All Forum Posts by: Daniel O.

How many square feet is your roof? How do you know? Does that include the price of the replacement shingles? If so, what kind? Do you pick them out and buy them, or does the contractor? How do you keep the contractor from charging you for 30 year shingles but only installing 15 year? Do you remove the old ones? Do you get a dumpster? How, and how much does it cost? What if there are already 3 layers old old ones? How do you know and what do you do if the boards the shingles are nailed into are rotten? And most important of all, how do you figure out what all of this will cost?  @J Scott pointed you to a great reference book. Part of what it will do is help you by giving you a structure for estimating costs. But like he said, its hard. Its also complicated.  Good luck.

@Vian Simpson I've looked into CR quite a bit. My impression is that it is hard to get the kind of returns there that you can get in Canada or the US. There are LOTS of people who will tell you otherwise, but they all seem to be trying to sell you something. I've been watching the market in a couple of places there for about 3 years, and many of the same places are still on the market. To me this says that it could be very difficult to sell should you decide for some reason that you needed to do so.

@Steven Frey you need to read up on your local laws ASAP. It is not common, but some places will actually give the squatter rights after they have squatted for a certain amount of time. Does the lease dictate the right of the tenant to allow someone to stay until the end of the month? If so, you may be stuck. But if not, you need to make it clear to the person in a firm but polite way, that they are not welcome to stay there. If they tell you that the tenant said it was OK, politely explain that the tenant does not have the authority under the lease to give that permission.

Make sure the utilities are all in your name and that nobody is authorized to turn them on or transfer the name without your permission.

My recommendation is that you take action to have the person leave voluntarily or be removed as soon as possible. But make sure you are on the right side of the lease and the law when you do so.

@Wave Taylor you are right, there are several auction houses working in the Baltimore area. I suggest you read the listings carefully, then read them again. Be very clear on what kind of title will be conveyed, as well as what the buyer's obligations are. Typically you are not able to inspect and then back out for cause without losing your SUBSTANTIAL EMD. You also need to be clear about what outstanding tax or utility or HOA bills you will be responsible for. If you have time, I suggest you go to a few of these auctions to get a feel for them. Some are held on the premises, some at the court house, and some on line. Some auction houses charge a hefty buyers premium (ca. 10% is common) while others charge less. Depending on the property and the condition of the title, it may be difficult to obtain financing before closing. There are wholesalers and out of town buyers at many of these auctions, so it is not uncommon to see places sell for more than they are worth from a cash flow perspective. But who knows, you might just get lucky. Good luck!

@Chris Farrugia, things are not hopeless. If you think you have the place priced great for the neighborhood, you might consider raising the price a bit and offering $10K toward a kitchen remodel. Doing that changes the psychology of the deal. That way people are only looking at a slightly higher monthly payment, but they feel like they come out with 10K in hand for the kitchen. If a buyer is challenged to come up with the down payment, needing to come up with another 10-15K for the kitchen may deter them, especially when you are competing against places that already have that new kitchen installed.

Hi @Linda Dalton, the answer is that it depends on what the local law says. This may be governed by the municipality or by the state. If the lease is between the PM and the tenant, then you should execute a new lease. Local law will determine whether you can change the terms unilaterally. But if your tenants are agreeable, it shouldn't be an issue. 

Is your concern that you are stuck with them or that you are stuck with a lease whose terms you do not like?

@Patrick Philip, slow down and step back for a minute. You are getting a lot of good advice here. People are being polite and helpful, which is what you will generally find here on BP. But what they are politely telling you is that you are asking questions that suggest you don't (yet) know enough to dive in to rehabbing without really risking your financial hide. I don't mean to sound critical, but if you can't figure out what a place needs to get it into shape to sell or rent, then you can't figure out how much that might cost. Rehabbing is a lot of work. And while you can make a good chunk of money at it, it is even easier to lose a good chunk. The traffic light is blinking amber: Proceed with extreme caution.

@Nicholas Kuton, welcome to BP. There is a TON of information on both of those topics here. Your best bet is to listen to the podcasts and read some of the books that you see mentioned frequently. If you are looking for rental properties, then you are looking for cash flow. Get yourself a cash flow calculator (available here but also online, or you can make your own), and start running the numbers on places that you see advertised. The time you spend reading books and reading posts here is an investment in your education and your future. While it will help you find good deals, even more importantly, it will help you avoid bad ones.  Good luck.

@Chad Fagan, it is not clear from the information you have provided what your outstanding obligations on the three rentals is. Did you purchase them outright, or are you paying mortgages on them?  If so, fixed or variable?

Unfortunately, interest rates are rising. You need to look at the terms of your LOC and see what your interest rate on the HELOC *could* be over the next few years. Could it go to 6%? 8%? What controls the increase?

Then take the "worst case" interest rate and look to see what your monthly payment will be. Can you cover that payment with the cash flow from your three rentals? Similarly, if you have variable rate mortgages on the rentals, look at what the cash flow looks like if your interest rate goes to "worst case".  Assuming you are still cash-flow positive under the worst case scenario, then you can consider refinancing one of the rentals as @Shaun Weekes suggests. The key here is not to get yourself leveraged to the point where you are suddenly in trouble as rates rise. For this reason, I suggest you refi into fixed rate rather than variable rate products, even if the rate you have to pay now is higher. Rising rates are going to start biting people who are heavily leveraged, and you don't want to be one of them.  Good luck.

@Niyi Adewole If the place is going to need new paint and carpet anyway, why not just keep the tenant who made a mess of it? Use some of the cash flow and the security deposit to make the repairs when they eventually move out. And when it is time to replace the carpet, don't replace it with carpet. A good quality laminate or vinyl flooring will last longer and be more resistant to wear and tear. Costs a little more up front, but you only buy it once.