All Forum Posts by: Jeffrey Edwards

I think there a few things you could hit on here.  If you are ok paying what is being asked as far is monthly rent (that would be your worst case scenario), I would view the property and then make an application if you really liked the place.  Now I'm sure that application would come with a fee and that's why I suggested to make sure you are ok with paying what asking rent is because worst case scenario you know going in what rent would be if they are unwilling to negotiate.  Now comes the good part....if you are a well qualified tenant as far as credit score, income, background, etc., use that as leverage to negotiate a lower rent amount.  I think if you don't have the higher qualifications, it's not as easy to negotiate on price.  

As far as how much, it all depends on the market.  You could possibly pull some local comps that have recently been rented, that are similar from Zillow and show them that they are over priced and based on your great qualifications, you think a lower price is justified.  

All in all, it never hurts to ask but you have to have some sort of something to offer in return - a great tenant or comps that justify a lower price. 

 Thank for your reply!

Technically the homeowner still has a vested ownership interest until the redemption period expires.  

You would need to contact a real estate attorney in your area to see what sort of legal tenant rights you have.  I know it's probably not helpful to you at this moment but you need someone with a legal background to advise you and look out for your best interests. 

I've never heard of someone requesting a brand new document be drafted.  I wonder why they would request that.

I would reach out to a title company and see if they have a blank standard form that they would provide to you or draft your own with the help of a real estate attorney. 

A rule of thumb when purchasing is 2%.  When selling you have to take into consideration other fees traditionally paid by the seller such as real estate commissions, transfer tax, etc.

I Would like people's thoughts on how YOU calculate cash flow on a rental property, specifically expenses for repairs & maintenance and CapEx.

The way I do it is I have a cost I've developed that I use for monthly R&M and ALSO I use a property specific CapEx calculation using a spreadsheet that takes into consideration of each CapEx item's cost new, how old it currently is and how much per month you would need to set aside to replace that item. For example: If you have a roof that is 15 years old and has an effective life of 30 years. It cost $4,000 to replace that roof new, I know I would need to set aside $22.22 per month ($4,000/(15 years*12months) or $4,000/180) to recoup the cost to replace that roof when it's effective life is up.

What method do you use and what works for you?

A bit of a side question; have you tried reaching out to any wholesalers in the area you are interested in?  

Although I do not agree with our Governor's decisions regarding evictions during Covid, you will need extremely deep pockets and time.  By the time your case is actually heard, it could be many many months and maybe years from now.  Not worth it in my opinion.  Just my two cents....coming from a fellow investor myself. 

I know this is probably not going to be the answer you are looking for but I would highly recommend that you speak with a real estate attorney and get a proprietary form drafted for you/your company's protections.  Since wholesaling is a form of unlicensed real estate practice in Michigan (albeit not prohibited....yet), it's worth it in my opinion.  Especially if you are not familiar with legal real estate purchase agreements.