All Forum Posts by: Michael Wagner

Is selling off after say 3.5 years an option....so you take the one you've owned for 3.5 years and youll have paid it down to 50% LTV or so....sell it and you'll have the cash to buy 2....? I don't know how many you currently have but if its a handful or more, you could get into a pretty good 3-4 year cycle!

three options....keep doing what your doing but dig deeper to find the "better" deals before others do, look in other markets for those types of deals.  Or look in your market at other types of deals (commercial, notes, self storage, etc)

So if you've decided she has to go, you need to give notice as per the terms of your lease and then proceed with eviction for what is known as "holdover" if she isn't out at the end of the 30 day notice.  So send the notice now giving her til the end of February to be out.  IF she's not out on March 1, file a "holdover" eviction and move forward.  

First question...why do you want them out?

Your lease should specify the specifics of termination.  I'm guessing you lease converted to a month to month automatically.  If that is so, you would need to give 30 days written notice (certified letter is best). And then hope they leave at the 30 day mark. If not, you will be looking at an eviction which can take 3 weeks to much longer.  Its tricky to get someone to move when they dont want to. Even though you have the legal right to get them out, if you are getting paid and the property is being kept up reasonably well, "kicking" them out can be risky.  Angry tenants won't always pack up and go quietly.  In addition to eviction, you could be looking at intentional damage on the way out.  Hopefully your section 8 program will serve as leverage over them.  Where we are, section 8 will pull a voucher when tenants get out of line with the terms of the lease.

That being said, if you really want them out you can incentive them to move....maybe a couple hundred bucks (given after they sign a move out agreement and are physically out of the unit with all thier stuff) in exchange for the keys is the most cost effective way to go?  Eviction will cost you at least that plus lost rent while you are getting them out (section 8 wont pay after eviction notice is served)....

But again, first thing to figure out is why you want them out and if its worth it to push...maybe gentle pressure to get them out by spring is best course....? Just some things to think about.

 As long as your property has enough value and you qualify for the refinance, you can refinance regardless of how you paid for the property initially!  I used the HD CC to buy lumber and supplies from HD. I used other credit card balance transfer checks to put cash into my checking account that was then used to pay folks that i hired to do the jobs I couldnt do myself.

Yes, 1099 him.  Pretend he's not your son and treat him like you would any independenct contractor.  That includes making sure that he is truly an IC and not an employee.  Does he do this type (or similar) work for others?  Does he use his own tools (including computer etc) or yours?

I am not an accountant but you will want to speak with one to make sure that he is an IC and find out how to proceed.  You can probably get that info free in an initial consultation or for a modest 1 hr. fee.  Or perhaps a CPA can chime in here and give you something a bit more definitive....

Yes you can and it can be a great short term option. Closing costs will be much less than traditional mortgage but rates will be higher unless you have an aggressive pay down plan or a refinance plan. We actually did just this to build our own house last year. We owned the land outright but only had $150K cash. As full time investors who have no W2 income are good at keeping our taxable income low;), banks werent clamoring to give us a construction loan. Truth is I didnt even seek bank financing but given this was my first ground up residential build, I'm sure I would have been turned down many times. We used the $150K to get the house half done, then tapped Home depot credit line and other 0% credit cards for the remaining 150K we needed. Upon completing construction, we opened a HELOC for $50K. We are paying the heck out of the CC's and transferring any balance that remains at the end of the intro period to the HELOC. And we now just play musical chairs with the debt to keep effective interest rate under 3%. Will have whole house paid off in August of 2018 which will free up the HELOC and CC's for Investing again.

The caveat to this is that there is inherent risk in using short term money if the deal might turn into a long term hold.  I would be up a creek if my 0% CC intro's dried up and I had to pay the 10-20% regular CC rates.  So not a bad idea to have a plan B to tap into as needed.

Why not look for both.? If you find someone who will be a great partner, you dont want to miss out on that relationship just because you haven't found a deal yet.  Also, you don't want to miss out on a property just because you need a partner and havent found one yet.  Find one and then go out and find the match that goes with it.

 My first deal was roughly 80 storage units plus 70 outdoor parking spots.  Only generated$50K in gross revenue when we started but it was only half full and had potential for $100K as it sat.  We've since increased to 170 typical units, 10 covered RV spots with electric and 70 outdoor spots.  Out next 15,000 sq. ft. will add another 100 units or so but will cannibalize the outdoor storage as we are out of space.

Our second facility was 117 units when we bought in 2014.  It is now 200 plus 18 outdoor spots. We will replace the outdoor spots with 25 traditional spots this summer if all goes to plan.

The ability to sustain an onsite manager comes down to finances.  Every market is different so a per unit minimum isnt all that meaningful.  A really expensive (per unit facility) with only 20 garages @ $400 per month might not support a manager in a large market.  But a run of the mill tertiary market facility with 250 units going for $80 on average will easily support a part time manager plus an after hours call center if needed.  With that, its better to look at the facility as a whole as opposed to "per unit" calculations.  Unit mix can also have dramatic effects on per unit calculations as well as type of management required.  5' x 5' units will get more per square foot but will turnover much more frequently than a 10' x 40' unit will and will therefore require more "management.

As for financing,  I think you will find it similar to MF except that up until recently (say 5-10 years ago) it was harde to find lenders with experience in the sector.  Now that the SBA is willing to loan on SS, you will find many more options. Typically, 20% down is pretty easy to come by.  Once a relationship with a bank is developed, 10% down is also doable.  Rates in my area have been around 5% or so in the $250K to $1M range.

 That condo play is AWESOME!  Very clever idea and it sounds like it was a real money maker! I've also heard of it working well for RV storage with high end amenities...seems like movable houses (be it on wheels or waves) and condo storage are a good pair!