All Forum Posts by: Shane H.

This thread is a bit old, however as the first responder suggested I've seen and heard many times the best suggestion is to use Kilz on the subfloor, of course replacing the bad soaked through sections.

On Tile - I've personally used baking soda/water and a scrub brush - was time consuming and hard on the back, however rubbed the baking soda with a bit of water into the grout, let it sit for 2-3 days, then came back and cleaned the baking soda up with water and a final cleaning with another cleaning solution - good as new and no smell.

Guess it would depend on the severity of the problem for the solution.

@Keith John

Do you have much equity in your present home? If so perhaps you could get a HELOC on your primary residence and use that as the downpayment (or part of it) to conserve cash?

Of course, you'd have to make sure the #'s work out.

I didnt see any blinds either -- (have you installed them since the photos were taken?)

Wouldnt be much of an investment (400-500) on blinds.com to get custom fit blinds.  At a minimum for the bedrooms and bathrooms.

I wouldnt trust tenants installing window treatments.  If you have females viewing the property, this is something they are going to notice.

@Eric Campbell

Looks pretty nice -- have you called the utility companies to price out how much the averages are?  Or would there be any pertinent history?

If you wanted to go after college students - I'd think I wouldnt want anymore than 4, maybe 5 people in the same house.  I'd probably throw out a deal of they pay one price and include the utilities...

Ie 4 people - Advertise it at $495 or 545, 595 (whatever you think the market can bear) pp -- however total rent would be $1980 @ the 495 example-- get an air tight lease and emphasize how joint/several liability works and then throw in lawn service (they probably wouldnt mow routinely anyways - will help keep the property looking nicer) -- and build something into the lease that if the utilities exceed a certain amount per month there will be an overage charge.

Pay for electric, gas, water, lawn service and offer a washer dryer (let them buy internet/tv) - if you find a good local mom/pop shop you should be able to get used or rebuilt ones for $400 or less for a set.  Washer/dryer will be a big selling point to the college students.

I'd also change up the ad and show more of the bedrooms - maybe advertise as 4 bdrm 2 bath with an office and bonus room or something like that.  I doubt many people are excited about having a 6 bdrm house -- just a thought.  I'd even mention in the ad you could throw in rental (or include it as a sweetener to land the right tenant) office equipment - find a good quality used desk or cubicle on craigslist and set up one of the rooms as a nice office/study area.   I dont know what is usual and customary for your local market, so obviously you'd need to do your homework to see what will fly and what would get someone excited - however those are some thoughts if you feel the revenue would be higher renting to college students.  Id think selling the rent to them as inclusive of the utilities would be a big selling point.

@Eric Campbell

How many bathrooms is the house?  You mentioned 6 bedroom - what kind of shape is it in, upgrades etc?   Have any photos -- I've got a couple other ideas if you can furnish that info if you really want to go after the college market.

Hello @Eric Campbell

March of this year I finished rehabbing a house that is both close to a very large high paying White collar type of employer and also our local University.  

Had some interest from employees moving to town for the local employer however none wanted to pay the rent I was asking - we didnt have a yard in at the time and the driveway will need to be replaced, however that will happen in the next year or so (driveway is not horrible - just not appealing to the eye) -- however the interior was extremely nice.

Had interest from 3 groups of college students - ended up going with 4 female student athletes -- Ran background/credit checks on them all, naturally none of their incomes supported the rent, however each had to compose an email with the supporting documentation on how  they would afford the rent -- parents emails were included as well (Combo of scholarships, student loans, jobs, parental support etc) -- I had my lease amended by an attorney to be air tight on the joint/several liability that was discussed earlier.  I only accept online payments - include the lawn service and snow removal at my discretion on the driveway.  

I've come to the conclusion that the type of rentals I'd like to maintain - most will not take care of the yard properly so I build the lawn care cost into the rent -- I may end up paying for some of it - however including that is a big selling point to many people.  I'd rather give up a tiny bit of cash flow to have the most qualified tenant(s) in place.

House is a 4 bdrm 3 bath around 2500-3k finished sq feet - dont remember exactly - but sounds possibly similar to yours.

So far so good - all the girls were members of the same sports team and on scholarship -- they stayed in the student dorms the first year of school and state they'd like to stay for 3 years in our house.  We shall see if they stay that long - but do have a year lease in place.

I did throw in a washer/dryer - only cost $400 for a used set as that helped seal the deal on the lease.  

