All Forum Posts by: Josh Gibson

@Mary M. It really doesn’t have any timeframe. Under the special agreements section it says:

“for $50 discount tenant shall cut lawn and rake leaves. $750 rent discounted to $700”

@Matt Devincenzo great point of view, this is why I put it out there. I don’t necessarily want to change the lease just to put it in my name. I was more so wanting to change it to get this “deal/discount” out of it.

Thank you for the heads up on not being able to void it. The lease is up in April 2022. I’m meeting with the tenants tomorrow so hopefully we can get this cleared up just by talking. Than again! Josh

@Dave Poeppelmeier, thank you for your reply. I agree with all of this. Definitely going to have a conversation with him first and go over his current lease with him. I think if he still is unwilling to maintain the grass and leaves then I will try to let him know that he’s in violation of the contract and offer to write up a new contract without lawn maintenance involved with a higher rent. Both of these units are under current rent value by about $200/unit. I am going to try to raise rent in $50 increments per year as long as the current tenants stay in place. That should cover a company to come out for the grass.

Thanks again!

Josh

@Edward Holland that’s some great advice! I think I’m going to have a lite conversation with him and just go over the current lease that him and the last landlord had. If that doesn’t work I guess I will go with plan b and void the current lease due to breach and write up a new one with no lawn maintenance. Then just hire a crew to maintain it. Thanks again for the advice!

Josh

@Theresa Harris I appreciate your response. That is a good idea.

Thank you!

Hello BP, I am closing on a duplex today. We are inheriting two new tenants.

The previous landlord worked out a deal with the tenants on one side of the duplex. Their original lease was $750 a month and somewhere down the line the new deal and updated lease states that they would get a $50 a month discount and the reason for that discount was that the tenant shall cut the grass and rake the leaves. I recently found out this week that the tenant has not cut the grass in three months and he is still only paying $700 a month.

My question is since it states in their lease that he is responsible for cutting the grass and leaves in order to get that $50 a month discount is he technically in violation of the lease? When I take it over today I’m going to have to address this. If he’s not cutting the grass that’s fine but I’m going to need to get the full $750 a month. I guess the reason I need to make sure that he’s in violation of the lease is so that I can cancel that lease because he’s in violation and write up a new lease with our name on it for the $750 a month instead of the $700 a month. Hope that makes sense!

@David M. That’s awesome, thanks again!

@David M. Thank you for your reply. Lots to think about here.

I appreciate your insight, it really puts things in perspective. With our current rates being so low right now it is a little nerve racking going to a 5 year balloon. The bank is giving us a 4% rate and 4.25% on the LOC. with us buying the last house just this year we spent about $25k out of pocket and really didn't want to spend the rest of our cash on this duplex all in 1 year. It was just a deal/opportunity that came to us via friend of the family and we just could pass it up. The LOC we had planned to have paid off within 1 year.

As of right now we have

House 1: 4.125% and matures 2040

House 2: 4.25% and matures 2035

House 3: 3.75% and matures 2051

Your bank perspective really helped me here. I guess I didn't think about it from that point of view. If I only bring them the new duplex and LOC then the rate goes to 4.5% which is really not that big of a deal.

I just always thought that if I can get in good with my local bank and get a strong relationship with them it would be easier in the future to work with them on new financing for future deals. For example additional lines of credit to possibly buy in "cash" and then refinance. I for some reason thought that once you made it to the commercial side then you were on the right track and could open the door to larger deals. 

Also, I was wanting to start to get everything into the LLC name and I was always too afraid to just to just change the title of the houses into the LLC because of the bank clause that could "call the loan due"

We want to grow to about 20 doors or so and just wanted to get system set in place now so we didn't have to go back and fix/change anything. I'm probably thinking about this wayyy too hard though. 

Thanks again for your advice! 

Hello Jamie, I appreciate your input. With everything being in our personal name right now we have an umbrella policy for additional coverage. My goal is to grow to about 20 "doors" between single and multi family properties. 

As of right now we have 

House 1:  4.125% and matures 2040

House 2:  4.25% and matures 2035

House 3: 3.75% and matures 2051

The rate the bank is giving is 4% 5 year balloon for all loans and 4.25% on the LOC. If we only bring them the LOC and the new duplex the rate goes to 4.5% for the new duplex.

The only mortgage loan that would be higher as of now is the newest house (number 3) but we are also shaving off 10 year off the life of the loan. 

I guess my thought process behind all of this is:

number one- the protection with everything being in the LLC.

And two- a relationship with the bank in hopes that future financing will be easier for future deals. 

Thanks again for your your advice!

Josh Gibson