All Forum Posts by: Patrick Liska

Bigger Pockets used to have an area that had files for different things, forms and stuff that were created by Members but they have gotten rid of that, I am guessing they either had trouble with it or needed more server space. We can not put any attachments in this area either. send me a message and I can send you one if you want, this has move in and move out inspection, below is a picture of one page of it.

Most towns/ States you are allowed up to 4 non related people to rent, so you can rent out 4 bedrooms, 2 family = 8 bedrooms. I have a PM that takes care of mine but we always have the students sign a group lease and the parents always have to co sign. our rental term is from June to May, students graduate in May, so we collect for the full year. as far as doing it yourself, that is up to you if you feel you can handle it.

Refinancing would depend on what rate you would be able to refinance at and if it is even worth it ( closing costs or fees added to amount). I recently refinanced a multi family I had,5 years and the loan was about to switch to a now lending rate plus 1%, so it would have been close to 6%, it would have automatically switched. I called my lender and we "refinanced" the loan into a new loan at 4.5%. Yes you then pay a little more towards interest again and little less towards the principle, but it was not much of a difference, for me any way. 

You would have to check with your bank and negotiate with them any pre payment terms and if there are any if you sell, every bank is going to have there own loan terms and some of them may be negotiable.

If you keep the property and add true value, meaning the appraised value of the property raises based on the work done, then you are adding equity to the building. when you refinance, you would be able to pull the additional equity out up to their loan to value limit, most of the times 80% of the value.

refinancing, refinancing, is a way to pull the equity out of the building to use the money for other things. This tactic also keeps the building in dept as a form of protection, if there is a law suit ( and they can not get to you personally) there is no money in the property for them to go after. they may get some sort of judgement on the building, but by pulling the money out all the time you are getting what you can before anything like that happens.

Let the Contractor and tenant battle it out (this is one reason I use a PM for my properties, let them handle everything). what it will come down to is evidence of what and how much was discarded, how old was it and is it something that depreciates in value ( which is what your tenant will probably end up getting). both the Contractor and tenant should have insurance, but with the Contractor admitting to it, let his insurance company handle it.

There are 2 ways you can get an idea of the CAP RATE, talk to local commercial realtors or hire an appraiser. If you are looking to take equity out, the bank you apply to will send an appraiser to determine the value. To get the best/fast general idea, a realtor would be your best bet

Now I'll try to explain in Laymens terms. Cap Rate is the value of the property determined by the market. you can have 2 identical buildings in 2 separate towns but if one houses c class tenants vs the other one which houses A class tenants, the C class building will generally sell for less because there usually is more tenant turnover and costs associated with it than a building with A class tenants, who tend to stay longer. you can be collecting the same rent, but usually you do not, but the turnover costs and usually more maintenance lowers your NOI in the c class building. you still have costs with the A class property but with less turnovers and maintenance, the income is more steady and reliable. so the higher the CAP RATE the more risk in the property ( C class) and you can not count on consistent numbers. the lower the CAP RATE the more steady and reliable the income will be (A class), so there is more value in owning a property like that.

That all depends on your market,you did not say where this is, what I would do is look online at what area rents are and what they include. if you can find one similar to yours, that will give you an idea of what you can charge. another thing you can do is call a couple of local realtors, either ask them what they would charge or pretend you are looking for a place to rent and want to know what the average cost for an apartment with an attached bath would run in that area.

Have to agree with @Michael Seeker on that. the properties would need to be under each LLC for any kind of protection. forming one llc to run the properties does not afford you any protection. you can claim deduction for property under your personal name using Schedule E of the tax forms, as Michael said, the sole proprietor LLC is considered disregarded and all income and expenses are filed on your personal tax returns anyway, think it is time you found a new, honest CPA.

Tread lightly my friend and try to turn over every stone, have a title co. do a search on the property few hundred bucks now could save you thousands in the long run. this person does not know the bank or how much is left on the loan, does not sound right.

You can see if the bank and the town will negotiate with you, it does not hurt to ask them. You may walk away with a deal from both of them, it will only be beneficial to both of them that the place gets done and they have money coming in. that's probably a losing property as a "Gift" but it's all in the deals you can make with the seller, bank and town. I know the seller wants out but see if you can negotiate him paying for the demolition or any reduced taxes,water,sewer,maintenance bills there may be, that may help your numbers.