All Forum Posts by: Alecia Loveless

@Janice H. Hi Janice, I’ve bought about 10 properties over the past 5 years all with tenants in place.

I’ve only had one building where this ended up not being a great situation. It was a duplex and the tenants were related to each other. After the first month owning it they always paid late on both units. It finally got so bad that it would be the 27th of the month before I could get the rent from one side.

I ended up having to sell the property due to a maintenance issue I couldn’t resolve. It needed a fire escape to the 3rd floor and I didn’t feel comfortable holding onto it knowing there was a safety risk. I did disclose that the tenants typically paid late but that they always paid by the end of the month.

Personally when I buy a building I still prefer to have tenants in place. Although it is not typically a loan requirement with the lender I use. They will still calculate the DTI ratio based upon estimated rents.

@Colin Brown Simply get an umbrella policy to cover the liability of holding the property in your own name.

@Michael Zagorsky You can get into a lot of deals with $175K as a down payment. Depending on the market many would not necessarily be low-end properties. If you bought a multi unit property and had a 40% down payment you should be able to find some that cash flow.

That being said my primary is paid off and I enjoy the security of that.

Only you and your spouse can figure out what path makes the most sense for your situation with this money.

If you’re still undecided put it in a HYSA for a while and ruminate on the possibilities.

@Jake Marriott No real advice but I’ve got an 8 unit that has two separate septics. 4 units per septic. So far so good but it’s definitely gotten more expensive to maintain them over the past couple of years and I have to have them pumped every year. The cost for that is now about $1000 per system per pump so $2000 per year.

@Daniel Lenders I’d consider investing in southern New Hampshire. It tends to be more affordable than MA and is definitely more landlord friendly.

Also if you’re close to Boston many of these markets are less than an hour away which is still pretty local to you.

@Brian Smith Gas heat is expensive. I’ve been putting it in some of my units. And 1 heater won’t suffice. You will likely need 1 unit per room. 1 for the living room and 1 for each bedroom. And possibly 1 for any other large room.

And to top it off my insurance wouldn’t accept that gas heaters are sufficient in NH where I invest so I’ve had to maintain my furnaces in working condition. And keep insurance on my furnaces too. Despite the fact that we’re not using them.

We’re running about $2700 per Rinaii heater so at least $6000 per unit for a 1 bedroom and that’s without the cost of running the gas lines. Which I’m averaging several thousand per unit.

This year my accountant charged me $1800 to prepare my tax return.

I’m not sure if this is reasonable or not. My bookkeeper thought it was outrageous.

So I have 8 properties and the accountant received 2 P&Ls. One for 7 of the properties and another for the 8th that is help in a partnership.

I probably had an additional 8 documents regarding investments and their interest. As well as a W-2 document.

I spent an hour in office with the accountant going over things. Then we had about 6 brief follow up emails to finish sorting things out.

Does $1800 seem reasonable for this or should I start looking elsewhere for next tax season?

@Collin Holdread If you have a no pets policy then tell them they can’t have the dogs there. It’s a tricky situation but not sure ESAs are a protected class. And if they’re actually trained dogs they would not be jumping aggressively at the neighbor.

I’ve had lots of dogs during my life but all were well trained and would never have aggressively jumped at someone.

@Hoai Nguyen I have a combination of SFH, small multis and several mid size multis (think 5-12 units).

My first 8 unit was much harder than my previous smaller purchases primarily due to the fact that it was a great value add building that had been totally mismanaged for years.

Getting it turned around and 5-8 units renovated has been my biggest challenge so far in real estate investing. Simply having to deal with much greater numbers of problems at once was very challenging.

I’ve still got 1 unit we’re working on renovating.

But once it was stabilized and occupied things did get easier.

I’m not sure I would recommend taking the leap to a 20 or 30 unit property first. I’d recommend trying a 10 or so unit building so you can further develop your systems and processes.

I think going too big at first could set you back simply due to the overwhelming amount of demands on a big building.

@Sarah Marium I strongly recommend self-managing. I manage 31 units myself and only occasionally take along my favorite contractor if I’m serving eviction paperwork. But really any second person will do for this as it shouldn’t happen that often if you’re properly screening your tenants.

My bank only requires 20% down for investment properties so 25% down would improve your bottom line.