All Forum Posts by: Brendan Miller

@Victor Funes you'd have to get a separate water meter installed and an account setup with the city. The easier option is just to bill back the prorated portion of water/sewer bill to tenant, which is referred to as RUBS. You'd just need to make sure that you indicate this in your rent listing. 

Welcome @Phyllis Michele Hames! I would say the horror stories that you hear are likely related to the quality of tenant that you rent to, and dependent on the type of property that you intend to purchase. I would put heavy emphasis into how you pre-qualify your potential tenants (credit checks, income verification, past reference checks, etc) and you'll be fine. 

@Gary Ryan Herndon, i recently went through this with my conventional lender, and the guidance that I got was that I was capped at 2% seller credit of the sales price, and I was advised not to associate the credit with repairs in the offer as it causes a lot of red tape on the lender side. I'm surprised to hear of 3% being your cap, so I'm curious what the differences are between both traditional lenders.

As for the difference to get the other 3%, I'm not sure of other work arounds other than the seller making the repairs prior to closing (in an amount that is close to the 3%), or removing the other 3% from the purchase price.

@Curt Pennala what's the home's value? I.e. 6-7% on $100K is a lot different than 6-7% on $400K. Either way, even if it's a $100K property value, then a $6-7K increase in value is worth it in my opinion if the cost is only $1K. You'd need to make sure the work is permitted, etc if that's required in your area. It also is heavily market dependent, so I'd make sure you have a couple of good comps in your area that support that 6-7% increase assumption.

@Todd Kozak, if they don't respond, then I'd recommend communicating that if you don't hear from them, then you'll have to assume they aren't interested in resigning and that'll you be looking to sign a new tenant come 10/1. You should be well within your rights to head down that path, but I'm not sure what your state specific tenant laws are. The tricky part would be if they don't move out, then you'd likely have to look into the formal eviction process or a cash for keys type of arrangement. Another option, some leases often have an emergency contact listed (not sure if yours does), but that could be another option to reach out to their emergency contact, and indicate that you haven't been able to get ahold of them and just want to make sure they are OK

@Curt Pennala it's really a financial question in my opinion, so we'd need more info to answer it accurately. I would assess what the cost is to add the bedroom (based on all the work you described in your post) versus what the rent premium would be from having the extra bedroom. If you're able to recoup your cost within a couple years, then I'd say go for it. It also depends on your goals, and how long you're looking to hold the property. If you're intending to hold it as a long term rental, then it may be a good investment depending on the costs vs return. If you're looking to sell in the next few years, then I'd want to make sure that the ROI makes sense in the short term, or it increases the future sales price. Good luck!

@Todd Kozak, not sure if the property is local or not, but if so I'd try stopping by in person to discuss. In person discussions are harder for people to avoid than text and phone calls in my experience.

@Ruth R. You’ll get a much better price if the property is vacant, because you’ll attract owner occupants versus just investors. One option to consider would be cash for keys and/or to help with their relocation cost to a new place. For example, I just did this with one of my tenants to cut their lease short midway through and paid them one month’s rent ($1850) to help cover moving costs and the premium on a new lease. The premium you’ll get from listing the property while vacant should far exceed any assistance you choose to provide your tenant

Hi @Jonah Cervantes, congrats on the new job and taking the next steps to starting your real estate journey. I'd recommend taking advantage of the VA loans that you'll have access to. I believe you can get 0% down on properties (or very low down payments if 0% down is no longer available). I'd start with house hacking a small multifamily (2-4 units), live in one and rent out the other. I got started with buying a primary residence and then eventually renting it out after I upgraded, it's a good way to get started with someone that doesn't have much cash in the bank for a down payment.

$1,000 is definitely better than $100. I'm not saying it should be $2,640, I'm just saying that's what I do within my deals based on the type of properties I go after,. Most homes that I look at are in the 1980s-early 2000s so fairly newer properties. If you're looking at a home in the mid-1900s then you may need more. The $1000 should cover the day to day maintenance items that pop up (water leaks, equipment/appliance repairs, etc), but what it won't cover are the big ticket CapEx expenses (different than maintenance) that you should be budgeting for each month (i.e. a roof being replaced every 20yrs, etc). I don't want to scare you out of your deal, I just want you to be prepared for a scenario to handle more expenses down the road.