All Forum Posts by: Theo Hicks

It varies from manager-to-manager, but a full month's rent is typically. Screen process also varies, but ideally they do a background check and a credit check.

I'm sure you can negotiate in the contract that you handle certain aspects of the tenant leasing process. You will just need to set expectations up front.

Hi Lawrence,

It depends on how the partnership between you and the investors is structured. You would likely need to speak with a securities attorney is the investors are entirely passive. If the investors have another role in the deal, it is a JV.

Interest rate depends on many factors. Could be 2%, could be 12%.

 I would confirm that you can secure an owner-occupied loan with 3rd party funds. If so, based on your explanation, they are debt investors, so I would offer a fixed interest rate with a defined term length.

The screenshot you provided is from a T-12, not a rent roll. Your best bet is to ask the listing broker why the insurance costs vary from MTM

$40K to $60K seems high. $15K to $25k is more realistic. As others have said, I would find a few companies that specializes in boihers and get a few bids. 

Major pro is cash flow from day one. Major con is if the tenant quality is poor and their leases don't end for a while.

As Travis said, if it is a good deal, you should be able to find a partner to help you qualify for the financing.

Mortgage broker. That is who I used for my FHA loan, as well as all subsequent loans.

Hi Daniel,

Property management fees (3% to 10% of collected income, depending on the property size) and reserves ($200 to $300 per unit per year) go into the NOI calculation. CapEx does not.

Hi Mirzet,

I acquired there 4-plexes a few years ago and managed them myself for a year. Yes decision I ever made was placing them under 3rd party management. I had a work from home job with flexible hours at the time so I was able to drive over to the property at the drop of the hat when needed. Is that something you can do? If someone calls with an emergency, can you drop everything and go to the property, or at least quickly find someone who can? If not, I recommend hiring a property management company. 

Rents are based on the rent comps - that is, the rates of comparable units in the surrounding area. Sure, you can use a realtor, but they will take a fee. If you hire a property management company, they can help you determine the fair market rents.