All Forum Posts by: Cheryl Butler

This isn't a decision you have to make today. In fact, you can wait a month or two or six. Drive the car and see if it has enough value to you to merit the payments. Maybe you will decide that it does :D  On the other hand, if you decide it's a financial ball and chain, then you will gladly give it up without the advice of anyone else. I would keep it until you are absolutely sure of what you want to do. You may decide you like it so much that you take really good care of it, and wind up driving it for the next ten years. At that point it turns out to be a great purchase after all. 

By the way, thanks for your service in the Navy!

Good for you! I find that usually if you work with people and respect them, they will do the same. I once rented a place way under market because the tenant told me she really couldn't afford any more. Then I sold it to her, and discovered at the closing that her mortgage payment was $400/month higher than the rent I had been charging! I felt betrayed, since she obviously lied about what she could afford, then I realized what a great lesson it was and moved on. If you can't afford my property, then you should find one you can afford. The silver lining for me was the hassle free sale...no agent commission or fixing anything before closing. 

Not familiar with your market, but with $1,300 in monthly rents I wouldn't pay over $100k. Especially if it needs work. Just my two cents.

Your tenants in Unit #1 sound like a good source of entertainment. I'm not sure if you should add a surcharge for helping them out, or if they should charge you a participation fee in their drama. All of life's a stage :-)

I am looking at a duplex that was built in 1958. The carpet all needs replaced, and in one of the rooms it had been pulled back, revealing old crumbling tile (probably 6x6). It occurred to be that due to the age of the home there could be asbestos, and maybe in both units. The entire sf of both units is 1,900 SF. Does anyone know what the worse case scenario would be? This is a bank owned property so I know there is no chance of the seller paying for any work, and the agent has told me there is no property disclosure report since it was a foreclosure. Any words of wisdom are appreciated!

Thanks for the post Roy. I am in contract to purchase a duplex and just found out that the building is being treated for bedbugs. It hadn't occurred to me to ask that the seller escrow money for additional treatments if needed until I read your message. 

I manage commercial office buildings, and we get bedbugs in call centers all the time. We make the tenant pay for the treatment, since regardless of who brought them in it was one of their employees. Multi-family is trickier.

Question: When calculating the 1% or 2%, do you consider the initial capital you have to invest to get it ready to lease, or just the purchase price? Most of the properties I buy require $5,000 - $10,000 to get them ready to rent. 

Because it's fun! I am a commercial real estate asset manager by day, so investing in my own residential rentals is sort of my alter ego. The return is much higher than mutual fund investments, and it's MUCH more interesting. And I love houses :D  Managing other people's assets is a rewarding career, but office space is my job, and homes are where my heart is.

I am looking at a duplex, and according to the leases the landlord pays for the water. The water is billed quarterly, and I am afraid that if there is a leak somewhere I won't know until I receive an enormous water bill. I realize that as the leases roll over I can change the terms so that the tenant pays for the water, but am wondering how high the risk factor is in the meantime. I have already checked with the city, and there isn't a process for checking the readings online or anything, so my only option would be to drop by the property and look at the meter myself. What if a tenant gets ticked off and leaves all the faucets running? I appreciate any input on this subject!

When I am looking at properties to buy, I have noticed that many of the listings say      "Current tenant paying way below market!", like it's a good thing. When I contact the listing agents, their stance is that if you make a few improvements you could easily get a higher rent. Why would I pay top dollar to buy a property if I have to rehab it and get a new tenant? If you want to maintain the value of your properties, you must get a market rent. Just my two cents.