All Forum Posts by: Larry K.

12,000 per year (assuming that is right. you might be a bit light on the expenses) on a 250,000 purchase would be an annual return of slightly less than 5%. Does that seem good to you?

I think most here on BP would agree this property would have to be in an outstanding, blue chip, A+ neighborhood to accept those numbers. You'd be in it for the appreciation only on which J Scott already commented.

The concerns that Jim T. describe are why I do not have an LLC. His first hand experience makes it real. It could depend on your area though.

This may help somewhat

1. Your choice. If the debt is manageable I'd keep the cash flow to build up reserves or put into another property.

2. Check your state laws as additional deposit may not be allowed. You could always charge a higher rent. Tenants with pets have a harder time finding places so you might get the premium.

3. Yes the background check is a must. Once that is passed, salary is the key. Their salary should be at least 40x monthly rent. So for you its about 40k.

4. I use my home address for tenants to mail the rent. It is convenient. I was reluctant to do it but it has turned out fine. Could depend on your tenant. You could always open a PO or UPS box.

5. You local papers should have info on how much prices have dropped in your area. Case Shiller is the standard for this data and they track sales of the same properties over time all over the country.

6. Lots of things. All of your operating expenses and travel to start with. An accountant will know for sure.

Best wishes

Go for it. You'll sleep better.

By multi-family do you also mean 2 family?

Anyway, I don't see how multi-family can be a bad thing. As I see it even if money in real estate was not made by going straight into multi-family (cost entry barriers), those who have grown their money eventually put it into multi-family or other commercial.

Nothing new here....just the old Monopoly method of sell 4 houses/buy one hotel.

It is funny you brought this up because I had a tenant who was very late in November but then paid Nov and Dec in the end of Nov so I was thinking about this a lot.

I know the point is you don't want to mess up their Christmas but ask yourself "what are they doing to make your Christmas better?"

If they are on hard times (job, health, etc.) I'd probably let it pass. If they were a tenant giving me a hard time (making up problems about the apartment, not responding, bothering other tenants) I'd probably move forth with the eviction process.

If I am understanding right what you are saying I think your biggest concern is the smell of sewer gas. I don't see any other problems.

I have a 2 family, fully rented, and cash-flowing. Just refied and it appraised for 230k. The refi loan is for 170k. The HELOC on my primary residence with which I bought, renovated, and held still owes about 20k (I wanted the refi to take the HELOC out completely but did not quite make it).

I have some friends who are interested in investing with me (they have money but no time). So I am thinking of arranging with them a 20k loan on the property so I can pay off the HELOC. This would take them to the 83% LTV point.

I am looking at this like an alternative to a CD for them. Their money is not FDIC insured but it is securitized against the property. 5 year CD rates seem to be in the range of 1.5 to 1.75% right now.

What do you think would be a reasonable interest rate to give them for a 5-year term?

Todd, I had these same issues when I started looking. The suburbs wont cash flow...the hood is too scary. You want to find the transitional areas between the hood and the suburbs. You might find your sweet spot there.

BTW, I used to live in Hoboken, great fun city.

Glenn, this is exactly what I did. Bought a 2 family, rehabbed it, put tenants in, refied out with a loan from another bank and took that money and paid back most of the HELOC.