All Forum Posts by: Kathy Henley

@Michael Nichols Build on your experience. If you are doing well, you can see that your rents are covering the expenses and there is money left. Keep up this model. You have plenty of issues to worry about in a multi-unit, but insurance is not one of them: insurance quotes are a phone call away.  If you search for a commercial broker, the broker will present your needs to many interested underwriters.  You will have an answer in a day or two.  There are other expenses of a 4 family that need digging. First off, does the location have a pool of renters? Know your customers.  Are there 4 electrical panels and 4 gas meters?  If not, you will be paying these bills. What is the age of the roof? The seller may not know.  What are the ages of the systems? My inspector lays it our for me so that the repairs or replacements are not a surprise. Practice gathering the facts.

@Dan Z. Search for an insurance broker! They invite everyone to the party.  I invest in St. Louis and use a commercial broker to find the right coverage, as the brick buildings were built around 1904, plus there is a bit of crime.  The underwriter of my first two buildings is Lloyds of London -- who insure anything.  This year's duplex, built in '05, 1905 that is, is underwritten by Cincinnati Specialty Underwriters Insurance Company, of Cincinnati, OH. 

Wedding dress designer/seamstress.  The second recession sent me looking for a new source of income. Found that I am very business minded and landed my current job in commercial property management.  My exit strategy is in play.

@William Watson No need to hurry. Establish a record of success and lenders will like you. I am working on my third purchase.  It is the lender that needed our names on the loan.  Soon we will be moving title, that is changing the name on the county records, to our LP.  I consulted a real estate lawyer in the area where we invest, St. Louis, to find the way the wind blows in the local courts and has never experienced a loan called in because of the title change.  

Welcome!  @James T.  There are so many neighborhoods to explore and choose from in St. Louis!

http://stlouispatina.com/south-st-louis/

The above my favorite blogger walking through the neighbor hoods and photographing the different kinds of brick buildings. It is a great overview.

First off, do you admire the old brick homes of St. Louis city? I do. There are plenty duplexes on the market and young people who want to rent them.  If you can update an older building, there are plenty to choose from.  Or, do you like more upscale neighborhood like Clayton? Or student oriented neighborhood of University City?  Secondly,  spend your weekends going to open houses of all the neighborhoods. Who is you ideal customer (tenant) and where would they want to live?

Thirdly, join one of the many investment clubs and meet people.  Investors love talking about their strategies.  Develop your own strategy.  If you live in one unit and rent the other, the banks will be very agreeable.

When you narrowed down your neighborhood, find an agent who is also an investor and learn the local habits of buyers and sellers.   Plenty to learn on this web site too.

It looks interesting. Separate the commercial from the residential when evaluating.  Are there separate meters? Spread the expenses accordingly.

Have you read the commercial lease? Who pays for the maintenance of the HVAC and system repairs?  Does the commercial tenant pay any portion of parking area sealing or common area maintenance?  These are expenses that deplete the income.  And don't be shy to ask for a profit and loss statement from the restaurant, to see if they are on sound footing. 

Kathy 

Thanks for the help.  It is under contract, with a month-to-month option for the upstairs tenant.

@Peter MacKercher  Thanks for the suggestion of fronting the background check; that sounds sensible.

@Josh LeMasters  It is not turn-key.  I have a terrific property manager who will empty the basement of decades of old lady belongings.  We budgeted for repairs but if the inspection reveals any unknowns, a new decision will be made.  It is our third possible building.

We are negotiating the purchase of a  duplex in St. Louis.  The upstairs tenant doesn't have a lease.  How does one fulfill a lease if there isn't one?

Kathy Henley

Red Bird Properties LLC

@Joe Moore

If the occupants are renters, the lease will tell you the rules.  They get to complete the contract regardless of who owns the building.  You will collect the monthly rent, should you become the owner. If the occupants are the owners, go easy during negotiations; they may be suffering from their unfortunate circumstances.  Who owns the house?  That is who you will be negotiating with.  If it is pre-forclosure, the owners might allow you to talk to the bank with an offer.  

Welcome @Pete Grindel  Go to the area where you want to live and go hunting.  Go to open houses every weekend and learn the neighborhood.  Create some credit history so that you are ready to borrow money when you find a deal. If you could find a job in any aspect of real estate, you will learn while getting paid.  I work in property management.