All Forum Posts by: Alex Martens

Good evening everyone,

A tenant of mine on a commercial property has been struggling to make ends meet with her cafe. This is not a NNN lease. Her attorney just emailed me a rent abatement request. Long story short, they are requesting to reduce the base rent from $2,000 to $850. She has been in the property for a couple of years now and is still not doing well. My stance is that is that we both signed the agreement, and it shall be adhered to. $850 is way too low to accept. After many problems over the last couple years, I really want to just let the situation take its course and get a new business owner in there. Has anyone ever dealt with this? Thank you in advance for any advice.

-Alex

Hi BP community,

Since 2020 I have managed to acquire my primary residence (which will become a rental this summer), a small commercial property (cafe) and a duplex. I am pretty happy with my accomplishments so far, but want to keep growing! I am feeling stuck on how to continue growing my portfolio. I don't really have enough equity in any one property to HELOC or REFI for a cash purchase on another property. I had a good amount of savings, but unexpectedly had to demolish a SFH in October....long story....Regardless, that was an expensive project. I'd love to hear ideas that some of you experienced investors may have!

-Alex 

Thank you everyone who gave input. I appreciate the help!

@Malcomb Stapel Thank you for your input. I appreciate it!

Hi all,

I am trying to find ways to fund my third RE deal. I was thinking that a possible solution would be to use a personal LOC to secure a property, then refinance into a conventional or portfolio loan. Assuming the numbers work with the refinanced terms, would this be a good idea? What else should I be aware of? I don't believe I have enough equity in my other two properties to borrow a useable amount. Thank you!

-Alex

It can certainly be done, but you want to be very thorough with your numbers. A private lender will be asking for a generous interest rate and at a relatively short term. You'll end up being 100% leveraged which means the property is bought completely with debt. So you'll have to have a plan to pay off the private lender at their maturity date...So you'll have to either buy a property at a nice discount so you can do a cash-out refinance soon after, or do some sort of significant value-add in order to achieve a cash-out refinance. Or simply pick up extra shifts and save like crazy to ensure you have the cash to pay them off. Another thing to consider is what the bank will allow. Make sure you talk to your lenders to ensure they would even allow a loan to be used as part of the down payment. It could end up putting your debt-to-income ratio too high. If the numbers work, they work. Just be diligent. Hope this helps!

-Alex 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $279,900
Cash invested: $25,000

This is my first duplex in a highly desired area. The bottom unit is 1 bd 1br and the top unit is 2 bd 2 br with a finished attic that can easily be transformed into a 3rd bedroom. The property it pretty much turn key. I am just doing some light updating, like light fixtures, fresh paint and LVP in the attic.

What made you interested in investing in this type of deal?

Primarily the location. It is a B class area, and a lot of college students and young professionals love living there.

How did you find this deal and how did you negotiate it?

I found it on the MLS and used my fantastic realtor.

How did you finance this deal?

A portfolio loan, with a HELOC for the down payment.

How did you add value to the deal?

I will be converting the top unit from a 2 bd to a 3bd.

What was the outcome?

It is not rented yet, but hope to have it rented come Feb 1.

Lessons learned? Challenges?

One thing I have come to realize is hiring things out isn’t always bad! I have been stressed about finding the time to do electric work and new flooring. I eventually decided to just hire it out, and since I can afford it, I feel instantly relieved. I am not great with electric and flooring, so It’ll get done faster and correctly with a professional doing the work.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My realtor has been absolutely incredible. He understands investing as well as construction, so I had a good set of eyes looking at the property with me.

Like others, I vote for heat tape. I had a really bad pipe burst last year. After I got it fixed I put the heat tape on and it didn't happen again. 

Hi Michael,

I would recommend not listing the house on a per-bedroom-basis. You should list the house with the gross rent you think you can get. I think college students are a little less willing to rent a random room in a house with strangers. If you list the entire house and advertise it as a student rental, groups of friends will naturally want to rent it out, and they'll just split the cost between them. The other benefit to this is if you happen to not get the college tenants you hoped for, you still have a house listed on the market for the working professional, young family, etc. 

@Dave Mills

I have a pretty new Trane HVAC system in my house. For a while I was wondering why the heck the house would be 74 when I have it set to 71. I looked at the thermostat and saw I had it on the “temporary hold” setting, which means it only holds at that temp for a certain period of time. I turned that setting off and now no issues. Maybe it’s as simple as that? Hope this helps.

-Alex