All Forum Posts by: Dave Pate

I now own my first apartment building, a 5 unit bought for cash (1031 exchange). After a rehab my property manager has it 100% occupied. Now I'm thinking bigger and looking around for another apartment building, maybe 10 to 20 units.  Financing is the thing. Putting down 20% on a commercial property (10 to 20 units) is currently beyond my reach.

How can I acquire an apartment building with 10% or less down payment? I have not talked to hard money lenders yet. I have great credit, decent salary, and 3 rental properties with no mortgages. I would appreciate suggestions from you real estate pros!

Smart question! The older I get, the less I care about what I drive. I've had BMW's and love them. But now that I've got a Toyota Tacoma truck paid off, I just can't bring myself to take on a new car/truck payment. 

To answer your question ..... a used Toyota truck would serve you well. 

Remember this. New expensive vehicles are just big-time depreciating assets. You could put that money into a real estate deal instead! An appreciating asset!

Good question. I am also interested in apartments. Just got my first 5-unit apartment rehabbed and rented. It was relatively easy since it was a 1031 exchange and I was able to pay cash. It was really cheap, but it's all cash flow. Now I'm looking for something bigger, say around 20 units. Most lenders want 20% down to finance a commercial property. How do you get into ownership without 20% down? Find an owner and make them an offer with seller financing? What do "hard money" lenders offer?

David, You do need a decent income for financing. There are plenty of loan officers that would quote you numbers and let you know what you may qualify for.  I am a big believer in insurance for accident claims. Consider an umbrella policy too. They are very reasonable and can give you a couple of million dollars of liability coverage. Remember what your insurance deductible is and factor that into your reserves.

Derek, Welcome to the group. You can learn a lot about real estate investing here and it will not cost you a dime. Spend a little time. Read some posts. Podcasts are excellent. There are too many threads about Renatus to start another. You can get a good idea about them by reading the ones with the most replies. I bought into the education. It was not worth it for me. Message me and I'll share more.

You run the risk of losing inherited tenants by making changes right away, or by making them "reapply". If you buy the property, you buy into the existing leases completely. Occupants who are not on the existing lease should provide a completed application at minimum to stay. Be prepared to lose tenants upon new ownership. It happens. I think it is sometimes best to start off with tenants you have selected. Screen. Screen. Screen.

"The act" likely means the local landlord-tenant law. Get a copy and get to know it. 

Check the humidity level in the room. There's an app for that. Normal indoor levels are around 40 to 60%. Try to find the moisture source. Could be roof leak, or plumbing pipe leak, maybe a drain. Is there a unit above you? Good ventilation is also important.  Exhaust fans in bathrooms help. I have installed bath exhaust fans and interlocked them with the light switch. Bleach mixture and then consider painting.

Tony, I agree with Dana. Read up on the top 3 threads here on Renatus. The longest one was quite a circus. Hang out here at BP. Do some searches. You will get more useful information for free.

I would be blunt with her.  Call and tell her that you cannot live up to her high expectations. Remind her that she saw the unit before she rented. Ask her if she wants to move.  I will let a tenant out of their lease early if they are less than desirable. If she does not want to move, she is just taking advantage of your niceness. Stop it. LOL

There is nothing not to like. I've used it in rentals when water lines needed replaced. Used it in my house too.

Absolutely limit the square footage of your rentals. The little extra rent of bigger houses rarely justify the higher cost to remodel/make ready. More appreciation is not seen in my area. I know a local investor that even likes to keep a few 2/1's because of the lower maintenance and likelihood to have a single person (with NO kids) renting. He says "give me a nice 2/1 any day".