All Forum Posts by: Marcus Yates

Hi All,

I'm coming to the end of year one with my first tenant.  It's gone relatively well with no major issues around late payment or problems with the house.  In fact, we don't talk much at all accept for the occasional text message check-in.  I'd like to keep this tenant, so I'm wondering how to address the following.

- How should I conduct the end of year renewal conversation (it was a 1 year contract)? How far in advance of the maturity date should I start the conversation?

- Should I/how should I approach the topic of a rent increase (@ $1100/mo for a $1600 sqft townhouse, I'm about $100 under top of mrkt my area)? What are the factors in determining/supporting an increase?  

- This time around, I'd like go for a multi-year contract, but I'd also like to push the rate up a bit. From the standpoint of rent, does it make more sense to (1) keep the tenant where she is in exchange for signing a 3 year lease, (2) bump her now but cap the rate for 3 years, (3) or go for another 1 year contract with bumps each year in line with the market? With a $100 spread, I'm not sure it make sense to scare off a good tenant, but I'm not sure what the spread will be in three years.

- Lastly, how do you explain rent increases to tenants (not that I feel the need to justify business decisions, but just curious about approaches others use)?  

Thanks, all for your guidance!

Marcus Yates

Hi all,

New to real estate investing but I'm a huge fan of the BP podcasts! I'm considering my first flip in the Atlanta area and thought I'd try to get some advice. The house is a 4/1 1930's bungalow in the metro Atlanta area located in a popular/heavily hipster populated part of town (inside the perimeter off the proposed belt line, for those familiar with the area). The house is listed for $70K and likely needs that much in repairs (I'll have a better idea once my contractor looks at it this weekend). Our realtor tells us that ARV is around $225K but the property may sit until the spring (to get that price). Between a partner and myself, we have the funds to purchase the property cash, but we'd need financing to renovate. We're both self-employed, and I assume reno loans will be harder to come by. Never worked with an asset based lender before, but I'm wary of borrowing money on my first deal.

Question 1: Assuming a monthly carry cost of around $500, do the numbers make sense?

Question 2:  Does it make more sense to purchase the property cash, or try to finance it with 20 or 30% down and use the balance of cash for reno?

Question 3: What are your thoughts on asset based lending (given that I'm unsure how long the project will take to complete)?