All Forum Posts by: Lisa Kattenhorn

@Nelly R.  It's definitely tough and scary getting started but I found the following things helped me to purchase my first multifamily recently:

1) Figure out exactly what you want and what you can afford. How much work are you willing/able to realistically put in to renovate? What is your budget for a down payment? How many apartments do you want to start with? For example, I told my agent that I wanted 3-4 units under a certain price with cosmetic maintenance needs only, within 30 minutes of my home and rents coming in of at least 1% of the purchase price. Then when he had leads, I ran the numbers on each one specifically using the Rental property calculator to determine if it would work. Those were numbers *I* was comfortable with. Yours may be very different. I may not have gotten the best deal the first time around and I would love to do a BRRR eventually, but I knew that I would be overwhelmed with that as a first time buyer, and this would at least get me in the game.

2) Get a real estate agent who cares.  If you don't have someone who is excited to see you succeed then it won't work.  It doesn't have to be someone with investing experience but at least someone who is excited to see properties with you and talk about numbers with you.  Our agent has become a great friend through this whole process.

3) Sign up for those automatic MLS notifications for the area you are looking in, with the parameters you choose and scour them every day. We looked at a lot of places before deciding on the one we bought.

4) When you find the place, and the numbers work, just do it.  Everything doesn't have to be perfect and you can figure out the details later.  And if it's a mistake, it's a mistake and you fix it however you need to and move on with your life.

I hope that helps.  Keep trying and good luck!!

Thanks everyone!  What a great discussion!  I think I feel more comfortable with keeping things separate if we do decide to go ahead with any work.  It will just make things easier all around.

@Shawn Stone  I did wonder about that too.  It is only a 3 family, so not a commercial property, but still a consideration.  

@Michael Jones  Who would pay workman's comp for a handyman you hire off the internet or Angie's list?  Do you always check to make sure someone who does work for you has comp insurance?   I am not trying to be sarcastic, I am genuinely asking if this is something I should be doing. 

@Jim K.  Thanks for the good luck wishes!  I don't think I said anything about being determined to do this.  In fact, I am pretty convinced to play it safe and not move forward with it, per everyone else's experiences.  I just wanted to sum up the main concerns and thank people for their feedback.

Thank you to everyone for your input.  I appreciate the experiences you guys have shared.

To sum it up, it seems the major concerns include making sure the work gets done before actually paying the person or deducting it from the rent (also something that would need to be done with a regular contractor) and proper relationship maintenance, ie keeping the tenant relationship separate from the contractor relationship so it isn't abused.  Also, there may or may not be some tax implications here too.  I will definitely take this into consideration as we move forward. 

@Mary M.  As for the anti-renter sentiment, I completely agree.  I was a bit surprised by that too as I rented for many years when I was single and that was just what worked for me at the time.  I didn't know where I wanted to end up and the flexibility was nice.  It had nothing to do with my work ethic, skills or level of personal responsibility.  There are many reasons why someone might rent and I don't routinely ask my contractors if they own their own home before letting them do work for me. 

@Kai Van Leuven  Yes, I was worried about that sense of entitlement and suddenly finding lots of jobs that need to be done. 

@Dale Nesmith Thanks for the feedback.  That sounds like a real headache!!  I found some info for a local handyman and may try them out instead.  Thanks!

@Aaron K.  Great!  Thanks so much for the info.

I don't anticipate needing a lot of electrical work done, but some examples would include installing a motion detecting light outside, or installing a GFCI outlet near the bathroom sink, or moving an electrical outlet down a few inches to accomodate the back of a new stove.  They are things I could potentially do myself but would rather let him do if he is willing.  And no, he would not need permits for that work but he has done work for the previous landlord where he did have to pull permits, so I am just saying that he could do that if it was something larger and that he is licensed and has experience.  200 dollars was just a random number I used as an example.  I haven't gotten quotes from other electricians because I don't anticipate needing enough work to make it worthwhile to get a second quote.  I am just referring to small jobs like mentioned above.

@Aaron K.  That is one thing I was considering.  Is there an amount that is legally the cut off for having to issue a 1099?  

Nice job!  I love the finished look.  Good luck renting it out!!

Hi everyone,

I have heard mixed opinions on this topic and I would love some input from all of you.  One of my tenants is a licensed electrician and is willing and able to do some small jobs for me around my new rental property.  Everything will be done to code and with the proper permits.  If he does the work for me, should I let him just pay less in rent that month to cover the balance, or should I handle the rent and the payment for services as completely separate?  I can see the pluses and minuses each way, but it does seem silly for me to hand him 200 dollars so he can turn around and hand it right back to me.  I will definitely get an invoice either way so I have it for tax purposes.  Any thoughts or issues I may not be considering?  Thanks in advance!