All Forum Posts by: Jon Kelly

@Padam Neopane another way of wording this is, "tenant chooses to vacant instead of accepting rent increase." There's nothing wrong if the tenants don't accept the rent increase. They will have to vacant at the end of their term. Then, you clean and potentially repair the apartment and list it for market rent. 

@Seidu M. Lawal seems like two different things happening. 1) Bank requires an account with them. 2) Bank requires proof of income. 

Having an account with them shouldn't be an issue, although it may be inconvenient if you use another bank. Providing proof of income can be an issue if you don't have a "salary job" or W-2. 

I'd suggest calling other lenders and describing your situation. You may find a smaller local/regional bank willing to lend to you.  

@Dennis Huber I'd follow-up with Google and speak with someone about what is needed to remove the post. If that doesn't work, I'd follow what @Jody Sperling mentioned and politely respond to the review. Something to the effect of: "This individual was never a customer of "XYZ business. They were a tenant of ours and we chose not to renew their lease" DO NOT get into a lengthy story of any/all issues you had with the tenant (nobody cares and it's not related to your remodeling business). 

I'd also suggest incentivizing some of your current customers to post reviews on Google. If people see 5 positive reviews and 1 bad one they will likely ignore the negative review. 

@Mallory Stewart start by the following the wise advice from @Will Fraser and run the numbers on your current home as a rental (you can use the BP calculator). You should also be running numbers on potential properties in your area and see how they compare to the numbers of your existing property. As most will tell you on this site it's always best to let the numbers make the decision for you. 

I'd also look into refinancing your current home. It sounds like you have a lot of equity in the property. If you don't want to sell you can refinance and use that money to go purchase your first BRRR AND rent out your existing property.

@Connie Wang you have no obligation to issue a rent reduction because it didn't impact the use of the apartment. Was the tenant forced to miss work to stay home while the repairs were occurring? If so, I might offer a slight rent reduction. 

Otherwise, I'd politely decline and reiterate you were happy to address all of the repairs she requested. If she didn't request them there would be no inconvenience. 

Try not get into a lengthy back and forth discussion on this. Make your decision and stick with it. 

@X Sun If your unit is up to market standards don't be afraid to bring your rents up with the market. 

@Linda Conrad Two different questions here: 1) Are new properties a good investment? 2) Is this particular property you're analyzing a good investment? 

The answer to the first question is absolutely. These properties are typically priced higher because someone already took the risk and completely rehabbed or built them. One of the main benefits (assuming the builder/contractor did a good job) is your capex and maintenance will be low for many years. 

The answer to the second questions is absolutely not, unless you are 99.99% confident on the appreciation. $69/mo in cash flow and under 2% cash-on-cash return is very low. You also budgeted $0 for maintenance and capex. While these % should be low I would assume at least 5% combined in the first 3-5 years. Everyone has different goals, but I would imagine you can find properties with at least 8% cash-on-cash return in your market. 

@Sylvester Szmejda The terms are decent and I would go forward if you have no other option. However, I would look for other lenders that allow 75-80% LTV. Track record usually isn't a concern for single family homes or small multi-family. Income verification could get tricky, but the smaller/local lenders are usually more flexible.

Is the property in or near East Stroudsburg? Try calling Mauch Chunk Trust. I've used them several times and they do not require a seasoning period. You'll have to ask about their appetite for STRs.  

@Filmon Michael welcome to the exciting world of being a landlord!

If the tenant is paying continue to keep him and let him sort out the drama. If/when they don’t pay then hand them their 30 day notice if they’re month-to-month

@Elizabeth Njuguna Raising to $91k does not mean you get a credit back. You should negotiate for a seller's credit separately. 

I would do 3 things: 

1. Obtain another quote for the sewer replacement from a vendor you choose

2. Ask the seller for a credit in the amount of the cost to replace the sewer (e.g. $5k or higher)

3. Assuming the seller rejects #2, you can offer to split the cost of the repair. You could go $2,500/each. Or, a better option is to increase the purchase price to $91k (meaning the seller receives $3k more than originally agreed upon) AND you ask them for a $6k credit at closing. This is only a $3k net cost to the seller. For you: (a) you get $6k in cash at closing for the repair, (b) you need to come up with an additional $750 at closing (25% of $91k, compared to 25% of $88k), and (c) your monthly mortgage payment will increase SLIGHTLY because you're borrowing more money.