All Forum Posts by: Account Closed

That is a phenomenal story! Congrats @Yolanda Salas! Great increase in value - how long have you held it?

@Chris Harper I've been told by banks that you're expected to live there for a year. 

I've also heard that "you need to plan to live there for a year" with a grin, which tells me that if you plan to live there for a year and move out after 9 months, perhaps you had a change of circumstances, and they likely won't do anything.

Check with the laws in your area, but this actually happened to me on my first property. It was frustrating at the time since I had new tenants moving in just days later. 

I had to file for eviction. In Wisconsin, we can charge 2x rent for the "holdover" period. We can also charge for all added expenses (atty fees, court fees, etc.). Don't go wild with the fees since you probably won't get it back, but I was able to take it out of the security deposit. 

Fortunately, the tenants did move out on the date they promised (after lease end), and before the new tenants moved in. If they didn't move out, I'd have to consult an attorney, but it would probably be along the lines of covering moving costs & hotel costs for the new tenants until I could get the old ones out. I know somebody who had to do that for a tenant once upon a time.

Good luck!

As with 90% of things in real estate, it depends.

In order to partner, you have to have skills and/or knowledge to bring to the table that complement the other person's. If you don't have that, you might have to go solo for a bit. However, once you have your unique contribution, partnering with somebody can help spread out your risk and make the process more enjoyable (so they do things you don't like to do). 

On the other hand, some people like to do it themselves, don't like to split the cash flow, and want to be in charge without consulting somebody else. 

What kind of person are you, and where do you fall in the spectrum of skills/knowledge to contribute?

@William Wilson it depends on what you're trying to do and your personal goals. 

Personally, I would take the refi, and use the $30k to buy another property. The goal would be that it would replace the $135 lower cashflow, but now I have tenants paying down two mortgages, and have two properties which may appreciate, and two properties to expense on my taxes. 

Other folks would rather keep things simple and enjoy the $135 higher cashflow with fewer tenant/repair headaches.

Following up on what Dennis said, depending on the area you're in and the age of the house/mechanicals/roof, your maintenance/capex might be higher. If you have 10% vacancy, it would be $256/mo, not $100. And even though you plan to self-manage, I always budget it in. 

I expect that leaves you with healthy cashflow, and your self-managing is icing on the cake. Looks like a good deal on paper.

Inevitably, there will be hiccups. Your first deal won't make you wealthy with cash, it will help build a wealth of knowledge and experience that you can leverage in your next deal. I'd jump in on this.

Not sure what ARV is for this property in your area, but perhaps this is a BRRRR opportunity, which is even better.

Put them through normal screening. If they meet your criteria, then I would create a lease addendum. Depending on the market, some folks charge additional rent. I've never seen a higher deposit. Look at what others do in your market. The additional rent happens in Madison, WI on the college campus, with a limit of #people per bedroom so that people don't cram too many people into a house. Outside of student housing, I don't see additional rent.

If I were transferring to a PM, I would just begin contacting and interviewing PM's and asking questions about their processes. Tenant screening criteria, fee structure, how they bill for maintenance, how often do they do walkthrough inspections, what their communication cadence is like with the owners, and what reporting you can expect monthly, quarterly, etc. There shouldn't be any regulations requiring you to notify the tenants, but that could also be an interview question for your potential PM's!

Here is a good forum post with some questions: https://www.biggerpockets.com/forums/24/topics/634...

Here is a vendor screening guide from BP: https://www.biggerpockets.com/blog/screening-vendo...

Cheers!

Hey Chela, I've wanted to come, but can't make tonight's meeting - when is the next one?

Hey @Joshua B Lambert - 

Sorry to hear about some spurts of bad luck recently, but keep your head up, and keep solving problems. You'll get through it and the problem solvers are rewarded.

I would focus on the home that needs the LEAST amount of work. Get that one fixed up and get a tenant in there so you have some additional cash flow. If you need money to make that happen, Apply at Home Depot and pick up a few extra hours to get a discount. (However, it may be better to try and find used stuff from a rehabber).

After you get the easiest rehab done, move on to the next most challenging. Do this until you have all of them rehabbed and rented out. However, make sure to screen your tenants. 

Best of luck, and remember, keep your family (kids) close.