All Forum Posts by: Luciano A.

 When starting out in RE can come with challenges. If you want to attract good tenants and give them a break on security deposit use companies like Rhino that will give you protection and allow tenants to move in without having to come up with a security deposit. We will give security payment installments but only with good credit. 

You can offer them 3 days to move out and you will not continue with the eviction or can offer them $500 to move out by Friday. 

It might sound crazy that you will pay someone who isn't paying you rent to move out but by the time you calculate court costs, mortgage, taxes, and insurance for the month or months while they are in there for free will make more sense. 

Also offering cash for keys might reduce the chance of them wanting to destroy your property before moving out. Seen concrete poured into drains, walls busted out, and urine on the carpet. 

Sucks but best to learn now while you are growing your portfolio.

Best of luck 

@David G.

I am wondering how many people who responded with evict her or throw the bike away have any experience in running rentals in a down market. The tenant has been there for 20 years. This means this tenant is a good tenant who apparently pays rent on time. The biggest expense that can be avoided is turnover. If the owner is not looking to do rehabs to the units to increase rent then work with the tenant. Not sure what state you are in but disability cases can come back and bite you and cost you a lot more than a shed or bike rack. I understand trying to set the precedence as the new sheriff but choose your battles wisely. If you are enforcing because others are complaining that is one thing, but if it's because you don't like it then that's something different.

Too many people are quick to want to evict on a rental making $200 a door. The cost of make-readies can eat up a year's worth of cash flow. Find a peaceful resolution. 

Installing a bike shed might be a positive attraction for future prospects looking for a place that has room for their bike. Might be a money generator for future residents to pay to park. 

I believe we are building more than enough apartments and once these all come online and can't get the Class A rents they will start offering discounts, concessions, and amenities that others in B or C cant. So why not keep good tenants and show them respect if they are paying and keeping the place clean.

Landlords/Management Cos sometimes forget this is more of a customer relations game and not I'm the landlord and do as I say. 

Best of luck

@Keoni Manago

Anyone who has done numerous deals over the years has their own stupid tax story. It sucks that you are having to go through with this but as a few like @Russell Brazil and @Mark Cruse have pointed out and I keep telling newbies that real estate is not like stocks that you buy and not have to do much more. If you are going to invest out of state for GODS SACK get a ticket and visit the area, the properties, and check out things. If the person you are talking to has an interest in the deal and will make money from its sale that is not a person you should trust as being on your side. There are some honest people still out there but money can change a person. If you are willing to sign on the dotted line for a mortgage but can't pay to fly out or pay for inspection then you should invest in REITs or as LP in syndication. Too many people are reading books that tell you to buy and place a property management company and you will be making 10x your money. Real estate is not as passive as some are told. No one will manage your money better than you. Hope you get this figured out and your next investment is a home run as you learn from your recent mistakes. 

Best of luck 

@David G.

 Are you planning on not renewing their lease once it comes due? I heard LA is tough and not landlord friendly. I normally have one person on my lease and the rest as occupants. I would not list her at all. If they keep pushing then make sure you have your criteria list of what you look for in prospective tenants and the requirements that she must meet. Don't get sued for making a new list of requirements than the last prospect you let rent from you. 

If her mother is working and has income coming in then I might at least go through the process and thus can have an additional person on the hook if they have good credit and income. That is why I only list the best-able prospect versus everyone over 18 as a leaseholder. 

Best of luck 

@Chris Romero

Not sure where you are but boy I hope you have deep pockets. Before you put an LOI to the seller you might want to visit your local planning department. You will have to confirm your lot is zoned for such a project. You can apply for variance but now we are talking about a project that can take over a year before you even break grown. In some areas, you might be grandfathered and once you demo the back you are no longer allowed to rebuild. There are setbacks that are in place that might not have been when these structures were built. The planning department will be able to help with that. Some cities are starting to all for more density but not sure what city you are in.

  Another thing to consider do you have funds to take down the lot on your own. Many banks will not give great loan terms to new developers who have no track record unless you partner with a builder. Even then not many builders are willing to sign loans with people they haven't done business with. And having a loan on the lot will require you to bring more funds to the table for the build. 

I have a few small multi-family projects currently in different stages of planning and building, ranging from 8 units to 20 units, and things many people don't take under consideration when it comes to commercials it is a different animal. Retention systems, fire sprinkler systems, firewalls, fireproofing, etc.

Your land should be no more than 15-20% of your total project. If you don't have previous build experience I would tackle something smaller and knock that out of the park and then move up until you can take down such a project.

Best of luck 

@Vasundhara Ranjani

Not sure if you are speaking of 5plus units or 2-4 as they each have their own avenues. If you have 2-4 units you can look at DSCR loans but even they will ask for an appraisal. They might, however, do a BPO if they are familiar with this asset class and area but given this market, it's like asking a banker to give you alone without asking for your credit, or income verification.

If your current bank will refi for another 5 years then I would go with them as they might be willing to take a slightly less DSR of 1.25 if you have a relationship with a banker. 

May I ask why you don't want an apprisal?

Best of luck 

@Sara C.

I agree with @Greg Scott. The last few years were rockstar years with rents going up and things getting rented out fast even in slow times. However, given the fear tenants have and holidays, we are getting back to normal times. Late October through January is usually the slowest time to find tenants for many reasons including holidays, and cold weather. Tenants are no longer faced with the oh my god rents are rising. They are hearing in the media how rents are going lower and the economy is falling off the cliff so many are holding put until the new year. 

I would advise looking at the posting you have and the pics you are using. Ask yourself, would I rent this place out? IF not then look into getting better pics, call a few local realtors who have stuff listed in your area and ask them to give you comp. There are many sites you can verify what others are renting with similar sizes, and bedroom counts and see what they have rented for. We all think our units are better than the next guys but you need to be honest with yourself. That extra $50-$75 might be the reason. Every month you don't rent that higher rent will be a wash. Place smart and make the unit stand out with great pics.

Best of luck  

@Naphese G.

As many others pointed out since you are new and haven't bought a property before best to find a buyer's agent. But not all agents are the same. Even some who have been in the business for 100 years still don't know anything about what makes an investment property worth buying. Find an agent who understands investment properties and is also an investor themselves. Have them walk you through the process and advise you as if they were buying the property. They can advise you on home inspectors, estimates on repairs, and how to get the best price. I have broker friends who have yet to buy a rental property because they are in sales and rather make that money versus being a landlord. 

Once you have enough experience you can use it to your advantage. If there are multiple offers you can utilize the seller's agent thus they will be more motivated to work with you to make a cleaner deal.

Spend time on how to analyze deals and what makes a great deal possible. This way you are buying the deal and not having someone tell you it's a good deal.

Education with books, youtube, podcasts,s and just real-life experience is valuable. 

Best of luck 

@Jill Keller

If you are just starting out and don't have millions in net worth don't stress yourself out and do anything but insure you have proper insurance and get an umbrella policy. If you have a mortgage the bank is your partner. If you get sued they won't just hand over the property after all they are in the first position on the lien. Most attornies look at the landlord and their insurance. Insurance when starting out is the easiest way to add protection. Most who create an LLC don't maintain it thus the corporate veil is punctured. Just setting up is just one part of the equation. The advice I have given is what I would have given my younger self who had a bunch of LLCs, Living trusts, land trusts, etc. Not worth it until you start having tons of equity and or have a high net worth. Until then focus on acquiring more rentals and enjoy growing your portfolio.

Best of luck