All Forum Posts by: Todd Handriegh

It is one of my rental properties, which is why the rate is higher.  I have 3 rentals, and cashing out could expedite my next purchase...or as stated, just put it in an index fund until the right opportunity comes along.

At the end of the day I just have this nagging feeling that as long as I can make a better return than the rate of interest, it's a win.  Even if it's not as big of a win as I wanted.

If I try and wait until later, rates will get worse, valuations may also get worse, I make $150 less cashflow and lose any potential returns on the investment of that $17k.  I think this is the best lemonade I can make of these lemons.

So I screwed up last year, or at least according to my current strategy.  I refi'd my 30yr mortgage on rental property down to a 15yr, and paid points to get down to 3.5% interest.

Now I'm wishing I pulled cash out so I could put it to use sometime in the near future, especially if the market corrects...but even if it doesn't, having capital is never a bad thing.

Now rates are finally bouncing, which are causing valuations to pull back.  Great timing - NOT.

Anyway, I decided to get ahold of my lender and they are going to give me a break on closing costs, as much as they can really...most of it is not really avoidable.  Looking at about $4k to refi again.  This will actually worsen my interest rate from 3.5% to 4.5%, and increase the term of my loan from 15 years to 30 years.  While initially it was looking like I was going to be able to cash out $35k, a lower than expected appraisal is now going to only allow me to cash out $17k (OUCH).  

 I will go from paying about $40k in interest over 15 years, to $95k in interest over 30 years.  My monthly cashflow will improve by about $150/mo.  

I immediately felt sour about the whole idea.  However, I still ending up talking myself into moving forward.  I mean...at the end of the day, isn't this all about cashflow and liquidity for expansion?  Even if I just took that $17k and stashed it in the S&P500 index for the next 30 years and never bought another rental, at an annual 8% return I'd make $170k, more than covering the additional interest paid.  

Cheap money is cheap money.  Even though it's not much cheap money as I would have liked to have.

And the upfront cost of closing will be significantly offset by pushing back a mortgage payment.

Any advice on whether this still makes sense to pull the trigger is appreciated.  Otherwise I just lose the cost of the appraisal and application fee.

Thanks as always, BP community!

Just signed up for multifamily...investing in my education and future.  Way less expensive than a "guru" mentor and 1000x more value!

Been dealing with a "small" cockroach issue for several months now.  I hired an exterminator immediately as soon as the tenant reported it to me.  I've had probably six follow up treatments.  At first it was just the oriental type, or waterbugs as they are commonly called.  They would only show up when we got lots of rain.

recently though,  the smaller German type showed up.  The ones everyone says are the most pervasive.  I've doubled down with the exterminator, once every couple weeks.  Tenant finds 2 or 3 dead ones, or slow moving ones that have been poisoned.

Its a 2 unit building,  and the other tenant has started to see the Germans show up.  We've treated the entire building pretty thoroughly, minus the basement, because the basement just has too much of the tenants storage clutter down there.  I've had the sewer line scoped to make sure its not broken, we don't have any dry p traps.

I don't want to raid bomb the place because I worry about liability.  But im getting more desperate.  If I have a vacancy anytime soon, how can I rerent it until I'm 100% sure we are roach free?  

This issue keeps me up at night.  I couldn't sleep in my bed if I thought they would be crawling on me.  I don't expect my tenants to do so either.

Great stuff guys.  I'm already making progress with the tone of my dealings with tenants and contractors.

I'm thinking of wearing a different hat when I have to adopt my landlord alter ego, like Walter White/Heisenberg.

I know many of you say that a tiger can't change their stripes but i already feel empowered by you all sharing your perspective and mindset on tenant relationships,  and putting things in context.  I feel confident that i can adopt these more assertive perspectives with enough practice.  Thanks to you all.

Thanks again everyone.  My landlord friend is a great mentor, he pushes me to get out of my comfort zone especially on these issues.  I have made progress.  To those that are urging me to throw in the towel, i appreciate your candor,  but i dont give up that quickly or easily.  Managing ones weaknesses is part of life, and despite my faults i am still extremely profitable.  And i could even argue that during the eviction moratorium when my tenants could have stopped paying without recourse, my relationships with them paid off in spades, whereas others that i know that were hardasses got burned.  Clearly there is a balance to strike.

I am positive that i came to the right place with this issue.

@joe splitrock...thank you.  I wish I could upvote more than once.

I am loving all of this advice, it is truly helpful.  I am going to collect much of your advice and make sheet out of it so i can give myself a pep talk when I'm getting that stomach churning feeling.

Either I will have to rise to the occasion or I have to hire it out.  

I find that its best when I rip the bandaid off and just start the conversation with an email or text that i cant unsend or backpedal on.  Its face to face that is more difficult.  I find myself trying to be easygoing to avoid ruining the relationship and turning a good tenant bad.  I usually spend way too much time strategizing in my head trying to figure out the optimal way to get compliance without ruining the relationship.  Its exhausting.  I need to be more "automated", and take my personal discretion out of it.  Rules should be enforced consistently without me having to battle internally about it.

Hi all

Started landlording in 2018 and I have grown to 3 properties since then.  I have never evicted anyone, or even terminated a lease, despite a few situations that warranted it.  

As you may predict, that is my weakness.  I am having issues confronting tenants on issues and putting my foot down, and the thought of handing someone a termination notice gives me an ulcer.  I fully realize this is the wrong business for a person with too much compassion.  My landlord friend calls it "bleeding heart" syndrome and just shakes his head at me.  He's been in the business 30 years and has seen it all.  He doesn't bat an eye at evicting people for almost any reason.  The way he views people and their issues is quite...desensitized.

I'm looking for any words of wisdom on how to evolve mentally to where I am comfortable doing whats right for my business without losing sleep at night.  What do you tell yourself when you are forced to put your bottom line over someone's ability to put a roof over their heads?  I imagine its the same for most managers that are tasked with terminating employees.  I'm sure they could give me advice as well on how to cope with feeling guilty about this.

I need to learn how to get over this if I am going to be successful.  Appreciate your input.