All Forum Posts by: Michael Breedlove

Hello BP! My wife and I will be closing on our very first property next week. It's a 4 plex in the New Orleans (Metairie/Old Jefferson) area that we will be Owner Occupying. Currently all 4 units are rented. 2 are on month to month leases and 2 are on year long leases.

My questions are 1) What's the best way to handle a Lease Non-Renewal for one of the Month to Month units since we have to occupy the property? In Louisiana, I'm pretty certain I have to provide in writing 30 day lease non-renewal information. 

2) I know there's a difference of opinion on lease terms, but what are your suggestions for lease terms and why...month to month, 3 month, 6 month, 1 year? 

3) 2 out of the 3 remaining units will be Section 8, but I do not plan to continue with the section 8 program once their current leases are up. Any advice for temporarily handling section 8 housing and any advice for non-renewal of those leases as well?

Thanks for the tips!

Chris Mason thanks for the tips. The purchase price is 425k for this 4-plex. Thanks for the info on gifting for down payment. So, we'll use our own money for down payment. If we do end up borrowing some of the inlaws money for any repairs or updates...any suggestions on what type of interest percentages we should agree upon?

Hey BP, 

My wife and I are in the process of potentially making our first real estate investment and purchasing a 4-plex. We will be using a conventional mortgage, putting 5% down, and paying the Mortgage Insurance upfront at closing. Seller has agreed to pay closing costs. My wife's parents have a HELOC on their current house and would are going to let us use/borrow some of it to go towards our upfront expenses at closing and potentially for any updates we want to do at the property. Our plan is to live in the property for a year and then potentially refinance, pull out some of the equity, and reinvest it on another property. We would repay money borrowed with interest to my inlaws and then they have already said they would like to reinvest that again with us.

    Obviously, borrowing money from family has it's pros and cons and we certainly want to do things the right way. My question is, what is a good structure or terms to borrow from family? (I understand that can vary depending on countless variables) What is a fair interest rate to borrow from family? 8%-12%? 

    Thanks in advance for your feedback. We're newbies trying to join the real estate investing game. I've spent the past year trying to learn, gain knowledge, and analyze deals. And we're ready to take the next step forward towards our first deal.

Greg Jeanfreau thanks for the advice! My wife and I are officially under contract on a 4-plex. All four units are currently rented at $1,000/month. Each unit is 3bedroom/2bath and 1,200 square feet. I'll be receiving the current leases soon so that we can review them. I have to do some research on how that process of signing a new lease works whenever there is a new owner. I'm pretty sure we have to honor the current leases. What I'm not sure about is if we can extend the new leases immediately (if tenants are good and if they are willing to) or if we have to wait until the current lease period expires and then potentially extend them for another year. We have been told that two of the units are on month to month leases and the other 2 are on 1 year long leases. We will be moving into one of the units, but I'll probably do a few cosmetic updates to that one unit first. The building itself is only about 12 years old, so it's in great condition. I also have begun to read up on current Louisiana laws regarding Landlording. We are looking to close at the beginning of May which will be good because we will receive the prorated rents for that month. Our plan is to live in the one unit for a year, potentially refinance, and then pull out some of the equity so we can possibly do it again. Any of you have personal recommendations when it comes to Landlording books? I know BP has a list of books they recommend covering a wide variety of real estate topics (I've read several of them and they've been very helpful). Pros and Cons of having year long leases as opposed to having month to month leases? Obviously, locking someone in for a year can be a little bit of a relief financially for a period, but I've heard it is difficult to remove bad tenants on long term leases and can end up costing more money.

Thanks for the tips everyone. We were able to We've put an offer in on a 4plex and are waiting to hear back. Matt M. Nice to meet you man. I'll definitely try to get in touch with you soon.

Great advice. Thanks for commenting.

My wife and I are looking to do our first deal. We are considering a 4-plex. We've never been landlords before. Just looking for any do's and don't's when it comes to owner occupancy landlording. We have young children and safety is always a priority for us of course. So any safety tips and or specific boundaries with tenants to set in place would be helpful. And any other wisdom in regards to first time landlords would be much appreciated! Thanks BP peeps.

Hey BiggerPockets! So, my wife and I are looking to do our first deal. We are in the Metairie, La (New Orleans) area and it seems like everyone else is also in the market for multifamily properties. We've been looking for potentially a duplex, but just aren't seeing any of the numbers work. We're considering looking into a 4-plex. In our area we would be looking at something around 425k-475k. We would do an owner occupancy. Hopefully find one with 3bdrm 2bath/unit for around 1k/month. We would plan to update each unit one at a time and increase rents. My question is....Is it wise for us to be considering a 4plex for our first deal? Any recommendations in regards to first time landlording a 4-plex property while moving our young family into one of the units as well?

Welcome to the forums Howard!

Thanks for the advice Ryan! Do you primarily flip houses on the westbank? What's been your experience with flipping on the eastbank?