All Forum Posts by: Kathy Henley

@Yuki Yu To calm your worries, investigate. Steam heat is cheap and very quiet. Many large college dorms use one boiler for the whole building. It works. Find a boiler service company in you area and talk with them about preventative maintenance. Ask them to evaluate the boiler system at the project property.

@Tracy Hewitt You have plenty of skills and experience. Are the 4 rentals giving you extra income? The goal might be to have enough rental income to replace your W2 income. For us, it took 9 properties for one of us to quit the desk job. It is passive income that gives you more free time. Flipping is a job, one get's paid at the end for the time spent doing it.

Banks like people who have jobs. You would qualify if you don't have too much debt. If you had cash reserves for a 25% down payment for your next income property, the bank would help you own it, the tenants would pay the upkeep and mortgage. Keep listening to podcasts to see the many ways this might happen.

@Marvin Michel Who is it that you want to serve? I started visiting college towns because that is the market that I understood - college students. I found listings that matched my make believe tenant's needs. Each city had a agent willing to show me listings and tell me about the area markets. I studied apartment listings to see area rents, visited their hangouts, talked to property managers. It gave me money figures. I kept my day job for years to build capital and choose the right area for me. 

@Ronald Burns The things that we do when we are in love! When one isn't thinking clearly, one should stay away from signing away things. Best to let someone else negotiate - they are called lawyers. Make an appointment today to find out what can be salvaged.

I went through a similar situ when we divorced. I learned that signatures on loans are real, a commitment that goes beyond a marriage. We traded properties like poker chips but the loans remained in both of our names, regardless of one of us loosing ownership. The future looked dark. Yet, thanks to the shift in the market cycle, I was able to refinance a few and sell one property. It won't be overnight but things will get better. 

@Crystal H. Weston Commercial is all about people. Being urban and walkable are strong requirements, as is parking for everyone else. What do the people like to do when they go out IN YOUR AREA? My area has many successful nail shops, hair cutting places, ice cream places, sub sandwiches, day care and taverns. Vet the commercial tenant as you would a residential tenant: what is their business plan, do they have enough funding for the initial build-out and how many customers do they need to make a profit. Read there plan and assess if the numbers seem possible. Is YOUR LOCATION right to achieve such success. You, as the owner, want a business that can stay in business as long as the term of the lease. Don't overlook the boring insurance agents, tax preparers, tattoo parlors and real estate agents.

@Zachary Toothman Interesting. We were just starting deep discussions at my last job in CA, about medical cannabis tenants. It will be a very special subject. The rules and regs will change as cities face the affects of such businesses. Why not ride the wave?  Read their business plan and vet their funding sources.

Higher rent for a shorter term, yes perhaps. But think creatively. The building upgrades have a value too. If you are not experienced in negotiating a lease, hire someone. The property will absorb the cost but the tenant will be charged over time.

Omit the word 'penalty' for opportunity. 

Lease assignment? Did you sign such a document? Show this to your real estate attorney.

What are the parking requirements from the city for the cannabis tenant? Call the planning and zoning dept.

@Cash Tomlin The seller is not obligated to give you the background reports. Ask nicely. 

At lease renewal time, you could require background checks as a condition of renewing - and your terms for allowing a pet. For now, read the lease and follow all the clauses. If the back yard is messy because of the animals, maybe there is a clause about keeping the common areas clean. Mention that in the notice you post to the tenant, if a clean up is needed. And barking must be curbed since everyone is entitled to the quiet enjoyment of their home (so says our Missouri law.) 

Hi @Zachary Toothman  How did the company buy-out take place? Are they intending to fulfill the current lease? The Leasee cannot change without Landlords approval. The value of the lease would still be owed to the Lessor (property owner.) How much shorter term? Study the numbers and don't loose money, your loan depends on it. They should pay a lease closing fee which covers your staff to negotiate a lease. It might be based on the square footage. Talk to area commercial leasing agents, or come to an agreement on a flat fee due on the day of signing the new rental agreement.

As always, ask for the business plan from the new company. Why do they need more space and will it generate enough money to fund the expansion. What is the status of the leases of the other tenants, or are the other spaces vacant? How will the spaces be rehabbed? The LL would loose diversification but the tenant may be improving the condition of the property at their own expense. Is the property in a location where the upgrades would attract a future tenant?

If the 'new tenants' are in the building without a signed lease with the property, they are trespassing. You have the upper hand. Talk with your real estate attorney. Payment plan for all upgrades must be clear. That's the fair part.

And the parking? You could introduce the 'new tenants' with the owner of the neighboring property, support the tenant at the city council meeting if your input is required, but you cannot speak for the owner of the neighboring property. Do not promise a success, only support. Would the parking be a deal breaker? Explore this early.

@Account Closed Houses can be smelly and it is important that they smell new - when on market. Could it be the furnace ducts? Pay to have the HVAC company clean them. (My 100 year old buildings were once heated with coal. Yuk.) Does it have a basement? Look for a chalky substance on the floor joists that indicate a long exposure to dampness. Investigate they why and eradicate. Hose down basement floor with soap, dry with fans. There are companies that offer this service. You could ask them their technique and hire them, or follow their method yourself. After you complete the new kitchen, paint the entire interior, starting with a quality primer. Where did you put shellac? I am not familiar.

Keep working and it might resolve itself. Wash stained woodwork with vinegar and water, towel dry. Have a new visitor do a sniff test. If it is still off, a few drops of an essential oil on cotton balls stuck, behind staging furniture here and there, will get you through the showings. Lysol lemon cleaner for my Airbnb does wonders and lingers nicely.

@Quin Day  Don't overlook small towns. There are few books that you need to read: 

Duplexes, Triplexes and Quads, by Loftin. This one shows how a couple builds their portfolio. 

The Real Estate Fisherman, by Jay DeCima. This one shows how a guy makes a success of small town investing.