All Forum Posts by: Ed McIver

Excellent: I would have passed, but you pulled it off.Long distance "High Five".

Thank you very much for your input. I agree with you on several of your points, And in my original post I was looking for the pit falls for this type of arrangement. You have listed a few. 

I agree the tenant is too much work. She started out on time, but was 2 weeks late this month. I am hoping she leaves on good terms and soon. In the mean time I am trying this last ditch effort to avoid eviction.  

I will post the results.

There are many ways to help. He needs to be in an apartment he can afford. Imagine the stress that comes with not being able to pay the rent on time. Being evicted will help him.

Leave your check book closed. Help him move, help him find another place to stay, If he leaves his apartment clean release his deposit quickly or to the next landlord. Negotiate the rent with the next landlord. Letter of reference (don't lie) always pays eventually, but needs a cheaper apartment. Put down the deposit on the moving truck.

you can help him plenty without spending a dime. Or you can give him money. It is up to you. 

Investment Info:

Large multi-family (5+ units) buy & hold investment in New Windsor.

Purchase price: $372,500

This is a very old building but it cash flows well

What made you interested in investing in this type of deal?

cash Flow

How did you find this deal and how did you negotiate it?

3 months

How did you finance this deal?

Bank Loan

How did you add value to the deal?

I am raising rents as quickly as possible. The building was also neglected. I want to complete much needed upgrades to increase the rent and reduce maintenance.

Lessons learned? Challenges?

The insurance company gave us a list of issues they wanted addressed. This was unexpected. I have a list of improvements I want to make but the building is currently occupied and cash is tight after the 25% down payment.

Thank you for your input.It sounds like you helped them become investors. This vet was looking for an apartment not investing advice. I would still like to help him. I am going to try to help him find something.

I have created a spreadsheet with running ledger to project the account balance for 1 year. Week 25 and 51 were both even. And on weeks 39 and 47 the tenants account actually had a positive balance. But The average balance is -$392  behind a standard rental contract. So this arrangement could be considered $392 loan for the term of 1 year. Assuming 10% interest rate the cost to the landlord would be $39.20.

With this in mind I met with my tenant. We agreed to a rent increase of 5%. This equates to a $600/year increase. This will compensate me for the extra trouble of adding the extra deposits into the accounting.

I have met with my tenant. This is what we agreed.

The lease will remain a standard month to month lease. Officially the payments are due on the first of the month. However if she pays 1/26 of the yearly lease every 2 weeks I will waive all late fees. 

 I will consider it a win if I can avoid eviction.

Thank you all for your input. The vet who applied for my rental had a very poor credit history. Even though I wanted to help him I simply could not. 

I think if I want to help people with my rental business i should make money, then contribute to my favorite cause. 

I just had a veteran contact me to rent an apartment. Is it legal to give veterans preferential treatment?  The application process would be the same. I don't want deadbeats and I would insist on credit checks and back round checks. I am not asking if it is wise. Just asking if it is legal.

Agreed

Thank you all.

Yes the tenant is struggling to pay rent on time. She is fine with paying the late fee. But I am worried that she will fall farther behind. I do not want late fees, I want the rent on time.

It could be delaying the inevitable eviction. (months of lost rent, more time spent at courts and extra fees) or maybe cash for keys. two loosing situations for me.

I use Cozy.co I love it but at the moment they have no biweekly option. This is a huge shortfall IMO.

Thank you all