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This week’s question is, “How do you know if Management Company’s any good?

Well, the answer to that question can be very long. There is series of questions that you wanna be asking them but what you wanna do is you wanna try to x-ray them because everybody is gonna have a hail over the head when you asking them questions everybody’s gonna tell you that they are the best but you wanna ask questions that have double meanings. For instance I always ask,”hey! How many properties do you own that are like mine in my area and the area that you’re gonna be manager?” and the management company thinks that you are asking that question because you wanna know if they are experienced managing those types of properties and they’ll tell you how many they own. That’s not why you’re asking that question. You’re asking that question because you wanna know if they own properties like yours in that area and you both need tenants and they screen the tenants Who do you think gets the good tenants and who do you think get the bad ones? Coz I gotta get the good ones. So we never hire management companies that own properties in our area, only management companies that manage properties in our area. Hey you got a question? Put it down on the blog section below. I might just answer it next week

Hey welcome to another edition of 60 seconds insights. Now today’s question comes from Jonathan.

Jonathan asks, are hard money lenders used for single-family properties or multi-family properties?

The answer to that question is to use them for both. The trick to using them is, because most people start with hard money lenders, the fact that you want to find the lenders that will loan you at 65 cents on a dollar with no money down. Typically they will all loan you at 65 cents a dollar but you want to get a lender who will loan you with no money down.

So the trick is to buy deals at $0.60 on the dollar, subtract the rehab costs, negotiate down from there and you can get in and rehab with none of your own money out of your pocket. That’s how I got started with multi-family properties, first I started with credit cards then I went with hard money lenders, then if the interest rates are between 18 to 22% they charge you 3 or 4 points. But the beauty is, the income from those properties will allow you to qualify for a bank loan later on. Then what you can do is re-finance, get the rates lower down to whatever market rate is at that time. Usually way below 8, 9 or 10% and your cash will skyrocket.

Now this week’s question is, “Dave, Should I take pets?”
When I first started investing I didn’t take pets because I didn’t want pets to destroy my units, I didn’t want to have the extra costs when a pet left the property you know the cat stink, the dog you know scratching all over the place and then I realized that 25% of all tenants have pets and I was excluding them from you know my renting share when I was looking out in gaining more rental for my properties. So when I started with the pet policy and you wanna have a pet policy that allows pets to come in you can charge extra for them 25-30$ you get a pet security deposit which is a 150-200$ and what you have done by doing it will only allow one cat and/or one dog that dog can be more than 20 pounds. You do that and you’ve just increased your market share every time you look in for a new tenant into your property. That’s what we do with pets. Hey you got a question? Put it on the blog section below. I might just answer that next week.

This week’s question comes from George and George asks, ”Dave, how do I verify the income of the property especially when I don’t trust the seller?”

Well, the first thing you do when you’re verifying the income is you match the rent roll with the actual leases and when you see they match up together then your rent roll should match what it says from the lease from money coming in and then you take a look at the income report. OK and see if the income report is matching the rent roll OK that matches the leases. And then you know here’s the thing owners can fudge that and they do it often, the dishonest ones. So what you should do is take the next step and get the bank statements so ok you give me the profit&loss statements, you give me the rent rolls and now give me the bank statements and backup the fact that this money’s actually come in and if you do that you will know that the income is actually the income.

You got a question? Put in the blog below. I might just answer next week.