All Forum Posts by: Account Closed

I inherited an older couple tenants long time ago. The lease was supposed to end on July 31st. I gave them a move-out notice 9-months before the lease agreement end. I told them that they can break the lease anytime without any penalties as soon as they find a new place. After I gave them the move-out notice, it took them 7.5 months to look for a new place. They moved out on mid-June. I was happy. ==== Even the lease won't end until February 2018, I would suggest you give them a move-out letter immediately, that you won't renew the lease in February 2018, and give them the option to break the lease anytime now without any penalties. They may start look for new place since they know you won't renew their lease.

Using the month-to-month lease under the seller and the tenant's names, once the escrow is closed, yes, you can give the tenants 30-days move-out notice. Without any lease, you may need to hire an attorney to get them out, hiring attorney will cost you much more money. I would definitely request the seller to give me a copy of the lease as a contingency to close the escrow unless it is a very good deal, then I don't mind spending extra money to get the tenants out after close of escrow.

I would have the seller sign a month-to-month lease with them, then give a copy of the lease to you before close of escrow. The lease prove they are tenants, so you can take the lease to court to evict them in case they refuse to pay rent to you. Otherwise, there is a chance that the tenants become squatters. A bigger problem without a month-to-month lease.

If the seller post it on Craigslist, most likely, the seller want to save the realtor commission. If you can write the purchase agreement yourself or have the seller write the purchase agreement for you, maybe you are able to save additional 2.5% discount by not using a realtor. If you use a realtor, the seller need to pay 2.5% commission to your realtor, the seller will make the sale price be 2.5% higher, which means you are the one who is paying for the 2.5% commission to your realtor. But if you are not familiar with the purchase contact at all, it is worth to pay 2.5% commission to hire a realtor help you through the process.

At the very beginning long time ago.  I had property manager before.  

Using property manager may have higher vacancies, because property manager would take their time to look for the next new tenant.  Property manager would not work as hard as the landlords.  

Property manager would wait for the property to be vacant first, then list it for rent when it is vacant, then look for a new tenant, it may create one month vacancy.  

If landlord manage the properties themselves, once the old tenant give a 30-days move-out notice to the landlord, I would list it for rent online immediately, schedule showings before the old tenant move-out.  It is harder to schedule showings while the property is occupied; however, it is worth the hard working.  Because it can shorten the vacany period. 

That is not a small multifamly. 

It is the average cap rate of my portfolio consists a mixtures of SFR, townhomes, and condo.

After each puchase, I fixed up, inspected and replaced all old plumbling by new parts (e.g. shower cartridges, spout, faucets, chalking, all types of angle valves - toilet valve, bathsink valve, kitchen valve, washer valve-, water heater, plus others etc.) for all rentals.  Almost maintenance free because I did most of the maintenance at the beginning of the purchase.  

On a new purchase, I am wiling to spend money replacing an old part even though it still work fine.  

So less headache later on.  

I managed all properties by myself, no manangement fee.  

I have been working hard, have showings that fit both old tenants and new tenants' schedule.  

98% of the time, I am able to find a new tenant move-in immediately after the old tenant move-out.  

For example, old tenant move-out on July 31.  New tenant move-in on August 1. 

Almost zero vacancies.  

Since SFR/townhomes/condo are apple/orange/banana, it is hard to have a fair average cash flow on these different animals.

But my portfolio total cash flow can provide me an income that is more than my last W-2. 

I'm happy working 100% full-time managing the portfolio myself.  

Rental property in class B area.

Current cap rate is 5.8%. 

These are not the actual numbers, but is the actual percentage and actual ratio:

I invested $x.xx (say invested $59,000).  

The $59,000 equality has grown to $100,000.  (I have made 69% appreciation so far.)

Let say my NOI is $5,800 per year.

So my current cap rate is 5.8%.  

Does it sound ok in class B area? or is the cap rate a little bit too low?

Each single entity can have maximum of 10 loans. If you and your wife file tax together, both of you are considered "one entity". If you and your wife owe any property jointly, it is hard to separate the financial from you and your wife. The only way that, husband can get 10 loans and wife get another 10 loans, if and only if both wife and husband are financial independent for their assets include both tax return and all properties. A joint title on any property, it would make the lender to treat both people be "one entity" instead of "two entity". Credit report is still needed to be satisfied for part of the loan requirements, like credit score. What that means is, you and your wife need to separate all the accounts under your individual names for at least two years before you apply maximum of 20 loans in total. Hope it helps answer your questions.

Usually, the city has a better cap rate on SFR than multi-family are NOT the big city like San Francisco or New York. Those city usually happen in the smaller city.

This was a question to me for a while. After reading more articles, comments from investors who have done both side of SFR and multi-family. Their conclusion is, all city are different. In some city, multi-family is better. In some city, SFR is better. There are investors found better cap rate on SFR than multi-family in their city. Numbers is the key. To determine which one is better in your city, run the numbers on both SFR and multi-family in your city, the numbers will give you the answer.