All Forum Posts by: Nancy DeSocio

Hi Mark,

I've only owned our MFR for two months, so take my advice with a grain of salt :) First, just to clarify, properties themselves aren't deemed Section 8...it's the tenant that has the Section 8 voucher. The property would need to pass the housing authority inspection to be sure it meets their requirements for a Section 8 tenant.

We inherited a Section 8 tenant and have had no issues.  She pays on time and follows the same rules as everyone else.  She recently called to ask if she can get a dog, and I told her she needs to sign a pet addendum and pay a $25/month pet fee, and she was so happy that we would allow for it.  Because I'm still inexperienced, I don't know that I'd go out and specifically look for tenants that are on Section 8, but I wouldn't turn them away either, as we would make them follow the same background checks and requirements as any of our tenants.  

Good luck with your search!

Hi Raymond, 

I recently used Hank Richter from Home Pro Inspections for a multi-family in Pawtucket.  He's part of our local RI Real Estate group, and he and his partner were great in performing a thorough job and also pointing out detailed observations during the inspection.  We'll use him again for our next property.

Hi Zachary,

I'm not sure you'll get any responses that are in favor of negative cash flow, but that said, your friend probably wants to make it work in his favor.  If he's made improvements to it, maybe he can bump up rent a bit to offset the cost.  Or if the improvements did increase the value significantly, there might be options to refinance or sell (not sure how your market is, but prices have jumped in the last 2 years in many markets).  In general, I wouldn't suggest following this path for your own investments, but it doesn't sound like a disaster either.

Hi Andy, 

We did this recently.  The seller agreed to let us advertise it, and his agent was incredibly helpful.  We did two group showings prior to closing, and the seller's agent came to unlock the property and then lock it back up when done.  If you can arrange it with the seller and agent, it's a great way to minimize the vacancy in advance.  Good luck!

Originally posted by @John W.:

On rentals in my area, renting out the garage is the difference between it the property being a worthwhile investment. If you get the right people renting, like a business that stores material, its easy money. 9/10 people will want to use it as their personal workshop or to work on their junk cars, avoid them.

 John, what is the concern with those who use it as a workshop or to work on cars?  I'm asking out of ignorance, as I haven't done much research yet (outside of this post) on the details of renting garage space.  

Thanks for the input so far...good points made by everyone!

@Bart H., I hadn't fully considered the legality of it (so thanks for that!) and just got off the phone with my attorney who confirmed it's allowed.  Phew!

Good morning!

We might make an offer on a multi-family property, and it's not a great deal (wait...don't judge me yet!).

What makes the property unique is that there is a separate 6-car garage in which all of the garages are currently rented out (not to the tenants) for an additional monthly income of $725.  I'm intentionally leaving out a lot of the details, because my question is more general. When analyzing a property like this, would you include the garage income in the analysis?

If I run the numbers ultra-conservatively, assuming all garages are vacant with no income from them, the property would make about $350 cash flow monthly with 5.5% cash on cash and 6.5% cap rate (I know, not impressive). But analyzing the property with the garage income seems like a game-changer.

I'm appreciative of any feedback the BP community has to offer...thanks!

@Michael Noto, thanks for pointing that out.  We did get one quote for gravel, and it was much less expensive, but also a shorter term solution since we won't get as many years out of it.  Certainly an option though.

@Joe Splitrock, you make a good point that it pays off long-term.  It's a C-class property in a C-class neighborhood.  I'd say the street has more single-family homes than MF, and for that reason, there is always street parking.  But it's certainly an inconvenience, esp on trash day, snow days, etc, so I see the benefit to having more parking.  I hadn't considered the tax part of it, so thank you!

Thanks for your perspective, @Carlos Tavares.  It's definitely the "investment" aspect of this that is a challenge, as it would be years upon years to recoup that money.  But I agree with your line of thinking and have the same philosophy of wanting to provide tenants the same basic amenities that I would expect!

Thank you all for your input!  We are inclined to leave it as is, and the responses here seem to support that.

@Shaun C., of the two tenants that would get the parking, one is on a lease until next March, so I can't increase his rent until then.  And increasing rent for just one unit won't offset the cost, so as you noted, this might fall into the bucket of maybe never making sense (financially).

@Anthony Thompson, definitely a good point that once it's spent, I can't get it back for something that really is needed...and we definitely will need it for improvements as soon as one unit turns over.  But I still have a couple of dollars to burn to treat you to that coffee for the sound advice :)  

Thanks again to everyone who chimed in...really appreciate your thoughts!