All Forum Posts by: Tej Patel

I am wondering what are some different ways that we can calculate the MPP of a rental property. The formula for a flip is quite straightforward where its MPP= Sales price- Closing costs- profit- rehab cost. Do I consider the profit in a rental formula as my yearly net profit from rental income? Or would I consider the same MPP as a flip and offer the same way I would a flip deal, and then use the cash on cash ROI formula separately?

I have a multifamily house in NJ. My tenants both complained about cockroaches, but the first floor tenant said she also has bed bugs. Knowing this, the cost will be incurred by the landlord. However, should I pay for a treatment throughtout the whole home, or should I allow just treatment in the unit that is exposed to the bed bugs? 

@Cameron Mac Under each township there are zoning requirements for section 8 housing. However each county or city has a PHA ( Public Housing Authority) that used funds from HUD and does its inspections. So in order for your house to be able to accept section 8 you will need to basically fit all the requirements of the inspection process.

An option you can take is to apply for section 8 housing vouchers.

As the administration has halted all evictions for federally backed mortgages, it will loosen your leverage on your tenants. This is going to be a trying time and we will need to get creative to be able to weather this storm. Perhaps you can create a rent deferment plan with your tenants where rents will not be forgiven, rather pay some percentage of monthly rent. This way as we can get more clarity on the economy you can have access to some cash flow as well. Good Luck!

When I am looking for renters and doing the application process, am I required to send letters to the applicants that I am not renting to with a reason. This is going to be my first time renting. I am not sure after the application process how this works.

@Ben Leybovich

Thank you very much for the response. It clears up a lot of confusion. Appreciate the explanation.

@Greg Dickerson

Thank you, that is very helpful!

When doing a cash flow analysis for a multi-family, what does a free cash multiplier entail?

I understand basic Cash on Cash and Cap Rates, but I see Cash Multiplier and don’t quite understand what it means.

What is the best way to get in touch with a contractor? And what is the best way to structure a deal with them? I am curious as to know how investors structure their deals as in payment schedules, and getting a way to calculate if the contractor is overcharging you on the work being done by him.