All Forum Posts by: Michael Dumler

@Ronald Pryce a lease renewal is essentially a new agreement bewteen you and the tenant. Therefore, you can change terms of the original lease to include an additional security deposit. Check your state laws, usually there is a limit on the amount that you can charge for a security deposit. 

@Oscar Catalan income, credit score, DTI ratio, total assets/downpayment are all factors that a lender will dissect when determining if you qualify for a loan approval. Yes, majority of the underwriting is based on income, but one potential way around this caveat is by having a mortage co-signer. In your case, the co-signer will be added to the mortgage and their income and credit score will be used as security against the loan.

If you're fortunate to have this option, I would speak to as many lenders as possible to determine the best financing avenue for you and your potential co-signer. Don't screw over your co-signer, as they will be just as reliable if a payment is missed haha

@Nader Hachem personally, my general rule is to set aside 5k as a reserve fund for each investment property. CapEx is a variable expense so, it's hard to pinpoint an exact percentage. I've heard analysis of anywhere from 5-20% when running the numbers. At the end of the day, it depends on the deal. Usually, it's easier to narrow down and determine CapEx when the property is inspected during due diligence. After recieving a report, this will give you a better idea of what to set CapEx at. If the water heater, HVAC, furnace, or roof are at the end of their life expectancy, be more conservative when analyzing a potential deal.

@Tim Clark CAP rate is simply a primary metric to forecast the ROI of a property (NOI/market value). A real estate agent or PM should be able to provide lease comparables (rent), for you to use to analyze a potential deal and determine the CAP rate. Generally, the higher the CAP rate, the riskier the investment. A higher CAP rate means your assest (property value) price is low. Depnds on the individual, but I find most investors like to see a cap rate of 8% or higher. Those who might not tolerate risk, will want to see a cap rate of 4-6%.

@Anthony Surach when analyzing a potential deal, run the numbers for both a fix/flip and fix/rent. Many HML have different financing criteria and guidelines. Obviously, you are borrowing at a higher cost and lower LTV ratio so, be aware. Hard money loans are time sensitive. If your strategy is to fix/rent, plan to refinance the property in a timely manner to pay back your HML. Most investors have built their wealth from buying and holding, otherwise, you get trapt in the system of flipping over and over again to fund the next deal. I agree, flipping can be a great way to build capital, but at the end of the day you want to generate passive income through rentals (dependent on your goals). All the best.

@Connie Wang seems as if she is trying to take advantage of the situation. First requesting multiple aesthetic repairs and now a rent reduction. I would refer back to the lease and adamantly confirm rent reduction is doubtful. Note that all of her requests were completed in a timely manner and scheduled accordingly to prevent inconvenience. 

@Nina Ning does the lease address tenant payment of utilities or is this merely a verbal agreement? Does the lease include a clause about unpaid utilities? It should be clearly expressed/defined, "tenant is to register and pay for x utilities." If not, you may be in a tight situation. I would send another email or phone call informing her that she is in breach of the lease if she continues non-payment. If the water bill is still under your name, unfortunately, you are still responsible for those payments. If the situation progresses, sadly, you may have to take her to small claims court, which is just a hassle for everyone. Lastly, inquire about your local landlord/tenant laws for more guidance. Hope this helps. 

@Troy Thomas welcome to the BP community. The Atlanta real estate market is hot right now! To be frank, the multifamily space is extremely competitive right now. As far as I've seen, most on market deals have been receiving 10+ offers and usuaully well over asking. I'd recommned that if you do decide to pursue multifamily, it's best to source your deals off market. Get creative, cold call, direct mail, SEO, let everyone know you're looking for deals, etc. If you decide to pursue SFH deals, I find it essential to get creative when searching for investment properties. Look for deals that have an in-law suite or a partially finished basement that can be converted into a seperate unit. Most investors will glance over such properites, not realizing their full potential.

@Tyson Thurman as you mentioned, working with a buyer's agent cost you nonthing so, why not take advantage? Of course, perfrom your due diligence. Make sure whoever you do decide to work with is credible and well versed in the industry. Often times, if you find a great OOS agent, they'll be able to assist you in developing the rest of your core four (lender, contractor, inspector, pm, clossing attorney, etc). As far as submitting an offer OOS, it's all perfomed through the purchase and sale agreement. Most offers will also require you to submit your pre approval as well, unless you're all cash. All the best! 

@Sam Collins if you're not already house hacking, I highly recommend. In my opinion, house hacking is the way to go to kick off your real estate investment journey. I encourage you to link up with a real estate agent that has either house hacked before or regularly helps clients identify house hack properties. I find it essential to get creative when searching for investment properties. Look for deals that have an in-law suite or a partially finished basement that can be converted into a seperate unit. Most investors will glance over such properites, not realizing their full potential. Most importantly, get specific with your criteria. Pin down your target market, select your niche, identify your price point, then, repeat your strategy again and again. Best of luck!