All Forum Posts by: Rumen Mladenov

Congratulations! 6 in a year, WOW! How did you get financing for them all? After I reached number 9, banks all but stopped lending to me - the way they calculate DTI here, I am a very high risk apparently even though I have positive cash flow from each and every property I own, and I have a full time job...

I still have my day job, and I cover my living expenses with some of my W2 income. The rest, plus the net income from the rentals, goes back into the business.

I think that cash reserves are way overrated. I have HELOCs, and any free cash is used to pay them down. Should anything major break, I just make a draw on the HELOC. This way I only pay interest when I use the money, not while it is sitting in my checking account waiting for a roof to leak...

@Marcia Maynard I like your policy, but how do you enforce it? I would not want to have to explain to a judge that I am evicting my tenants because they failed to pay me $50 when their guest smoked a cigarette outside...

I allow pets, no additional deposit (any damage caused by pet gets taken out of the regular security deposit).

To those who charge more or outright reject pets. Do you do the same for smokers? Cigarette burns can be just as damaging to carpets as pets, and the smell is not much better either.

The appraisal is based on comparables. If there are a bunch of similar properties with similar additions in the neighborhood that sold in the past 6 months, it will be very accurate. My guess is that there are NO similar properties in the neighborhood, so the appraisal compares apples to oranges. Do not let the appraisal scare you, if you can use it to negotiate a lower price great, but if not just proceed with the original contract. Assuming of course that you have the means to do it.

@Jessica Hinman 

It is possible that they did not have the intention to do it when they signed the lease. Circumstances change. For all you know, the manager may not even know about the day care operation if it is a side job for your tenant.

Do not let emotions cloud your judgment. Getting back at them for lying will not pay your bills, having a tenant who pays rent will.

@Account Closed 

I catch tenants lie all the time, especially in my units with oil furnaces. They know that if they let the tank get completely empty, they may be responsible for a service call. They do it anyway, then fill up the tank and call me to fix it saying it was filled before getting empty. It takes me a few minutes to bleed the lines, and I give them another reminder to fill up BEFORE the heat stops working next time.

Eviction for me is a very last resort. It means turnover with associated cosmetic repairs, vacant weeks, showings, screening... Way easier to bleed the oil lines now and then and look the other side when the payment is made a few days later than promised. Same with the day care - I would rather keep them and make sure they have insurance than evict and take a chance with the next guy, who may trash it worse than a bunch of toddlers ever could.

@Account Closed If you evict all the tenants who lie, you will probably have a 90% vacancy. Tenants LIE, that is a fact of life. If a tenant promises to pay on the 2nd and actually pays on the 4th, would you evict? If they say they filled oil in the tank before the furnace stopped, but you find air in the line indicating that they let it run out completely before filling (despite numerous requests not to do that), would you evict?

+1 for letting them stay. You have a valid concern about liability, but it is easily resolved by making sure they have adequate liability insurance.

If the neighbors keep complaining, just tell them that the activity is not illegal and cannot be grounds for eviction; nothing you can do unless the tenants stop paying rent.

Cash flow and mortgage principal reduction. I do not assume or expect any appreciation, however with a decent cash flow and regular payments I know that at the end of the mortgage term, I will have an asset with positive value ( may be lower, equal to or higher than its current cost, but will never become zero), and no debt. And an accumulated cash flow for X years. Anyone who lived through the crash will tell you that appreciation is not something you want to take for granted... I still owe more on my primary residence than it is worth, and I bought it in 2008 with 20% down.