All Forum Posts by: Jonathan H.

@ Roy

Thank you for the help with clarifying that. Have you made any special modifications to your lease agreements for tenants (due to the "rooming house" setup) or do you just use a typical lease with a one month term? If you have made modifications, would you mind sharing some examples?

@Thomas

I did not know that. We'll be avoiding terms of less than 30 days for those tax ramifications and overall simplicity purposes. We'd rather have somewhat steady tenants for terms ranging from 1-6 months starting out. If we have some high quality tenants we may offer longer terms if they inquire about them. However, If we do this, we will have a rent modifier allowing rent increases on a yearly basis to cover for inflation.

@ Roy

Sorry for the lack of clarification earlier, it will be a a "rooming house".

Thank you for the link to the previous discussion thread, I will read over it in detail tonight to get a better understanding of the subject. I'm sure it will provide some much needed insight and helpful techniques.

That is basically how we had assumed the renting process would go. We intended to get a guarantor signature to help cover the loan. Glad you mentioned the student loans, bursaries/scholarships/research grants, savings, etc. though, we we're just taking "actual income" into consideration. Screening for college students in particular is a new learning experience for us in which we have a lot to learn as we continue from here on out.

I'll definitely be brushing up on the Residential Tenancies Act over the next few days making sure I understand all aspects of it.

Thank you for the continued extension of help, I'm sure we'll take you up on that as situations arise - if you don't mind. It will help ease our minds having someone with previous experience to consult with when we need advice.

Our intention is to rent on a semester basis to students, possibly longer terms for those who are deemed "good tenants" in the first 6 months or 1 year "trial period". Finding renters will not be an issue due to extremely high demand and proximity to the college, its just a process of weeding out the bad tenants. We're just trying to find someone with some previous experience doing this to help us better understand the process and leasing paperwork. A lot of the typical guidelines for screening college students do not apply since many of them are full time students or only part time workers. Very few students will actually meet the common "renter requirements" often emphasized here on BP.

My partner and I recently acquired a property very close to a local college and were wondering if anyone had an example lease agreement for a boarding room style house (on a room by room basis)?

Also, any tips for screening college students would be greatly appreciated. Many of the "rules of thumb" such as rent must equal 3x times monthly income is hard to come by with college students. We're currently considering the idea of requiring cosigners (such as parents or other relatives) to cover the rent if unpaid. We have also considered the idea of implementing money order/online banking "erentpayment.com" only stipulations to guarantee prompt payment - if not received within 3 days (plus late fees) we will evict immediately to inform other renters of our strict "No-BS Policy".

I am in no means a professional REI, but I do have previous experience writing and reviewing business plans from currently/previously owned businesses and college. I'll glance over it this week if you feel like you may need some general advice. If not, no hard feelings, just trying to help out...

Is the process really as simple as:

Quit-claim from LLC to personal name > refinance > leave old LLC insurance policy on until finding new personal insurance with umbrella policy > cancel LLC insurance > Quit-claim back to LLC afterwards (and just pray "due on sale" clause doesn't hit)?

I feel like I'm over simplifying and over looking steps here. Would love to hear from anyone that has any experience with this process as to what else to expect.

Still looking for suggestions/interpretations on the question above referring to the quit-claim process... Thanks

Recently read a couple of posts on another link (https://www.biggerpockets.com/forums/49/topics/92129-refinancing-a-rental-in-an-llc) in which George Ramsay referred to possibly quit-claiming the properties into a personal name, refinancing and re-insuring, and then quit-claiming back to the LLC. Would love to be able to lock in a 3.5% 30 year fixed term. Would this be possible in our situation (3 buildings/units with separate 911 addresses on one plot of land)? I'm not very familiar with property ownership transfer policies and would hate to trigger the "due on sale" clause.

If it is possible, could someone more experienced please help describe the process and the best way to go about doing it? Can someone go into more detail after the property is quit-claimed back to the LLC... How does the individual pay a mortgage and insurance on a property that they personally no longer own? Obviously I'm missing a few steps here, so any clarifications are greatly appreciated.

Still looking to discuss if anyone else has any input. As previously stated, all help is greatly appreciated.

@ David

Thank you for the information on typical Fannie and HUD loans.

The property is one plot of land with three seperate buildings (3 seperate 911 addresses), thus cannot be ran as a conventional mortgage. Even if we intended to "move in" and live in one of the buildings for a short period of time and use it as our primary residence, we couldn't bundle the other two in with it. Since we are converting the large brick garage / extra building to extra units, our intended purpose as commercial rentals would be obvious. I'm open to suggestions though on how to do this another way if I'm overlooking something, I would love to have a 30 year 3.5% fixed rate.

@ Roy

Thanks for the input, was thinking that would probably be the case in this situation.

@ Joel

Ya, I have a basic knowledge of the the lending policies and how the "cost to borrow" impacts the loans. The best offer I have found so far was the one I mentioned above, 20 year ARM, 5 years fixed at a 5% rate. I found this one by calling local banks in the surrounding areas. We're considering taking it due to the low amount of options and just paying it off during the 5 year fixed term. The cash flow will be sufficient to pay it off in that term even after accounting for the other expenses (vacancy, repairs, insurance, etc). Was just trying to find a way to maximize cash flow to re-invest, but we do not want to leave ourselves open to major rate adjustments. Any suggestions?

Thanks for the responses guys, appreciate the help.