All Forum Posts by: Mark Fedorov

Don't forget; if you do the phone interview and the written application and assuming you have a conversation with them as you show it... look for inconsistencies.. did they say they were moving from Florida, but the credit report have the last address not in Florida? (they lied once, they will do it again) Are they moving because the last landlord was bad or dishonest? (Yeah, no) Are they looking at the apartment with a boy/girl friend.. who will definitely not be living there? (see where they live now)..best bet is to call the employer and the current landlord.

Also, I differ from @Luke H. in one way, never rent to people who need the apartment next week. If they waited for the last week of their lease to find a new place, that is a whole lot of risk to take. If I have an opening on June 1st, I will show it in Mid-April, giving the tenant enough time to make a decision and being able to give the old landlord 30 day notice. I have found that the people who want to move quick are trying to run from something, and they will run from you,

My $0.02:    I have a different approach. I know I am responsible for the mailboxes in my property, however I also know that tampering with mail is a federal offence.  So I give the keys to the tenant and do not keep a copy. I have in their lease that they have the only key for the mail box and that replacement will cost $50 (I have my maintenance guy drill it out and install the $8 lock.) That way 1) you can NEVER be blamed for missing mail 2) if they lose the key, it is not that they yell at you for another key, they ask you politely to change it out. 

As far as packages go, I have seen lock boxes that the mailman can put packages in and that anyone in the building can open, but you can never buy a box big enough to handle any Amazon box, and Amazon/ups will always refund the package if it was stolen.

You can not. If they happen to have a US SS#, it will have no history, and if they leave college early, well they are probably going back home and will not care if you ding their credit report with a eviction judgement.

The best strategy that I found is that you have them pay a semester in advance. That is (probably) the same payment policy that the dorms have, so just make sure you are priced below the dorms. Other landlords may want to take the risk, so you may loose the tenant, but if you don't want risk you have to make some sacrifices.

Another possibility is that if they have a relative who is a US citizen to counter-sign the lease, but that is definitely more risky.

I do not think it is a good place, since the laws surrounding tax liens are complex and they differ from town to town. You will need a lawyer to navigate how to persue problem building owners, and that will trim away a bit of your profit. 

You should really talk to the tax collector or a lawyer familiar with it so you will know what to do if everything goes wrong.

It is possible for you do set this up, do the work for a few years and have her back out on you. It is also possible that you will F*up her building, scare away the tenants and run away and she will have her building in shambles.

I have never seen two parties get over those two possibilities.

The only way I could see that work, theoretically, is that, you offer her a refundable "Put option" for the building which expires in like 3 or 5 years.. so you give her like 1% of the building value, she keeps that and gives you a contract that will sell the property to you in X number of years for $Y. .... you figure out the X and the Y. If you don't buy the building during that time period, she keeps the money and is free to sell to someone else. 

Simultaneously, you sign a management contract with her to manage the building, that is revocable with 30 days notice, structured it so that she gets enough money to pay for mortgage, taxes, insurance (and probably water & sewer, since not paying that would put a lien on her property) and some cash every month. 

You run her property, you take most of the profits, you spend the maintenance and improvement dollars, you see all the gains from your work, since she is getting a fixed amount of cash. She can still kick you out if you can't handle it, you can walk away and only loose the 1%.

However, that still is a lot of trust to spread around.

Yes, you will qualify for the capital gains exemption. You will also have taxable income in the form of mortgage interest to declare.

If you are going down this path for the first time, have the buyer agree to pay your lawyer and recording fees for the note.

New York city is like San Fran, certain area/buildings have rent control. The process of evicting in a rent control building, in short, is almost impossible. The process of evicting in non-rent control building will depend on the area. I recall that (at least 8 years ago) there was still the law that you ca not evict in the winter month (Oct-March), not sure if that is still the case.

This is so specific, you need to ask a Real Estate lawyer that is in the borough. Rent control is such a thorny item, you want to make sure you have the correct answer, otherwise you are screwed.

Most banks will be looking at 130% of just the loan payment. 

Anyway, by reducing your interest rate, and bumping up rents 2-3% every year, you will find your next loan application will be easier because you will be actually making cash every month.

Keep in mind the 130% factor is with the NEW mortgage. that 7% is high, with a lower interest rate, your payments become lower and you will see some cash every month.

A re-fi for a investment property is more difficult, they might want to see your schedule E's for the last two years. If your cash out of the building is 1.3 times the mortgage payment, you should be fine (that is what they call the Cash to Debt ratio), assuming that you own this in your name or you co-sign the note with the owning LLC, your income will sweeten the pot for the bank, if you have a ratio of 1.3 or above and the bank says no to an 75% LTV ratio, go to another bank.