All Forum Posts by: Chris Lynn

I include W/D with my rentals and fortunately have only had this issue with one tenant.  Unfortunately, it happened with the same tenant multiple times.  My old answer to your question would have been to try to repair it yourself if it's a simple fix, else buy a used one and drop it in.  After going over there multiple times, my new answer is to buy a new pair and be done with it.  I bought a Roper from a warehouse type place here in town and haven't had an issue since.  I'm all for pinching pennies, but sometimes it's not worth the hassle if you have a day job (in my case) or are managing remotely.  Next time, you may consider not supplying the W/D or offer them as a courtesy if they're already there but stipulate that if they break, you aren't fixing or replacing.

Thanks for the feedback.  I was going to have the tenants sign my lease anyway, so I guess I'll just follow my typical process and collect copies of ID's and such.  I don't know about a criminal background check since they're already there.  

I've purchased, renovated, and leased 5 previously owner occupied single family homes over the past few years.  As a local, I've been ahead of the out of state money in terms of neighborhoods I've invested in, but the out-of-towners have finally found my spots.  So I'm trying another area that's sketch, but has money flowing in to the East and West of the neighborhood.  I have contract on a leased up duplex that is billed as having long term tenants from 2009 and 2011.  I have copies of the original leases with the names of the tenants.  They rolled MTM at the end of the one year leases and are MTM now.  Some online detective work indicates that the folks on the leases (both units) live somewhere else and different people live in the units now.  So it appears that I'm buying a duplex with effectively squatters that pay rent?  My other properties are a higher class, so this is not something I've encountered before.  To give you an idea of the area, it's a mid $30's purchase price and combined rents are $552.

My plan was to leave well enough alone and just collect rents for a year or so.  As others start to renovate around me, I'd move one side out at a time to follow suit, pushing combined rents up to the $800 to $1000 range.  I guess if these folks aren't even on a lease, they don't have much of a position to defend when the time comes to turn the unit.  Anyone have any experience with inheriting tenants that aren't technically tenants?

I’m curious to hear how this turned out as I’m considering something similar.

CashApp for most (love those "dings" on the first).  I pick up cash from unbanked tenants.

It depends on the appraised value of the current property.  Generally, you need to have 30% equity for an investment property mortgage, so to do a cash out you would need to have more than 30% equity now.  I'm going through that process with one of my properties and the numbers made sense because I was going to refinance for a better rate anyway and I had a TON of equity in the property.  When you refinance, there are fees just like when you get a new mortgage.  I figured that since I was paying the fee already, I'd pull the cash out at a very low interest rate and have it available for another purchase, negating the need to pay more mortgage fees on the next deal.  The downside is that the interest rate was a little higher for a cash out mortgage vs a traditional refinance.

I would suggest you determine a reasonable market value for your property and then multiply that by 70%.  Subtract from that number your current balance and 1.5% for fees.  If 70% of the property value less your current mortgage (plus fees if you roll them in) is enough money for you to justify the fees, the potential increase in your interest rate, and you plan to hold the property for at least a few years, then do it.  Sorry if I was too simplistic or answered more than you were asking.

Example (does not consider interest rate change):

Property Value - $700,000 (made up number)
Current Mortgage - $428,000
70% of Value - $490,000
Estimated Fees - $490,000 x 1.5% = $7,350
Available to Cash Out - $490,000 - $428,000 - $7,350 = $54,650
Assuming these are real numbers, would you be willing to pay $7k to get $55k?

I think partners are overrated.  Find a side hustle and save your money so you don't need a HML.  Take the time to build up your cash and credit so that you're ready to do a deal on your own.

After commissions and fees, wouldn't it be more in the high $20's?  If it's an appreciating area, I'd probably hang on to it.

Does that mean you are paying her $100 portion for March or giving her cash for some amount when she leaves?

In my opinion, your first purchase needs to be successful.  This seems like a ton of risk.  If you're a contractor and know how to do all of this work or have subs in place that you can manage, that's one thing.  But if you're a guy that wants to flip or have rental properties, I'd suggest something that just needs lipstick to get your feet wet on.  It doesn't have to be a home run, but it needs to be a reliable double.  I learned a ton from my first house.  It was functional as is, but hadn't been updated since built in the 80's.  I learned what needed to be updated and what didn't.  I learned about paint colors and how I had no business picking them.  It took me entirely to long to make ready and I had several false starts that cost dollars.  In the end, I got it done and rented and learned valuable lessons for my next properties that needed more significant work.