All Forum Posts by: Aaron Montague

Reach out folks now.  Be they legislators, your mortgage company, or your tenants.  

Here in Mass we have a bill coming forth that has folks freaking out a bit: MA Bill

It forbids evictions and foreclosures essentially.  MA landlords are worried about the same things everyone else is, the ability for tenants to not pay and landlords having no recourse now, or later.  These are highly legitimate worries for everyone.

Personally I have emailed each MA rep (yay email blast programs!) and asked them to consider landlord/owner protections for 12 months beyond the passing of the bill.

I have also asked my mortgage companies to move my mortgages to interest only for the duration of the MA declaration of emergency plus 2 months.  So far I have been told "no" by all of them.  But my hope is that a persistent bug in their ear will start to have an effect.

I do not have any tenants in economic peril, yet.  My plan to keep them paying involves specific numbers that keep my business afloat, even at reduced rents.  I have no intention of letting them slide on the total due, just to try and keep them in place and paying enough to get me through.

Again, please reach out to the people you want action from now with ideas.  

@Anthony Radlick - I've been following this post since the day you put it up.  It looks like you might be the BP Billboard pioneer!!

Call just about any bank for a Preapproval Letter.  They'll send one out that says something to the effect of:

@Harry Morrison is approved to borrow $XXX,XXX dollars

That shows the seller/selling realtor that you have some ability to buy the place should you end up at the negotiating table.

Check out the 70% ARV discussions here on BP to determine if you should even be looking at it.

I do.  

If the tenants and I agree to continue the lease for another 12 months, I agree with your assessment of the security deposit max value.  If I terminate the lease, then create another one with the same set of tenants then I believe you could increase the security deposit to match the new lease's 'first month' amount.

@Theresa Harris I don't agree with your statement on the initial lease security deposit.  If you are rolling over a lease, then I do.  My example terminates the lease on Dec 31 2015 and begins a new lease on Jan 1 2016.  Technically you should probably return the security deposit plus interest and then collect a new security deposit for the 2016 lease.  Same with the last month's rent.

Fortunately if everything is in writing you should be able to skip the steps above by collecting any increases to last month's and a security deposit in Jan 2016.

Originally posted by @Gordon A.:

 Anyone think it could be a good play for hold and rent? 

Drugs and such aside, I'm not sure the numbers are going to work as a rental for you in that area of Boston.

The second place you mentioned doesn't come anywhere close to the 1% rule.  

-Rentometer stats. 

-Craigslist 4+ bedroom places near-ish to the listing.

It might not be a bad house hack place if you play the long game.  I'm fairly sure it will be worth quite a bit more in 5 and 10 years from now.

It does not strike me as a good rental area.

@Aditya Hejib

You need to restate the new security deposit in a new lease, then collect the difference.

Lease 1: Jan 1 2015 - Dec 31 2015 - Rent of $1000, Deposit of $1000.  This lease expires at the end of the day on Dec 31 2015.

Lease 2: Jan 1 2016 - Dec 31 2016 - Rent of $1100, Deposit of $1000.  The first check under this lease, which is NOT a continuation of the 2015 lease, should be for $1200.  $1100 for Jan 2016 rent and $100 that needs to go into the security deposit account.  Make sure you resend all the security deposit account information for the new lease.

MA renters' rights/laws: 

https://www.mass.gov/info-details/security-deposits-and-last-months-rent#overview-

https://www.biggerpockets.com/store/flipping-houses-ultimate <-- Great book for everyone 

@Brandon Shoults I have personally done severa deals with family.  Everyone has benefitted from the deals financially.  The advice I'll echo is "put everything down up front."

The other concept I'll put out there is that investing with family isn't much different than anyone else in terms of the deal.  If one of the partners is expected to personally guarantee the investment, then the other partners aren't going to get nearly the same return as the guarantor. Treat any negotiation with family carefully and stick to the eternal concept of "we/you may lose all your money."

@Robert Hernandez -

1. Chill

2. Make a list.  This list should include everything broken and everything that can help spruce up the place.  You can't always do a ton for the neighborhood but you can be the diamond in the rough.

3. Actually accomplish the things on your list.  Owning rentals can be hard and annoying.  Start doing.

4. Figure out your marketing plan. Craigslist isn't the only way to peddle your vacant apartments.

5. Make sure your tenant screening process is well thought out.  C class neighborhoods are going to attract a specific type of tenant.  Make sure you know who these people are and how to spot trouble BEFORE it becomes your permanent problem.  In the same vein get your eviction process down pat.  Hire a Lawyer to walk you through the process in your city/town if you have to.

6. Breath