All Forum Posts by: Corby Goade

Sounds like you are trying to refi as a package? Unless they are over 4 units each, I am not sure why they would be considered CRE. I'd find a broker you can trust and ask them to find a bank that will work with you on each property individually.

If you DO package them and get a commercial loan, that would open you up to more traditional mortgages, if you are looking to grow your portfolio.

If you want to help a friend, GIVE them some money, don't loan it. Whenever there are strings attached to "helping" a friend, ie, collecting rent, there will be problems. If you really want to help them, you could help them improve their credit and learn how to talk to a potential landlord about their issues. I would never rent to a friend or family member, there is no way that it ends well. I have several family members who are contractors and I don't hire them, either. I've tried it and that doesn't end well either.

My strategy never changes based on the economy- I buy and hold, only consider 1% or better deals within a certain area and price range. If you change your strategy based on the economy, you are bound to have problems. I don't have any idea about the market in Illinois, but for me, when the economy changes, the only thing than changes for me is how many of those deals I can find; In a "hot" market or economy, fewer deals, more competition, easier to get money. Everything is opposite in a cooler market climate.

In situations like this, I prefer to offer the buyer a credit rather than take responsibility for the actual repairs. Once the deal is done, I want it to actually be done.

Just a thought- if you are having trouble getting cash out in the name of your LLC, why not quit claim it in to your personal name, refi, then quit claim it back to the LLC?

I like "52 Homes in 52 Weeks" by Dolf De Roos. He and his partner document their attempt to purchase 52 investment properties in a year. The detail each deal, how they found it, negotiated the sale and what they did with the property. There's not a ton of detail on each deal, but there are so many ideas on how to find, acquire, negotiate and exit.

Without risk, there is no reward. If the ARV of the property truly is $230 and you can get it for $120, what is the risk? What if you do $15k of the renovations and run out of money? Could you put it on the MLS for $160 as a fixer and still pocket $20k? If you can use a HELOC to make improvements, that is the best possible scenario, it IS low risk. If you of your husband feel that is too high risk, maybe it isn't that great of a deal?

if you are willing to live there, maybe a 203K?

Yes, you can charge them, but did they admit responsibility? Are they willing to cover the damages? Probably not- so, it's likely that this will or could lead to, at the very least, a strained relationship with your tenant, which should be fine. But, it may also lead to eviction if they refuse to pay- you have to decide if it's worth going down that road. I am certainly not saying to avoid this, but it's common for a tenant to refuse to pay in a situation like this, and you have to be prepared to push forward.

I believe you are required to honor the terms of a lease when you inherit tenants, at least in my area. I love the suggestion above by @Joseph Pugliese of fixing up common areas first- it shows you are committed to improving tenant's quality of life and treating them with respect, that goes a long way when having more difficult conversations. That said, we have a standardized renewal letter that we use with two options- one for a one year lease at approx. 7% increase and one for a two year renewal at a 4% increase. Tenants feel empowered to make the choice and we've never had to have a conversation about rental increases since we've started doing this. Obviously, we only offer renewals to good tenants, but that's been a game changer for us.

Lots of good advice above already, so I won't add to that; yep, this is standard landlord stuff and screening properly is the number one thing you can do to make your business profitable. Something that I'd recommend, especially as a house hacker, present yourself as an on site rep of the owner. You can pass some of those uncomfortable interaction off as part of your "job." I'd also find some standardized documents to use, there are lots of resources here on BP, but using standard leases, addendums, etc, can go a long way in protecting you and presenting yourself in a professional way. If you come off as casual and friendly to the tenant, they'll look at the lease in casual way too.