not to have a property management company. We may partner up with another investor/realtor and start one though.