She called me on Monday and we discussed her renting her large home in a desirable area * 4BR, basement, 2-Car Garage in area with loads of UVa Med School instructors and doctors. The area has tennis and pool and loads of activities for children.
She indicated she had lived in the home while remodeling another home and she decided to move into the newly remodeled but smaller home.
We schedule to meet on Wed and then the SNOW HAPPENED so we scheduled to get together yesterday. I got there early and drove the neighborhood looking for FOR SALE signs * not too many which is good * and the home is near the pool and tennis facilities * another good feature.
I drive in to the driveway which is cleared and she opens the garage door and we introduce ourselves. As I go into the property I realize she is living there in a "camp-out" mode * meaning not really living in the home which is beautiful and will need very little except the removal of her furniture and belongings to stage it for rental photos.
I leave my marketing proposal and management agreement and SASE on the kitchen table and suggest she look it over at her leisure and we proceed to walk through the home and discuss the timing of the availability, potential rental prospects and also what she needs to do including calling 1-800-got-junk to discard items that won't fit in her smaller house. I make her aware that she can take these expenses from her taxes as they are necessary to get the home ready as a rental she appears excited.
She then asks me if I do a lease only and I responded no and the reason why is that the cost would be prohibitive for my rental marketing efforts. I then asked her about her long-term plans for the property and she says she is renting because her brother, in real estate in another area of the state, is renting homes he normally flips * the light went on and the bells went off....she fixed the smaller home hoping to FLIP IT and has TOO MUCH money in it so NOW she wants to rent the LARGER, NICER home for more $$$$ and she will down-size and live in the smaller UNflip home.
She has my rental property management and marketing material * she has my "take" on the current area rental market * she has my management agreement. I suspect she won't use my services; however, I have already sent her a hand written thank you note indicating I'll be happy to work with her and if I do hear from her, I will know that I may have converted her from the disastrous path her brother set out for her.
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
Central Virginia
LandlordWhisperer
View our available Charlottesville, Albemarle and Lake Monticello rental homes online with photos and floor plans
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Thanks for sharing your story. Good warning for others that are considering this business. Investors need to carefully control rehab costs. Have a great weekend.
Thanks Roy * she tried to do what her brother was doing in an ENTIRELY different market; however, the good news is that the rental market in OUR area is much better than where he is attempting to rent his UNflipped homes.
Wallace,
Yes, we definitely do see FRBO's here in Atlanta, too. I am OK with just leasing their properties. On more occasions, they end up asking to property manage it. Also, I get to help them sell it too in the future. So, I am OK with that logic.
Many folks just don't know or enjoy the process of getting tenants.
All the best, Michelle
Wallace It is amazing how many foolishly believed "flip" in real estate is as simple as FLIP in cameras and are now floundering
Michelle * My photo/floor marketing costs make lease-onlys cost prohibitive and I want the continuity on my website.
Karen * It worked for her brother because he has a wife with a real job and he does the flip-work himself. I suspect she is living on divorce settlement and had to hire work done....not the same
Making money in real estate is not as easy as they would like to tell you on TV. There is a lot to know and many that would prefer not to share what they do know. Any many that would claim they have all of the secrets, but in fact may not and will likely want to charge a fortunate to give them to you.
Those that choose to make money in real estate using a short term strategy really need to know what they are doing. Or they will most likely loose plenty of money.
Right now long term strategies are probably better but it does require doing all of your homework. Will the property cash flow, what is the rental market like in the area, how long do you plan on keeping the property, what is the condition of the home, type and availability of financing, neighborhood, and other factors. It is a good idea to find professionals that know the area and can provide the necessary details to make a wise purchaseand can help with managing the property.
Charles * this owner I made thepresentation to is an accidental landlord because her PLAN of a fix and flip did not work. Unfortunately, she is taking her cues from her brother who is in a different market and is keeping costs down by doing work himself.