Writing off one bedrooms

When many investors are looking for their next rental property they have a tendency to ignore a vast majority of the current inventory on the market. The trait that these properties share in common is that they are single bedroom units. Landlords tend to shy away from them for fear that they won’t be able to pull in the rents they desire. If you can relate to this standpoint, just as with avoiding duplexes, you could really be missing out on some great buys. Read more

Tuckpointing old brick

The tuckpointing in your brick building is starting to decay. Cracks are forming and small chunks of mortar are beginning to fall out. Sounds like you’re due to take on the “not too difficult” but time consuming task of tuckpointing. Time to head on down to the nearest Home Depot or Lowes at stock up on tuckpointing supplies and ready mix mortar. Right? If you are tuckpointng an older building like those found through most of St. Louis City and much of St. Louis County, you just made a mistake. Read more

Keeping good financial records

I’m always astounded at how many investors don’t keep detailed records on their properties. Especially since most of this data is submitted to the IRS at tax time. For some reason or another, after the data has served it’s initial us, the information often gets tossed aside. If your records look like this picture or if they end up in the trash can, I encourage you to think twice about what you do. You are losing out on valuable information, which is crucial to any landlord’s business. Read more

Rents on the rise

Despite the gloom and doom touted by the media, right now is a great time to be a landlord or real estate investor. You’re going to have a tough time if you’re trying to sell, but the current buyers market is opening up some real deals. But this fact is by no means a secret. What seems to be less recognized is how much our local rental market is improving in response to these current market changes. Read more

Home improvement fraud

Don’t let this man’s phony smile fool you. He could be a thief. If someone comes knocking at your door, claiming to be a contractor, be careful of what you do. I just received this forward from a Circuit Attorney in the City of St. Louis. If you live or own any properties in the City you should really take this one to heart. Read more

Beware of MOLD! It’s bad

The “big three” health hazards of the rehab and rental world are lead paint, asbestos and mold. Of the three, mold seems to get the least amount of attention. But the thing about lead paint and asbestos is you either have these problems in your building or you don’t. There is no need to protect yourself against them if you they aren’t on the premises at the time of purchase. Read more

Securing AC condensers

Nothing hurts a landlord’s pocketbook or pride like being the victim of theft or vandalism. The main security issue facing landlords in St. Louis and around the country is copper theft, but there are many other temping targets at any property. One particularly expensive and “easy to steal” component are AC condensers. Read more

Raising rents doesn’t make you a jerk

According to forecasts.org, as of today, the rate of inflation in the United States is 4.12%. That’s really high! Whether you live in St. Louis, the East Coast or Juneau Alaska this affects everything from the cost of a gallon of gas to your taxes. Money is worth less so it takes more of it to buy any product. Read more

Don’t forget the 2-families

In the hot real estate market of the early to mid 2000’s, duplexes were virtually ignored by investors looking for rental properties. And with good reason. Why would anyone buy a property if they couldn’t make it cash flow. With the upward spiral prices took in that market, 2-families were generally abandoned by rental investors and embraced only by owner-occupants.

Flash forward to 2008 and you have a much different situation. As foreclosures continue to pile onto the market and values continue to fall, these long unnoticed investment opportunities are beginning to look a little more appealing. Duplexes located in all areas and in all conditions are beginning to pop onto the market at an rapid rate. The prices have gotten so reasonable that cash flowing these buildings has become the rule rather than the exception.

I’ve been surprised at the number of duplexes I have been finding in the St. Louis market that already have a ton of work done to them, yet are for sale at a very reasonable price. Central heating and cooling, new stacks, updated kitchens and bathrooms, clean drywall finishes: these are common finds among the foreclosures flooding the market.

One of my clients closed on a 2-family in the Shaw Neighborhood last week that is a prime example of the great buys that are out there. This duplex has central HVAC, a newer stack, circuit breakers, intact copper, spacious two and three bedroom units and is really in great shape. He’s going to have to put some work into it, but it won’t exceed $15,000. Once he’s done he’ll be able to rent each unit for about $750 for a gross income of $1500 a month. The real kicker is that we negotiated the purchase price down to only $79,000. That’s only a $94,000 total investment after repairs. Not a bad cash flow. Especially for Shaw.

Another point to consider when looking a 2-families is that in the existing financing market of 20% down deals, finding 20% of $79,000 for one of these duplexes is a lot easier than finding money for a down payment on a high dollar 4-family. These deals are often more affordable and quicker to get turned around.

Of course, I am not saying that all duplexes are good deals or that you aren’t better off investing in some other style of multi-family. The real point I am trying to drive home is that you should pay these opportunities some attention. Keep you options open and you just might find one of these “diamonds in the rough.”

Security lighting

Keeping your tenants and properties secure is an important part of running a successful investment. If your tenants feel unsafe, they will be less likely to remain at the property after their initial lease. If your property isn’t secured, you just might find your copper plumbing or AC condenser miss one day. Its a major concern.

Security systems are often used as a method to address this problem, but there is a more affordable, and in some ways more affective method: motion-sensor security lights. With a few strategically placed lights, you can really improve the security of your properties.

Your tenants will be happy because the building will be well lit when they enter and exit their unit. The property, as well as the tenants will be more secure because the motion sensors will activate when somebody enters the premises. A potnential burglar or robber is going to think twice before camping out behind a property that is well lit.

The next time you have a warm weekend free and are looking for something to do, head down to your local hardware store and pick a few of these up. They are well worth the investment.

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