All Forum Posts by: Andrei Stegger jr

@Brandon L. thank you for than info. iI'm definitely going to go through those forums, i need all the knowledge i can. I appreciate that!

@Ronald Rohde that's the thing. I'm not to sure on what stipulations there are when raising rents. It's something I've been looking into on the internet. I want to make sure I'm doing it the right way

@Richard Sherman sorry for the late reply. Yes you are absolutely right, Texas is good state for landlords. 

I am planning on raising the rents ASAP. I'm just trying to figure out the proper way to do that. I have done it once before to a few properties, but im not too clear on the aspects. Is it a 30 day hand delivered notice only on month-to-month leases? and if they don't want to pay then its another 30 days if they write a letter declining? im still a bit iffy on that.

But yes i do agree. I would much rather do these repairs out of cashflow. But another thing to consider is that these houses are severely out of date and need modernization.

I agree with that route. Doing exterior work and major repairs like roofs and foundations, while rehabbing interiors as they become vacant. Ok that was definitely some good knowledge right there, i will make a note of that. Get all of that done to avoid future headaches. Thanks so much for that. I would like to have all of the properties eventually look modern, tenant bases budget in mind. Higher curb appeal will attract more potential tenants.

I would honestly prefer to higher contractors so i can focus more on running the business. The price was $4200. Well based on market value they are in the ballpark of 1.5M. But i know that since they are outdated and need work they are gonna be somewhere below that.

CPA, That's definitely another thing i want to look into. I'm just not sure if we can afford to hire one with the cashflow being generated now. After doing some networking my lawyer gave me a number of a CPA he trust and knows personally. Just need to find out how to fund this.

Also, instead of doing a refinance, how does an equity line of credit work? could you also enlighten me on the LTV portfolio loan.

Thank you again!

@Dylan Hargrove @Thomas S. Thank you both for replying. They definitely are well below market value, but in their current conditions I don't really feel comfortable with renting the vacant ones back out. Also, Im not sure if we can take on another tenancy loss. 

So im currently working on getting funding for a few rehabs as i stated in the last post. I think it'd be best to rehab the ones vacant, maybe a low budget rehab (refinishing drywall, siding, kitchen, bath) im new to this in the rehabbing aspect. We always have done the work ourselves, but all we know is patch jobs. I want to move away from that and actually do nice low budget rehabs using contractors. But at the same time im not sure what a low budget tenant grade rehab would actually cost. So im trying to do as much networking as i can do here in the fort worth area. 

Also if you are familiar with the Fort worth area, a good amount of our properties are in the 76105 area code. A piece of advice that i got from a local property manager is if i want to maximize cashflow, rent out to section 8. He said with houses in that zip code that would be the best route considering i can still maintain my own tenant criteria. I'm not too sure on that though.

@Nathan Gesner Thank you for the reply. Yes, that is something im working on. Also, these houses are severely out dated so im currently working on a way to fund a few rehabs to get the ball rolling.

@Richard Sherman Amazing advice from both you and @Kerry Baird ! thank you for the  quick response aswell.

I am in the buy/hold, our preference is to rent properties.

I know here in Texas if your tenant is on a month to month then you can raise is it by any amount, once a year.

Definitely some great info here. With a 50% LTV portfolio loan i should be able to full rehab to tenant grade each property as they become available. Atleast im assuming that would be the proper way of action?

Yes, our lawyer advised a Series LLC? still want to look further into that. Also acquiring an umbrella policy is on the list as well. Haha yes my grandfather does not like to steer from his old ways. I will start doing that, usually the tenant calls me and we do all of the work. We've always done everything ourselves, we have never hired any contractors or anything like that.

I agree 100%! Exactly we are running a business, that is the mindset him and i need to acquire

@Kerry Baird Thank you for the response! Unfortunately, The cashflow thats generated is not enough to fund any renovations. Quite frankly at this time it seems all we can really afford to do is retuxture the walls and paint everything a modern color with white trim. I also agree with "deferred maintenance" not being a part of your vision, it is definitely not a part of my vision as well. But the cashflow generated does not allow me to do the things i want. 

Also, i will definitely check into "hardening" the properties. There is a lot i still have yet to learn. 

The majority of the houses were built between 1912 and 1955 and quite frankly it does not look like they have been updating much since then.

Also it is just my grand father and I. His mentality is patch them up rent them back at at below market value. But cost of living has gone up a great deal since he started in the 1990's and he has not increased them since.

I will have to look into acquiring a CPA. We have never had one, but i know they would be a great deal of help in establishing everything.

At the moment there is no advisors, really i have just been working with a friend doing all the due diligence i can before calling anything into action.

This is a quote on Texas rent increase laws say

"Texas' laws on raising rent depend on the type of lease. For example, if a tenant has a month-to-month lease, then either party must give a 30-day advance notice of any proposed changes, including a rent increase, according to the State Bar of Texas. If a tenant does not clearly terminate the lease, then that inaction can be presumed to be acceptance of the new rent."

Also, I was thinking the same thing. I was considering 1-2 units at a time. If they leave then i can do a small rehab and rent back out closer to market value to increase cashflow. The more cashflow increases the more increase notices i can send out considering the cashflow increase would be more than we are making now. thoughts?

Thank you for the response,

I actually forgot to mention that all of the houses are severely under market value, considering the rent has not been raised in the last 15 years (crazy i know). Our properties rent average are $600 per unit. I recently compared the properties to that of section 8 rent standards which are $1353 according to the location of the properties. So now im thinking of a rent increase. But im not completely sure on what to raise them to? 

Hello everyone, 

I've recently inherited 17 properties:

14 rented average rent $600

3 houses vacant

Section 8 payment standards average $1353

What would be the best way to increase rent? because current rental income is barely covering repairs, and other major cost associated with owning a rental property are needed that i cant afford.

Would it be a bad idea to almost double the rent?

Because most rent has not been increased in the last 15 years and is severely under market value.

The 14 rented houses follow as 12 3 bed 1 bath and 2 2 bed 1 bath.

The cheapest rent i found locally was a 1 bed 1 bath for $850

I am in the Fort Worth area.

Any advice would be greatly appreciated

Hello all,

As stated above, I would like to acquire as much knowledge as i can on how to expand my family business. My grandfather raised me working on his rental properties through childhood. It has now come to a time where I would like to further re-invest and also invest in new properties. My grandfather is 88 years young but his traditional mentality is keeping us from building upon what we have. We currently have 18 units clear of debt but they are definitely out of date. I was hoping someone has some knowledge they could lend me on what steps i should take. We will be creating an LLC for assett protection soon (our lawyers suggestion), but some of the plans i've come up with include:

1. taking one of our properties and doing a cash-out refi to pull the equity from that property and using it to rehab 2-3 of our properties and repeating the process as many times as needed to completely rehab all 18 units to modern day specification keeping tenant grade budgets in mind. This way we can maximize cashflow and nearly double our income now.

2. Im not sure how any of this refinancing or HELOC work but another thought was to present to the banks our portfolio and maybe they offer a HELOC based on the total portfolio equity and use that to re-invest into all the units.

Please do correct me if I am wrong. As i stated, we currently run 18 units. I have been working on these houses for 20+ years now but i have no knowledge on actually investing into realestate and at this point in my life I have turned my attention soley on expanding through renovating all current properties to double income and maximize cashflow. Any knowledge would be greatly appreciated.

Thank you for your time