3 Things That Will Kill Your Rental Property Cash Flow (Rookie Reply)

Real Estate Rookie

BiggerPockets

How To, Education, Business, Investing, Entrepreneurship

4.8 • 1.7K Ratings

🗓️ 4 October 2024

⏱️ 37 minutes

🔗️ Recording | iTunes | RSS

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Summary

Floods, evictions, and bad property managers on ONE rental property?! These are the kinds of things that spook rookies out of real estate investing altogether. Fortunately, many of these issues are avoidable, and today, we’ll equip you with some property-saving advice that could help you prevent a major blunder! Welcome back to another Rookie Reply! While scouring the BiggerPockets Forums this week, we stumbled on a full-blown horror story that involves several problems with the same property. Tony and guest co-host Noah Bacon have encountered similar issues throughout their investing journeys, and in this episode, they’re going to break them down and show you how to handle them. You’ll learn why you should think twice before passing up on a sewer scope, how to adjust your tenant screening process and avoid evictions, and how to effectively manage your property managers! Looking to invest? Need answers? Ask your question on the BiggerPockets Forums! In This Episode We Cover: Why home inspection packages aren’t just another sales scam to ignore Why doing your due diligence upfront could stop you from buying a “problem” property How to save thousands in eviction costs with a “cash for keys” offer Why you need to create strict tenant screening requirements (and stick to them!) The number one attribute to look for in a property management company How much money a new investor should be keeping in reserves And So Much More! Links from the Show Ashley's BiggerPockets Profile Tony's BiggerPokckets Profile Join BiggerPockets for FREE Real Estate Rookie Facebook Group Get Free Property Management Software for Landlords with Hemlane Buy “The Book on Managing Rental Properties” Property Manager Finder See Tony and Noah at BPCON2024 in Cancun! Skipping That Home Inspection? These Horror Stories Will Make You Think Again Connect with Noah (00:00) Intro (01:00) $30K Sewage Repairs! (07:34) HUGE Eviction Costs (20:14) Property Management Woes (27:53) Advice for New Investors (30:53) Post Your Question! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-466 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	All right, guys, let's get your questions answered.
0:02.0	Welcome to the Real Estate Ricky Podcast, where every week, three times a week,
0:05.6	we bring you the inspiration, motivation, and storage you need to hear
0:08.8	to kick start your investing journey.
0:10.2	Now, today's Ricky reply is going to be just a little bit different for a few reasons.
0:14.4	Instead of answering your questions, we're actually going to be featuring one forum user, so the bigger pockets forum
0:20.3	we're going to take one story, a bit of a horror story, and use it as a jumping off point about what to do and what to like out for, so you never end up in that person's shoes.
0:28.4	Now, the second reason today is that Ashley, my co-host is actually traveling, so I'll be joined by Noah Bacon and you might recognize
0:35.5	him from being on the Ricky podcast before and from his YouTube series how I got
0:39.5	started which aired on the Bigger Pocket Ricky YouTube channel.
0:43.0	So Noah, thanks for joining today, brother.
0:44.4	Thank you so much for having me today, Tony.
0:45.8	It's a real honor to be here with you.
0:47.3	Yeah, dude, excited to jump in with you, man.
0:48.7	So today we're going to discuss the importance of sewer scopes
0:51.9	during your inspections, why you need to stick to your strict
0:55.2	application requirements, and how to move on from your bad property manager.
1:00.8	So I guess first, let me maybe share a brief overview of this story that we found inside the
1:06.1	forum. So this form was a story was supposed by someone named Rants and here's what
1:10.8	Rants wrote. It says in February of 2022, we purchased a newly renovated three-unit
1:16.0	building in the South Austin neighborhood of Chicago. The price was $500,000 and we used a debt service coverage ratio or DSCR loan for the purchase.
1:26.0	We quickly found tenants and we were off to a great start.
	...

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