All Forum Posts by: Bill B.

Your tenant is probably willing to pay over market if he’s able. The property has much extra value to him. He doesn’t have to move and he’s next to his kids. Even if $235k they’d probably pay it if they could. 

I’d start with them getting approved for a $235k purchase. If they are approved.  Then I’d find a 1% realtor, I assume they exist in every state. Explain you already have a buyer lined up and what you want the terms to be. 

You can discuss leaving the agreement if this deal falls through. 

You probably need to find new “comps” as well. There’s zero chance the comps are $800k ($600k-$1m) and they can’t get $400k. Unless you mean comps after adding $300k or more in renovations. Those aren’t comps. 

If you save 2 years of weed treatment payments, how much more do you think it will cost you in two years to treat the weeds? (How much more than you saved.) That’s your only real cost. If you don’t care if they stay you could also have them agree their security deposit will be used to removed any weeds at the end of their lease. 

You have to price property 2 on what it’s worth. It doesn’t matter own but what you paid for it or what you owe on it. 

I assume you aren’t willing to sell property 1 for only $1,000 because you don’t owe anything on it. So you agree what you owe doesn’t matter. 

I also assume you are losing money every month on property 2 with mortgage interest, insurance, taxes, utilities, etc etc. You either rent it out or sell it for what it’s worth. You’re just paying out of pocket now so that you don’t have to pay out of pocket later. 

Good luck. 

1) The tenant should ask the construction company for reimbursement. 

2) how much money we talking? In Vegas 1,000 gallons would be $1.10. And that’s in the desert. A hose uses about 1,000gph wide open. So MAYBE you’re talking 5,000gallons? Or 10,000 if it was all day? So $1-$5-$10?

3) They definitely shouldn’t have used water without asking. How does the tenant know they did? Came home and made them stop? Came home and said ok? Or just “The bill is high so it must be them”? You’d hate to accuse them and then find out they bring their owne water, or use hydrants, or don’t even have garden hoses. 

What's the purpose of renting in the LLC name? You're obviously going to have to personally guarantee the rent as well. The problem with using the LLC is it's going to have to show income of triple the rent. And then when it shows income they're going to know you plan to rent it out. 90-99% of the time that won't be allowed by the lease. (Subleasing will be prohibited and the names of all adults living there must be on the lease.) The other 1-10% of the time the landlord will know they can charge any amount of rent they want, especially if you have tenants who's stays overlap the end of your lease. (Imagine you have a 60 day lease starting with only 30 days left in your lease. The landlord says they want 50% more per month for the next year. Or…they aren't renewing you and you have to be out in 30 days…)

Your only real hope is to take advantage of desperate mom-pop operators or “accidental landlords”. This strategy is best when you have nothing. That way you can always walk away “judgement proof” if it doesn’t work out. Once you have assets please stop doing this or you risk everything you’ve made, even regular w-2 income, especially if it’s obvious you never lived there. 

Ps  Make sure you have waaaaay too much insurance as the landlord’s insurance policy probably won’t cover any loses he has if he has a regular landlord policy. Which means in case of an accident, dog bite, fire, theft, etc etc, he’s going to hold you personally liable  

Good luck. 

So using your math, the tenants already owe you years of increased taxes and insurance costs. For the years you haven’t raised the rent. But here’s my thoughts. 

1) You are probably paying to play property manager. Your property manager would probably charging enough extra rent to pay for their fees. 

2) How much your costs go up don’t matter one bit to the tenant or how much rent you can charge. What if tomorrow your insurance and property tax’s went up $500/mo. Would you raise the rent $500? What’s the plan when the current tenants move out and nobody will move in at that new rate? Your costs don’t matter at all. Only your competitions price does. 

3) If you refinance at a lower interest rate and your costs go down are you going to lower rent?

4) Imagine next week your local market institutes rent caps and you are stuck below market “forever”. With 2-5% rent increases base on rents that are 20-40% below market. (If you haven’t increased rents in years.)

Please reach out to a couple local PM’s. Ask them how much rent they would charge for your property and how much it would cost you I’m betting you’ll find you’ll make more with less work while the tenants receive better service. 

I didn’t know they still built that kind of angled support. I replaced one almost 30 years ago in MN and they laughed at the support. Replaced it with 4x4 or 8x8 straight posts from the ground. 

But my real question is.  Is that really an egress? Is there a way to get to the ground from that deck? It’s not really an emergency egress if you’re stuck on the patio. If the city says it can go I take it out because it’s ugly, even if it’s cheap to repair. 

Is your deductible at least $2,500? Try $5,000 or $10,000? You should never make a claim below $10k anyway. Figure out the payback period. If it’s under 3 that’s a definite green light. Less than 6 is probably still a good idea. 

With a dozen properties over 25 years. (300 property years ) I’ve made 2 claims ($30-35k) and ate 1 ($7,500).  higher deductibles have saved me $10’s of thousands. 

If you buy the townhome you're not renting. If you rent the SFH you're renting not buying. The property type has nothing to do with if you're buying or renting.

Imagine a SFH with 1-3 shared walls, that's a townhome. Cheaper to build, usually cheaper to buy, possible to have more "neighbor problems". Either because you share a wall or have a smaller yard separating the two homes.