All Forum Posts by: Sarah Ottesen

Hello, @Erin Rose!  Bigger pockets has many books that will give you some good guides.  @Chad Carson has written a blog on BP called "7 Absolute Must Read Real Estate Books For Beginning Investors". (https://www.biggerpockets.com/renewsblog/2015/11/13/7-real-estate-books-beginner-investors/)  I think you are going to find some good information in these.  Some of these books are going to give you actual samples of leases.  Some will also give you some guidelines on the importance of having written procedures/qualifications when screening tenants.  Each state will have different laws, but, from my research, the main thing is to have a written set of guidelines when screening tenants and don't stray from it.  

Your real estate agent and real estate attorney will also be able to guide you!

As far as finding renters, we use yard signs, craigslist and local bulletins. 

To evaluate a property, I asked my realtor (who is also an investor) what the norm rental rate per bedroom.  You can also take a look at Craigslist or Zillow or the like to find out what people are asking for currently for rents.

There are laws on late fees too!  You can only charge so much. You will have to check with your attorney (or do some research.)

Good luck!  So exciting!

@Andrew Asencio, what kind of expenses?

Exciting @Tyler Goulden!  Good luck!

When I discussed this with my bank in Iowa, they stated that they would consider the minimum payment if we had a HELOC (even if we had not used the line at the time of the loan application).

Good luck!

Thank you @Thomas S. for your input.  

Andrew, how do calculate 6 months of reserves?

Thanks!

Hi!  I would love some input on Cap Ex for the new-but-have-a-couple-of-properties-under-their-belt investor.  Currently we have two properties/6 units.  We are putting into a savings account a portion of the rents each month for capital expenditures.  We estimated theses amounts using the table from Ben Leybovich's blog, a conversation between Ben and Sergie (https://www.biggerpockets.com/renewsblog/2015/03/03/why-you-cant-make-money-on-30000-houses/).  

My question is, when analyzing deals, how important is it to keep taking out the whole portion for estimated capital expenditures; is there a point in time where you can start to borrow the cap ex reserves from one property to another?  Or maybe build a reserve fund of 6 months of expenses for each property.  I am almost leaning toward the latter because it seems easier to quantify and justify.  That is, if Property A has monthly expenses (i.e. debt service, insurance, taxes, property management, estimated maintenance and cap ex) of $1,000 and Property B has monthly expenses of $1,300, I would save cap ex until I reach $13,800 (($1,000+1,300)*6 months) Then, when I am analyzing a new deal I could take all rents into consideration to take out what will be needed for cap ex on Property C.  When Property C is purchased, my Cap Ex Fund will need to be increased by the estimated monthly payment of Property C * 6 months.  Maybe 6 months isn't the magic number, maybe it should be more.  

What are your thoughts.  

Thanks in advance!

I sent a request!  Thanks!

Thank you for the great insight @Russell Brazil. 

I am going to open this conversation up again.  I was listening to podcast #212 and they were stating how one should consider just going to the seller's agent because they may treat you better than if they would have to split the commission with another agent.  

So I was wondering if it would be wise to contact the seller's agent IF you come along the deal before your own agent contacts you about the deal.  @Russell Brazil would you expound on your original comment, that is, to go through your own agent?

Thanks!

Thank you @Greg H.!