All Forum Posts by: Tobias Falzone

It depends heavily on the work involved in actually separating the pipes for each unit.  Sometimes the pipes are already separated and located in a convenient place, other times it is a maze of pipes that need extensive work to separate.  There are also newer virtual meters that you can be used to privately bill back water usage to each tenant while still using one master meter from the city.  This can be a better option in some cases in terms of renovation requirement but adds to management paperwork.

The only gray area with maybe squeezing a 5 unit through conventional financing is if the seller agrees to 'convert' the 5th unit into storage space before sale.  If one unit is empty, or smaller than the other then that could be a good option if you have a cooperative landlord.  Sometimes doing this can actually increase value in the property due to better accessibility of residential financing for smaller properties.

I feel that limiting short term rentals is going to be a continuing trend around the country in areas that don't attract a lot of tourists.  In suburban neighborhoods they tend to be disruptive, and once a city gets enough complaints from neighbors about the airbnb limiting their enjoyments of their properties they tend to step in.  I live across the street from a neighbor that airbnb's their home about 2 months out of the year, and I notice when a bunch of weird cars and people show up into the neighborhood.  I want to eventually be able to do the same thing with my primary residence so I don't complain, but I'm sure that some of my other neighbors will, especially ones with small children.    

My recommendation is always start local when getting into real estate investments. You are far more familiar with your local area and there are opportunities to be had in all markets hot or cold. By moving, you might be able to find lower price points but you will no longer have the home field advantage knowing which areas are good or bad. In many markets prices vary street to street, and it takes a long time to get up to speed on the nuances of an area. Go to a local REIA meeting, like NUREIA in your area. Find out what investors are doing in your area and try to help them or copy what they are doing. From what you described I would look into buying a second property in your area, preferably one that you can improve while you live there.

The Folsom rental market has very tight supply for units and high demand and affluent area's real estate markets are better insulated from downturns than less affluent areas.  I am personally choosing to hold my rental property in Folsom, mostly for potential appreciation.   I will also point out that real estate rental markets and real estate values don't rise and fall in lock step.  They are different markets serving different customer bases.  Do renters care if mortgage interest rates go up?  Nope, doesn't affect them directly.    If you have sufficient cash flow, then you will not be forced to sell during a recession.  You are locked into a good rate a 4.25%.  The real deciding factor is what alternative investments you would switch to if you sold.  I'll be you could find an investment that could do better than 4.25%, which is what you would get by paying down a mortgage.  Don't discount the value of being able to sleep at night, though.  If your investments are keeping you up at night, that alone is a good reason to re-evaluate your holdings to better match your risk tolerance and long term goals.

Its a very thin deal for Ogden if it is near the city center. On the nicer outskirts it could be more attractive, but it still doesn't cashflow once you account for maintenance and property management. Why are you going with a heloc? Try to get a fixed rate 30yr for the whole property if you can. For the purposes of cash flow calculations I will plug in 100% financing over 20 year amortization and take 35% for expenses (PM, CAPEX, Maintenance, Utilities). This builds in a cushion and if it still looks like a good deal, I will look at the property further.

With heavy smoke damage, I recommend budgeting to paint the units as well, using a shellac based primer underneath to seal in as much of the smoke as possible.  Utilizing a Hydroxyl generator in addition to ozone will also help more than ozone alone.

Cash for keys would be my first option, but would bring the notice in case they decline or don't respond.  Its a negotiation and will be dependent on their conviction to stay.  Be as sympathetic as possible but try to make it a lot easier for them to say yes than to say no.  Moving support may be helpful as well.  They don't want eviction proceedings coming up in a background search when they are looking for a new place to live anyway.  Make the cash offer dependent on them leaving the property in its current condition by a specific date.

My understanding is that it is a standard eviction process just like you would have for a standard foreclosure or eviction. It will likely be less expensive and less likely they will trash the property if you try to offer them cash for keys.

I say that assuming both signatures are actually on the document. If the agent never signed the agreement then the lease was never fully executed.