All Forum Posts by: Nik Corbaxhi

@Dominick Tanella, condos can work but there are a few different considerations. Just briefly listing them below, search for other posts on condos in here as this question has definitely come up before:

1. Check condo rules to see if renting is allowed and whether there is a cap. If the cap has been reached or close to, you might want to reconsider for your investment purposes. 

2. HOA fees, how much are they and what do they cover.

3. Special assessments and litigations against the condo - are there any major expenses coming (roofs, driveways, windows, furnace...etc)? 

4. Calculate your HOA fees into your monthly expenses as well as account for maintenance and vacancies (10-15% of rental income) when calculating cash flow.

5. Cap rate/CoC return. Everyone has their own way of how aggressive they want to be with their investments, so you will see people agree to disagree on this all the time. Personally, I would like my CoC to be in the 10% or higher in order for the investment to be worth it. This is after PITI, vacancies and maintenance costs.

I hope this helps.

@Devin Radford, consult your lender if you have a mortgage. Although you might create an LLC and do a quit claim deed from your name to your LLC, check with your lender to see if they allow such thing.

By transferring the title form you to the LLC, the mortgage is still your responsibility and the lender does not like the fact that you owe them all of the money but do not have the title of the property in your name. Some lenders require you to pay the mortgage in full once they realize that you have transfer the title of the property into a completely independent entity, such as an LLC. I am not a lawyer but ran into this with my attorney at the last closing that I did.

@Ben Haridim, you are 18 years old, with a loan of $350k to potentially invest. 

I would definitely look for a seasoned, well-experienced individual that has proven to be successful in subject field you are looking to get into, even if it cost you a few thousand dollars of the money that your dad is loaning you. You have no experience whatsoever in the field, and the probability of you loosing it is higher if you don't have a good mentor or adviser, at least in the first couple of deals as you get to really know the ropes. 

Good luck and bring up the idea to your dad. I am sure he will appreciate you being cautious and thinking carefully about not blowing his money away. 

Replace the blinds, if the tenant has been good to you, these blinds are very cheap and they would break just by touching them to even take a peek whats going on outside. If the tenant was a real pain to deal with, sure, you can try to get them back on this one, although it might be not much you are getting back anyways.

@Account Closed, there is nothing wrong with you increasing the security deposit to match the rent, if the rent goes up. Every time a contract ends, think of it as a new start, draw up the new contract with the new price and deposit. It is different if you and the tenant have built a relationship over time and if the increase is non-significant ($25-50), then I would agree with some of the suggestions here. However, if overtime your rent goes from $400 to $800, there is no reason why the new deposit should not be $800. 

Same concept with last month's rent. Ride out the current contract, draw the new contract with the new terms and pricing, including last months rent, and execute. 

if I were to guess, you are not really renewing contracts but just riding it month by month, hence into the current situation where you dont know when and where to increase sec dep./address the last month's rent. 

Hope this helps!

@Roc Pilon, a lot of good advice here. 

If renovations or bathrooms were added illegally, check to make sure that none of those consequences come to  you. While you decide to not tell the city, having a bathroom or rooms without permits will be come an issue when you try to sell it as a 5 bedroom 2 bathroom, when the city only has it as a 3 bedroom 1 bathroom, unless you advertise to sell the property in the future as a 3/1 or whatever it is registered in the city.

That should not happen now in the first place, and as part of the mortgage process, it should be caught and the seller needs to provide Certificate of Occupancy (CO)/Permit for the additions, especially bathrooms.  I would check with the local town/city regulations on this or other property managers in the area to make sure you are covered. 

@Charlie Moore,  I agree with @Account Closed on this one. Do a 1 year contract first, and get to know your tenant. If for whatever reason you and dislike each other, you don't have to wait 2 years to get rid of them.

The biggest puzzle to me is the reason tenant wants to pay 2 years in advance? Have you verified income, background check/criminal check?  It is outside of the norm to pay 24k upfront, so I would say there is a catch. 

Does the tenant intend to pay you cash? Screen the tenant properly, just like you would screen anyone else and do verification of income, ask for bank statements, pay stubs,etc.

@Justin A. Don’t be too greedy to jump on a flip without experience. Learn to walk before you can run. A miss-calculation on your flip can set you back a lot, and then you will really be missing opportunities for quicker returns.

I agree with you up to the point where you interview your tenants via phone before  you show the house. 

However, I am interested to see what your turnout is in the "dont show to anyone unless they have applied". In my experience, 99% of the time does not work. The ones that do go with that process are probably the desperate ones that cannot get housing anywhere else. Think about it, why would a potential renter fill out paperwork and pay for credit/background check if they have not seen the property yet? 

Unless you are in a crazy ratio of demand/supply, this will almost never work. At least for the general listings out there. 

@Will Gaston, great article. While I am no where close to your scale, I do have a few SFH that I rent to students and most of your points I would agree on. The only one that stands out to me is the one that you don't deal with the parents. Maybe because of the number of properties that you have, however in Bridgeport CT, it would be seen as a red flag if the landlord does not want to meet with the parents, especially if they are the ones that are signing those checks on a regular basis.

This can also have to do with the location, but especially for female tenants, I have noticed the parents are very plugged in and they want to know everything about where their kids are staying, who they are dealing with on a regular basis...and so on.