All Forum Posts by: Lucas Miles

@Toni Conway a way to potentially avoid the court/eviction proceedings is to do a "cash for keys". Offer the tenants some amount of money, $500, $1000, whatever to move out of the residence by end of the month or whatever time period you want. If you explain this to the tenant that, you have 2 options. 1. Court proceeding/eviction, eviction will be on your permanent record making it very difficult for you to find a new place to live, you will be charged for our attorney/court fees (depending on your local laws), and any money you owe will be sent to collection agency to collect. or 2. You get paid $500 and move out, we just move on from the situation. Nothing goes on your permanent records, and you get some money to help in finding a new place to live.

This doesn't always work, but it is an option to get them to move out without having to deal with the court systems. We will often do cash for keys in parallel with eviction so they know we are serious about eviction.   

@Zach Alms congrats! Lake Crystal is a nice little market being close to Mankato. What are your plans for the property? Does it need much for rehab? 

@Kosh Vokter I find it hard to believe that the seller doesn't have $500 for dealing with the sheet rock, rather they just don't want to deal with it. I would have a contractor/plumber take a look at the issue, and give a bid for worse case scenario to fix this. This sounds like just a pluming fix, little demo/mold work, and some finish work, doesn't sound very expensive in the grand scheme of things. I'd ask the seller to either fix the issue prior to closing, or ask them for a repair credit at closing based on the quote your contractor/plumber provided. 

@Shirin Namavar reach out to other investors in your area and get recommendations for the lenders they use. Ask the lender what experience lending to real estate investors, and what type of asset classes. Finding a lender that is also an investor is a plus as they understand more of what your doing. 

@Dave Carter myself and a partner recently closed on a portfolio of multifamilies that had low occupancy rates and rents that were significantly below market rate. At closing monthly income was about 20k/month, once stabilized we are estimating 50k/month. We approached this from a once stabilized what will the portfolio be worth (NOI and cap rate), and what will be our rehab budget be to stabilize the portfolio (rehab + operating losses). Then can figure out how much you can pay from there.

Rehab budget is hardest to predict, with that high of vacancy I'd guess there is some major issues at the property. If its listed on the MLS you should be able to walk vacant units before getting anything under contract to get an idea for the property. Depending on your experience, obtaining financing from a bank could be a challenge, many banks (even local portfolio lenders) may not lend on a highly value add project like this. See if you can work with an agent to setup a meeting with the owner to see if there are any seller financing the seller would be interested in.

@Brandon Jacobson still active on the site? I'm a buy/hold investor from Southern MN. 

@Orlando Goodon biggest things I have learned after getting into multifamily, make sure you do quality inspections, especially of expensive items, roof, siding, heating source, sewer inspections, etc. Do everything you can to minimize unexpected surprises, if you find something major you might be able to ask for a seller credit to cover any major issues found. Finding and funding the deal is definitely just the beginning of the battle. Operating and running the project, especially in the first couple years can be challenging. For my first couple deals I didn't budget nearly enough for how much rehab would cost, unless your property is in very good condition the first couple tenant turnovers will cost a minimum of a few thousand $ per apartment. Then there will always be the unknown things that pop up. Dealing with inherited tenants is always interesting, do what you can to learn from the seller on good/challenging tenants. 

Finding a good quality handyman that you can trust is absolutely critical unless you plan on doing everything yourself. I still manage a couple of my properties, takes a lot of time creating systems up front, learning how to be a good manager, etc, but not terrible once you have your systems in place. 

@Sean Anggani This is slightly confusing on exactly what you are trying to explain. An "interest only" loan will not pay down any principal, so you will not pay down any of your debt. The 10 year vs 30 year fixed rate options I'm assuming is what your trying to decide between? Interest rates were at historic lows, and are starting to go up in the upcoming months. Even if you are thinking you might sell in 5-10 years, locking in a historically low interest rate for 30 years is a pretty good feeling. If you decide to keep the property, having that rate lock for another 20+ years you will thank yourself. You can always make additional payments towards the loan if you want to pay down your debt quicker.

@Adri Jusczak congratulations! Sounds like an awesome deal! What's next?

@Tanner Kenneth Jenkins direct mail is probably the easiest. Another option is messaging them through FB (sometimes works), or searching their name/address on google, sometimes you can find a phone number.