All Forum Posts by: Heath D Wallace

1. $350 pet fee per pet. Fee is non-refundable. Cats do more damage than dogs in my opinion.  

2. Screen new tenant. Charge application fee. And add an additional security deposit, but more importantly is "Why".  Why is this new partner wanting to be added to the lease.  Try to understand the relationship and what's going go.  Make sure it makes sense. 

Do a Zoom video with your tenant for a virtual walk-thru!

A few things I noticed, in addition to having the tenant pay the utilities are:

1) Incorporate annual increases in rent higher than 2% (in your area, maybe 4%-5%) with a slightly smaller increase in operating expenses (say 2%-3%)

2) With a gut rehab, I'm not sure why you need to spend $128/month on cap ex, at least for the first year or 2.

3a) An 80% cash out refi is probably going to be hard to get. I'd expect something in the 70%-75% range, depending on your experience and credit score

3b) Also, do you need to borrow $160k? Your total project cost is only ~ $143k. 

3c) Your interest rate is probably going to be in the low to mid 7s, at least

4) All states/areas are different, but I usually see with my CFO clients that their property taxes are higher than their insurance, with taxes often 1.5x higher than insurance.

5) Lastly, I saw PM fee of 8%, are you paying someone else to manage this? You could save here by managing it yourself if you can.

I usually don't allow pets. But if they want to add another partner and pets I would do the following:

1. New tenant application - check all background, credit, criminal, eviction, etc. Today they are in love, tomorrow they hate each other, you dont want to be left with the bad egg. both applicants need to be solid.

2. Do a walkthrough of their current place. How do they keep the place up? I personally don't care about pets as long as the owners are clean and organized. But I likely wont keep a german shephard in a 700sqft 2 bed 1 bath. Big dogs need big homes and big spaces. 2 cats is fine. 

3. $500 refundable pet deposit. This is IF all other criteria is solid. I had people with pets that kept house cleaner than those without. Its not the pet, its the owner. they shouldn't be penalized for owning a pet if they take care of their place. 

@Heath D Wallace

To get this deal to cash flow, you could look into increasing the rent if the market allows or reducing operating expenses, such as lowering management fees, vacancy rates, or insurance costs. Negotiating a better interest rate on your refinance would reduce your monthly mortgage payments, helping boost cash flow. You might also delay refinancing until the property value or rent increases, which could secure better terms or higher returns. Adding extra income streams, like charging for utilities or offering laundry services, can also help improve cash flow. DM me, and I’ll point you in the right direction!

Good luck!

Hey @Heath D Wallace. Did you already buy this property?

@Heath D Wallace Cats can damage your property if not maintained correctly, if your apartment has carpet then cat urine is can get soaked in it if the cat pees on your floor. It stinks and is hard to get out. However, you'll never have to worry about a rodent problem in your house because you have the best rodent exterminators in the market. At least in that apartment. I charge a $25/mo per pet. Aniciplate scratched moulding and the pee, that's about it. 

@Heath D Wallace operates as a property manager? Just want to make sure I'm understanding correctly