I also cover all utilities and have a separate flat rate utilities charge so they can budget their money easier.  Have it built in to the lease that if it exceeds what I charge them on a monthly basis they would be responsible for the overage -- Charge an additional $375 for gas/water/trash/electric -- I will only provide a rebate if the utilities are less than $325 per mo.

So far so good -- the only mistake I may have made is not having the parents sign as guarantors, hope it doesnt bite me in the butt, however based on all of the information I was provided I was satisfied everything would be paid and on time - so far it has and I spend quite a bit of time trying to analyze someones character on the phone, in person meetings, following directions etc...they passed all of the tests.

Monthly rent is $1495  (actually $1545, however to force online payments - a $50/mo online payment discount is applied so they feel they are getting a "deal" by paying online)

Deposit was $1795 which they are paying installments - They have 2 more installments left.

Then utilities charge of $375 per mo.  Include Lawn/basic snow removal.

You might also try to tailor your advertising to see if you could attract some younger professionals as well...not sure if that would be a viable option where you're at.  I honestly wasnt even planning on renting to college students, however when advertising the house, thats where I attracted quite a bit of interest.  $1495 is a higher end rental in our area - so it was a bit of new niche I was diving into -- had always stayed mid tier before in the $800-$1k range before.

Not sure if any of this helps - but I'd definitely pay a local real estate atty a couple hundred or whatever their fee is to make sure your lease is airtight and when including the joint/several terminology -- make sure to emphasize quite often - either all of the rent is paid or its considered late by everyone and eviction proceedings could/would start on everyone, not just the person who did not pay their share.

No problem @Arthur L. Timmins Jr. I havent completed a lot of deals as I've focused on building equity in what I have, however have completed many more hours in due diligence than i care to count....HA Plan on reworking the financing I have in place myself and establishing a LOC so I can increase my purchasing power.

I'd think US Bank would definitely be who I'd check first on the HELOC since they hold your mortgage -- you'll probably receive the most favorable terms from them and would probably be easiest to set up -- they do not have any branches in Wichita, however should be something you can do online/over the phone. I think others have done a good job of explaining how it works -- basically like a credit card of sorts, or cash advance line.

One thing to keep in mind on the smaller banks per my research is they will typically move faster on a loan, however it can be a bit more difficult to get long term interest rates locked in.  Have to be sure to ask what their terms will be -- ie 5 year fixed, then adjustable - 20 year amortization period, 5 year fixed, then balloon payment or refi would be required etc.

A person I met yesterday advised me of a bank I plan on talking to myself - Stockman bank or Stockyard bank -- something of that nature in Arkansas City -- may be worth a call -- he had received favorable terms on investment property and found they were easy to deal with and they kept his loans in house.

One strategy I plan on using as I look to take on more acquisitions is what was discussed in this Bigger Pockets PODCAST -- Will re-listen to it again, however Jared described having a business plan, and putting together a packet for the lender...I believe his experience would prove to be right that most people dont do this and the bank will take you more seriously if you provide them with this info.

@Arthur L. Timmins Jr.

Who is your present home loan through? Whoever that is will probably be easiest to work with for the HELOC (typically) rather than another bank.

I might differ from the others, however I'd think a HELOC would be the way to go - little fees, and this allows you to use your house as an ATM if you need to act quickly (use cash) to purchase a property, then later if you are holding the property you can go back and get more permanent financing.

If you do a cash out refi on your house, you've probably just increased your house payment again and are locking yourself into mortgage payments again for however long your new mortgage is, plus all of the fees/taxes (mortgage registration tax, loan recording fees, fee for this, fee for that etc)

Maybe I'm a bit more conservative - but probably would make your life a bit easier if you have your house paid off and you are able to throw more of your cash into your RE business later on.  Just another angle to think of.

There are also ways and banks you could go through where you'd probably have little money out of your pocket using a combo of your HELOC (for the down payment) and traditional financing to finance the purchase/reconstruction costs of a new property.

Relianz (now Union State Bank) (Brian Berkley is who I dealt with) would be a local bank that would do that sort of thing.  Maybe Rose Hill bank, CU of America might be someone to check into.

Your Intrust, Fidelity, Commerce, BofA etc are all probably going to be a pain to deal with as far as paperwork and fees and they are also a bit more conservative.  A small bank like Relianz (union state bank) , Equity Bank, Rose Hill Bank should be a little more reactive and able to move a bit quicker if you find a good deal and they aren't needing to underwrite a loan to Fannie/Freddie guidelines.

Hope this helps.

@Chad Skiles

Did you ever get this deal closed?

 2nd this