All Forum Posts by: Tim Delaney

Lease or no lease, you need to follow the timelines that NYS set out from my understanding. So if they moved in May 2022 they have been there over 2 years which means you need to give them 90 days notice of an increase of more than 5% (from my understanding if the increase is less than that then you don't need to give that much notice, but that is not entirely clear). If there are changes you want to make then send your tenants official notice of those changes via in person delivery or certified and regular mail along with a copy of the new lease. If you get that to them before the end of December then the new lease should begin 4/1/2025. To make it even worse, my attorney has advised that the 90 days has to be three full calendar months (in his interpretation) - meaning that the 90 days starts from the 1st of the month following your notice to them.

I would just list as is. If you find it difficult to rent then you can always explore the credit option. Personally I do not like providing appliances for tenants as the repairs and headaches start adding up.

Great points @Corby Goade. Our contractors give us lists of materials that they need/want to do the jobs. Where possible we buy exactly what they ask for. There are situations that they can source better value products from larger suppliers such as HVAC units or plumbing supplies, and we are ok with that. Those "good contractors" usually have the lines of credit or means to pay for supplies up front if they know they will be paid on time and are not desperate for a deposit to go get the supplies.

 Why do you say that? Sounds like you got a property with minimal out of pocket.

You could try posting the room on FB or Craigslist. Or ask the other tenant if they know anyone that would want to move in.

Welcome! You said you are new to real estate investing but you have a background in residential real estate - what does the background consist of?

I don’t have a template for you as my partner handles that end of our deals, but I will share some insight that you will also hear on many podcasts. I like to hire the contractor for labor only - we buy the materials that they need. This reduces their upfront cost so they don’t need a large deposit. Plus I get the buy materials on my CC to get the points. We also set up milestones for larger projects so they know they will get paid certain amounts when certain tasks are done, but always withholding a large chunk for the very end. We also try to incentivize early completion with bonuses and punish late completion with reduced payments, but in reality this often becomes challenging because of things outside the contractor’s control.

Hope this helps you some.

Based on rent of $1500-1600 and mortgage payment of $1700-1800 which doesn’t even include maintenance, management or capex it doesn’t seem to make any sense to keep it as a rental. It does seem to make some sense to keep living there with the help of a roommate paying the mortgage. Could you get another tenant in the third bedroom to really bring down your cost of living? Some info that would be helpful to know would be the value of the house and outstanding mortgage amount.

Welcome Terrence!

On a commercial asset the value is directly based on the NOI (net operating income). So if you are anticipating higher rents and therefore higher income next year you may want to wait till then if you are trying to maximize the amount of the cash out refi. If you don't care about maximizing loan amount then you could start whenever.

I’m surprised that the conventional lenders have given you the ok for this, I’ve never heard that. If there is a due on sale clause in the loan doc then it doesn’t matter what the loan officer told you verbally.

I'm not an attorney, but from my understanding of the loan is still in your name personally a good litigator can pierce the veil and your LLC protection wouldn't amount to much. Since you mention this is your first deal, what other assets do you own that you are trying to protect? It may not be worth using an LLC on your first one.

As for the calculations, just put the numbers in a spreadsheet and figure out which option costs you more. The biggest factor will be how long you plan to own the property or when you think you may refinance. A longer timeline will make paying the extra 2% now more attractive.