All Forum Posts by: Daniel Suarez

Curious where are you buying and what kind of property? I invest in Baltimore county and don't have that problem.

Hey all, wanted to share with everyone my experience purchasing my first multi-family and maybe help some people and also get some tips on how to improve the process going forward. I currently have 8 single family properties that work perfectly fine so this was my first multi-family

The Details

16 unit, 1 bed 1 bath apartment building in Oklahoma City

$750k asking price got it for $650k

5.35% IR, 25% down, 10 years balloon amortized 20 years. 

property management 7%

The property was in ok conditions, fully occupied, rents were between $425 and $500, we had to evict 2 tenants who kept their units filthy and were problematic (roaches and dirty) 

Remodel

We're fixing up those 2 properties, replacing the floors with laminate, new granite counter tops, new split unit HVAC and new bathroom and paint. All and all paying 12k to fix up each of the properties (these 2 are the only ones that were in awful conditions) All of the fixes should be ready in a month according to contractor (of course it will take longer) but we are thinking of raising rent to $600 for those 2 once ready. 

Problems 

After closing, and my property manager talking to each one of the tenants, trying to a) see which month to month tenants can sign a longer lease and b) changing the payment method from dropping checks to the office to either paypal or bank deposit, we started having problems with 3 tenants. 

1) Doesn't like depositing checks or using paypal, was agressive to property manager and is breaking her contract by leaving on Saturday because she doesn't like the way the new management is running things. 

2) Find out that the other tenants pay more money than him for rent and wants to pay the same amount as the others or leave. 

3) Also doesn't like the new management and will leave at the end of her lease this month. 

So, we might potentially lose 3 more tenants by the end of the month. I can go the legal route to enforce their contract but I feel like involving lawyers is not worth it, it is not worth dealing with these types of people. This will also give me time to fix up those places as well (not as bad conditions as the others)

I just hope that once these 2 apartments get fixed up and rented things will start turning around. I'm just afraid of a couple of things. 

a) Maybe I over rehabbed both places

b) Old tenants scaring away new potential tenants

c) not being able to fill in the vacancies. 

Hi All, 

I'm looking at a multi-family property in Fallston MD. The numbers are very reasonable but I was wondering if anyone knew how good the area was for rentals. These are 2 and 3 bedroom apartments, but i do see that it is in a very secluded area. It has a 80% occupancy, but I just don't see many rentals around the area. The property is about a mile away from Fallston highschool.

Thanks so much in advance. 

Hello all, 

I'm having a small dilemma. I currently own 8 rentals (all with conventional loans) but I still don't have my own primary residence.

Would you guys suggest me buying my own primary home before getting more properties? (in the fear that I might not qualify for my own once I try to buy) or should I not worry about it?

Thanks in advance. 

@Nicholas Aiola Thanks so much for doing this! Do you have Venmo or Paypal where people could maybe tip you for the amazing help?

2 questions. 

1. If I live 2 hours away from my property and I drive over to show the property, can meals be deduced when visiting the property? How about hotel if deciding to stay overnight. 

2. Is the cost paid to clean a house before the tenants move in and before advertising deductible? 

thanks @John Underwood .

@Thomas S. I know, I need to be stricter with that. In Maryland you don't need to serve a pay or quit, you can evict directly. Would you still serve a pay or quit? 

 @Michael Noto , I think it's the latter. Would you serve the notice as a letter or email?

@Kyle J. Thanks so much, I have never thought of wage garnishment. The tenant and the property are in Maryland, I'll look it up and see if I can do that. 

I have a tenant who's always paying late, but this month he's already behind December and January. He's a good tenant, keeps the house clean, does not ask for many things and does some repairs himself. 

He says he will have December and January both by the 15th (he says he's working extra hours) Now, my plan is this; if he doesn't pay most of it for both months by the 15th, I will get together with him and offer cash for keys (trying to avoid eviction for many reasons) My question is, where do people actually meet with tenants to discuss this thing? He owes 2 months of rent, we you offer the cash, do you let those unpaid months go and just keep the deposit?, if he doesn't show up for the meeting I'll evict right away.

Also, he's a police officer, and although he's never even suggested using that as leverage for not paying rent or anything, I'm a little worried because well, he has a gun.

Thanks in advance. 

@Ramy Man for your specific question, i don't think there's a way to have a good cashflow with a 20% downpayment in the NOVA area. Just as an example Fairfax 3 beds 2 baths  townhouses are around $440k now, that's a mortgage payment of $2300 with insurance and taxes, the same house would rent for about $2300 as well, so you would get a negative cashflow given repairs, cap ex and occupancy. 

One of the main things that I value in a PM is initiative. For example, if a tenant calls and says that the there is no hot water in the house, for the PM to get a handyman to fix the issue if he can instead of just calling a plumber and charging $300 for something simple. 

I also like to keep updated on the process of placing a tenant, a daily update on how many people viewed the house, how many applications, etc. 

Hi Moises, 

Numbers look pretty good. How did you decide to invest in that area specifically?