All Forum Posts by: Tiffany Colvert

Most states will require you to have a real estate license for managing other people's properties. Also, there are a lot of financial regulations when it comes to security deposits and rent collections. I recommend starting with licensing and educating yourself on PM laws in your state.  

Depends on your state. At the time we were able to get a state tax credit, equal to 3 percent of the qualified amount of the property. Check with you local housing authority to see what your state may offer in terms of tax incentives. 

I've owned two properties where I have accepted section 8 - the good is that the government pays on time- guaranteed rent. Plus there are tax benefits and you truly help people who need it. The bad... there is additional paperwork and some extra oversight for property maintenance.

The lease will stipulate the length of time a tenant must notify if they will renew or not (90-120 days prior to expiration is common, sometimes longer). With 4 years remaining figuring out if they will renew or not may just be a lot of speculation because so much can happen during that time. Rather than basing your decision on the renewal, base it on whether it is a quality piece of real estate with good cash flow today. In terms of them providing financial,s just write that as a requirement in the PSA. The current owner/broker will make sure they get it. 

Most KFC locations are owned and operated by franchisees, (I've done 2 KFC deals and both were very different). The strength of this lease will fall on 1. Their sales and 2. Their financials. However, ground leases are tricky and don't offer some of the same tax benefits/ deprecation as if you owned the building. Plus, I agree with @Henry Clark that KFC as a brand is not as strong as some others that have recently emerged. Given both factors (ground lease and old brand) I'd probably pass on this opportunity. 

Definitely use a lawyer that specializes in real estate contracts to help you draft a PSA or review other contracts. (note I do commercial and generally, we do not use standardized contracts) If you are buying a SFR or something smaller, an experienced real estate agent could help you with those state-approved contracts, but something more complex should be run by a RE attorney. Now would be a good time to start interviewing them/making friends, but you may not need to formally engage them until you are prepared to submit an offer. Hope that helps- best of luck in your adventures.

Hey Patrick, Dunkin uses a franchise system, so corporate likely won't give you the owner's contact information. However, during your due diligence, you should definitely ask for a tenant interview to feel them out on the renewal, look at their sales and do a complete review of their financials. My experience with Dunkin buildings is that they are often in high traffic, going to work side, desirable locations that can easily be backfilled with corporate credit tenants. I like these kinds of deals and I would say it is worthwhile getting it under contract to check out further. 

Hi Yariel, a commonly used percentage for estimating annual maintenance costs is 1% of the property's value but it can vary depending on the age and condition. It is always a good idea to get an inspection prior to purchase and work with a contractor to estimate any repair/reno costs. Best of luck!

Adding more storage units to a portfolio can increase the NOI, which in turn can increase the property's value and potentially lower the cap rate. I do think investors will ultimately look at specific market conditions and the demand for storage units in your market. If the vacancy is low, I'd say it makes sense and could be a viable option to bundle into a portfolio for greater returns.

I would call the utility company to get past historical usage for your estimates. Then bill in arrears or have the tenant set up those utilities under their name with you as the backup for default in the case of non-payment (this way you get notice and can prevent utility shut-offs).