Advanced Real Estate - Low Income
Advanced Real Estate - Low Income
Warning: Not for the faint of heart!
So like that, my name is Issy Alon, active in the group mainly in the comments…
I have been investing in income-producing real estate since 2006 in Israel and about three years ago I started my journey in real estate in the USA in Philadelphia…
Most of my activity is in Kenya for rent, but I work in a field that is not simply what is called low income
The houses are relatively old and cheap and the population is very weak, most investors prefer to stay away from such properties and I can understand them…
Anyone who needs a smooth and difficult ride with the potholes of the road is really better off moving away from such an investment.
When buying old houses of course there is the need for active maintenance, so these expenses should be taken into account in advance before buying, since the old house and the old systems will be calls for repairs and cash flow, it is on the side of the building…
I have already read warnings from properties of this type that if you buy a house for $ 25,000 and there is suddenly a repair of $ 2000 then it is actually a high percentage of the value of the house, I just look at the fact that the house cost $ 27,000 and not $ 25,000 .. but it's just me (still Kurdish? ) But I would rather buy a house for $ 23,000 with a tenant who pays $ 675 a month than buy a more expensive house with a lower yield…
On the tenants' side then my population type will not always prefer to pay the rent, if there will be holidays on the way and some money left in hand I am not their first priority to pay, they will probably find what to buy with that money and not "spend" on rent…
I have already had quite a few tenant evictions in the last two years, I always look for where I was wrong in the process and draw the conclusions whether in more comprehensive tests or deposit or anything else, but in the end it should be understood that this population has its own mentality and payment ethics… and I do not Say it contemptuously God forbid these out of understanding the people I deal with.
And of course we have the equally important side that it is the management company… she does not lick honey, she stands in front of the tenants, she has to deal with defects and malfunctions of the properties, it is her job, just do not forget that she earns very little on this headache .. just to explain The ear, I pay them 7% of the rent which is relatively small but the rent is also low .. So when you take 7% from $ 650 or $ 750 does not leave them much money… Luckily they manage some of my properties so I still have a bargaining position in front of them… The management company needs to know but work and only deal, the management company will never lose will always find a way to supplement their salary if in the form of commissions on various actions and there are management companies that will find the way dishonestly like inventing repairs that were not and were not created .. (I also came across plunder)…
Well, I'm not used to writing so much… ???, this is not a post of complaints and fumes but at the tip of the fork on a very challenging and rewarding niche called low income where you can make amazing returns but not for the faint of heart…
Issy Cannon!
https://www.facebook.com/1448866197/posts/10214311469647818/
Hi Issy - As an investor in Cleveland I will give you a tip: go up to your management company if it is good at a 10 percent management fee. Do not forget that these are the most important people in this investment chain in the end, and your attitude towards them will also determine if they went out in the snow to exchange some livelihood in the middle of the storm for some Negro who barely paid if at all rent… Talk to them, and form a relationship of conversations and understandings - it will work For your benefit, and of course - do not skimp on the commission. Even so, working on assets of this kind is not really worthwhile.
I want to expand on the subject as the owner of real estate offices and a management company in Philadelphia for many years, I know all the players in the city, there are good ones and there are less good ones and I believe this is the case in every city.
Regarding Philadelphia, these days the city is going through a lot of changes in strong laws in favor of the tenant, therefore a landlord who does not maintain a house properly will find himself in very difficult situations in front of the courts.
On the other hand, there are companies that specialize in cheap products and they are willing to take on the headaches because they maintain quantities and not necessarily quality. In this situation, you need to check carefully who are the persons operating, unfortunately, many buyers turn to me with tears in their eyes about a wrong investment and the loss of all their investment. Please be careful and check carefully where you enter. There are cases where the house is in good condition and the tenants have a low income and there are at least ten possibilities where they get the money for rent they pay and the landlord enjoys a good income
Hey Issy, good for daring, I'm your anti-thesis as he describes and that's fine (expensive and stable assets). It's all about blacksmithing in Long Run. Good luck and success later on
Hi Issi Alon
I'm interested in hearing a few things
1. What percentage of payment per year when you deal with such tenants
2. How do you refer tenants? Or other ways? and how much does it cost?
3. How much time does a tenant stay until he reaches the evacuation?
4. How much deposit do you take which means what is the cover for you? The Englishman? Two months rent?
5. Do not you sometimes get a year of repairs at home, management, taxes and insurance more than renting?