All Forum Posts by: Alan K Auman

@Chance Housos

Arggghhhh....don't tell me about water heaters going out right after closing! I've already got enough on my mind as it is!! HAHA! In all seriousness though, thanks for the reply and congrats on closing on the 8 houses in one day. That's quite a feat. How did you manage to get 8 at the same time if you don't mind sharing?

@Rodney Kuhl

I'm in Indiana but about an hr SW of Indy. Does your lender only lend locally or would they be willing to do deals in other counties? Don't need anything right now just curious for future reference. It's never a bad idea to have a long list of flexible lenders, ya know..

@Jason Krick

You'll have to ultimately decide for yourself how you're going to play this but I would absolutely make sure your agent was getting at least a grand. personally it sounds like you have one helluva agent who is willing to really work for you so just in good faith I would probably tack on a grand myself so they are walking with $1300 from the deal. It is not easy to find realtors who will REALLY work for investors. They know offers are going to be plenty and won't result in a lot of deals because usually they're being told to lowball. On top of that they know that even if a deal does get made it's going to be a very low commission on their end. A good agent that is willing to treat investors the same as they would a FTHB looking at $300k houses is worth their weight in gold. Pay this agent a fair commission and hold on to that relationship for as long as you can.

@Adam P

Really solid advice and I appreciate your taking the time to respond. A couple other people have also advised letting the smoking continue and I'm glad you guys did because after I thought about it, it really doesn't make sense to put a stop to it now as the damage has indeed already been done in that regard. I had already planned on grandfathering any animals in as it just didn't seem right to me to try to charge for that and I wouldn't ever dream of making someone choose between their home and their pet due to inability to pay the pet deposit and monthly fee. Thanks for your input. You, along with many others, have been a real solid resource as I get closer to having to deal with this situation.

@Nathan W.

Yeah, unless I'm missing something @Account Closedis telling you to do exactly what you've been suggesting throughout this whole thread. Maybe he was saying to use your approach sarcastically?? I'm genuinely kinda lost here...

@Elena Jobson

If this is the first home you've ever bought just try to take a step back and breathe. You said you've only been in the house for a month. Obviously nobody wants to move into a house and have to get busy fixing things right away especially if everything in the house is "new". Absolutely try to get the seller to fix anything that should be fixed but don't go full freak out and think the house is a full blown money pit just yet. Most the things you've mentioned so far have been minor stuff that isn't gonna make or break you. Appliances not hooked up right, guttering not ran correctly...these things are frustrating but hardly a reason to close up shop and sell. The fact you have a warranty definitely helps even if it's $65 a pop to have people out. Long story short...try to relax. Do your best to get the seller to make things right, fix the the stuff that needs fixing as it comes up and before you know it you'll have a perfectly functioning house that you know inside and out in one of the top 5 hottest markets in the country. The only way I would let this stress me out for real is if you start to find major problems like roof issues or foundation issues. Those two things are the only things that really "scare" me when it comes to houses. Everything else is just a headache. Best of luck. 

@Wade Sikkink@Jeff B.

@$650/month for a 1400sf 3b/2ba a block away from the park....the answer is no. They most definitely won't find anything nearly as nice at that price point. We have literal dumps renting in this area in outright bad neighborhoods for $450-$500/month. Now the only caveat is this: they would be able to find an actual house for $650/month if they wanted but it would almost certainly be only 2b/1ba and probably in a more C-ish type neighborhood. Bottom line is that although the increase would be substantial...the minute they started actually looking for comparable properties to their current homes they would see that they will be paying as much or most likely more than what I will be asking. Thanks guys for your input and J. Beard I assure you I wasn't trying to insult you in my previous post. I hope you didn't take my response the wrong way because I really do appreciate everyones opinions on how to approach this. 

@Brandon Battle

I think you're right that I probably won't keep them but as crazy as it sounds I think it will have more to do with the no smoking policy and the deposits required than it will the increase. I don't think they'll be happy about any of it but telling someone who's been smoking in their home for 4-5yrs that that's no longer allowed is not going to be pretty. Thanks for the reply.

@Ross Denman

All that would need done to the units to get them up to the $750/mark would be paint and a deep carpet cleaning. In my area carpet cleaning for both units would probably be around $800-$1000 total and I could paint the entire place myself in a weekend for around $500. I think I may have been a bit unclear in how I worded my previous post. These units are in above average condition as is but I like my properties to be pristine which is why I would want to paint and deep clean the carpets....or possibly pull them up if there's hardwood underneath which is likely given the age of the home. All this said....I'm honestly not even shooting for $750/month. I really like the $650 price point because I could literally rent out both units within a week without doing any updates at all. I probably still would paint and update or clean the floors but I honestly wouldn't even have to and these would still fill very quickly. My question isn't so much SHOULD I raise the rent as much as it is WHEN to raise the rent. There is a very good chance they decide to leave but it won't be because they find a cheaper place to live that has all the amenities this property does. That's for sure. In my area dumps are renting for $450-$500/month. I really like what you said in your last paragraph. That's a very interesting way to look at things and I never really viewed things from that prospective. Thanks a ton for your input!

@Jeff B.

Unfortunately there is no way that only raising rents 10% would make sense in my case. I could easily get $650/month for these units as is, and could almost certainly get $750/month if I put in some new carpet and painted. As I said in a previous reply, I can live with leaving SOME money on the table but a 10% increase in this case would still leave these tenants $150 and $100 under the bottom of FMV which is just too much too leave on the table, even for a very sympathetic landlord like myself. I didn't close on the property with any assumptions, only facts. I know for a fact these units can rent for what I say they can rent for. I have a property I'm currently renting to a great tenant for $650/month that's a 2b/1ba and 400sf smaller in a less desirable neighborhood. The property with rents as is will cash flow around $450/month so even with them staying at their current rents until their lease is up in Oct I'm still going to be ok. But as much as I would like to keep these tenants, this is a business and any business man/woman who claims they would be willing to leave $4200/year in cash flow on the table just to be nice is a business man/woman that I would argue, won't be in business long.