All Forum Posts by: Brandt Smith

@Rikako W. require them to apply/qualify for the rental unit, and don't loosen your requirements just because they are already in the unit. As for raising the rent, do it immediately (with the year lease). Just be 100% sure you know what market rents are. No renter will move out unless you are overpriced.

@Richard Anderson are you looking at MF or SF? If SF, don't use a LLC or S corp. You can't get Fannie Mae loans if you do, and your insurance will provide significant protection.

@Steve S. it is usually better to finance the equity out of the properties and use to purchase additional real estate. This allows you to shelter your income with depreciation and increase your cashflow via multiple properties.

@Garvin Yu why try to pay it off faster? One of the greatest tools you have with real estate is leverage. When you pay it off early (or minimize your leverage) you lose this benefit and your returns go down. 

@Kurt Traynor you aren't going to like this but you are in bad situation and just need to get out of it. Bite the bullet. Find out if it was permited and what is required. Either fix or demo the extension.

And use this as an (expensive) lesson. Always be sure of what you are buying.

@Simen Gundersen 10% is a high interest rate. I'd find alternative financing. Also, if the numbers don't work, don't invest. You can't always make things fit so it is profitable.

@Letitia GlennNo, no, no! The security deposit is to cover you if he damages your place. You need cash for that, not paint. Also, will he do a good job? How will you deal with a poor paint job when he has moved in? 

@Matt Z. a LLC is only used to provide you a measure of liability protection. Unless you are doing MF, I would avoid. You should have plenty of protection via your insurance and your umbrella policy. Also, you will still get sued and their atty will do everything to pierce the protection the LLC provides.

Also, you can only get non-recourse loans in an LLC. Higher interest rates and more difficult.

An LLC provides no additional separation between your business and personal activities.

@Brien OConnor you may get a bit more rent but it most likely is going to go at the market level. They are looking more for clean and updated than anything else.

@Brien OConnor it is hard to find a $10k rehab if you do it right. You don't want to over rehab (I rarely find I would want to live there) but just replacing flooring and HVAC will run you $7k-$11k. Add in paint, counters, appliances, etc...and you are usually at $15k+.

That being said, it is easy to over rehab. Don't go over the standard for the neighborhood. Your goal is to the neighborhood's standard, clean, and fix all major potential repairs (so you have no maintenance problems for 5 years).