All Forum Posts by: Austin Hanse

Hey BP, I just had a tenant move in within the last couple weeks and have a situation. There are three pitbulls next door to them that are always outside and bark obnoxiously. Our tenant has two dogs of her own and contacted us yesterday that the pitbulls got through the fence and attacked her dog (The fence between my property and the neighbors is kinda flimsy). She had to take her dog to the vet because the pitbulls were not friendly when they got through the fence. My question is what is my role as a landlord in this situation? Here's a couple thoughts that I'm having.

Do I put up a fence so this is no longer an issue?

Do I talk to the neighbor and ask him to put up a fence?

Do I get the police involved and tell the neighbor that he needs to keep his dogs under control or put up a fence?

Do I not get involved and leave this issue between my tenants and their new neighbor?

Any help is appreciated as I ultimately want to be a good landlord and my tenants to feel safe in their new residence.

I'm looking at buying a property as a BRRRR deal with another investor. We would be putting around $50k in the deal and then refinancing at about 65k ARV. He has the money to fund the deal and the costs, and I would put a couple thousand in and help with the rehab, as well as managing the asset. He would also help with the rehab when he had spare time. My question would be, how could we structure the deal? And how can he protect his investment? I don't know the process of protecting him in the deal but hear things like using a promisory note or joint venture agreement. What's the best/most usual way to go about this?

Thanks!

Hi Ramonater, 

I would start by analyzing some deals off of realtor or zillow to see how the numbers work on real life examples. Once you get decent at estimating the numbers, you can talk to realtors (preferably realtors who work with investors) to start seeing properties and have them give their input on some of the numbers you're putting together.

Hi Andrew, I think you could do this a couple ways. I know you said you wanted to do this without buying the property initially but maybe you could get your mom to agree to seller financing the deal. That way she can earn interest and get paid continuously without worrying about tenants, vacancy, repairs, etc.

Another way is to get the HELOC on the house. Unfortunately I'm almost positive she'll have to be the one liable for the loan. However if she's willing, she can loan you the money for the rehab and you could put in a lot of sweat equity as well as managing any sub-contractors. After it's complete, you could refinance and pay off the line of credit as well as the balance of any current mortgage on it but it's hard to say without any numbers.

If you do this method, your mom would basically be giving you half the equity currently in the house. You could either agree that if the property is ever sold, she could recoup the current equity in the house and you would split anything after that set amount. Or if the cash out refi is large enough, she could take out her current equity that you guys agree on first and anything after would be split.

Hopefully that makes sense and gives you a couple options of how to structure it.

You can try Patrick's handyman service in south city. If you cannot find him online, PM me for his number.

Hi Daniel,

I believe in order to get a home equity loan, they would only be able to give you a percentage of the value minus the current debt on the property. For instance in your example, if the house appraises for $280k and the bank is willing to give you 80% LTV, they would give you $74k ($280k x 80% minus $150k). This wouldn't be enough to pay off your loan and you'd be leveraged with two different loans. I would suggest just doing a refinance where you could get 75% of the ARV which would be $210k in your scenario which you would then use to pay off the first loan.

@Daniel Martinez

I appreciate the responses. My goal is to do my first BRRRR property this year so this helps when evaluating what steps I need to take.

Thanks guys!

If you are doing the BRRRR method, is it recommended to purchase the property initially with a conventional mortgage or to borrow from a hard money lender? Will either one affect how the refinancing process works down the road? For instance, if I purchase a property with a conventional mortgage, will it be harder to refinance this in 6-12 months after the property is repaired and the ARV has increased?

Does anyone have experience with turning a basement into a rental unit? What are the challenges/obstacles in doing so?

My current situation is that I have a seller who countered me and the price they are asking would make a meh deal. However, adding an extra $350-$400/month from adding a third basement unit would definitely make it worth it. The property is a duplex and the basement is unfinished on one side and partially finished on the other side. It currently has a kitchen area, a 1/2 bathroom and another open room. I could figure a way to turn this into a small, livable area by adding a shower, bedroom area, renovating it, etc. I am just concerned about unforeseen obstacles such as occupancy requirements, mailbox issues, city permit issues, etc. Any help is appreciated!

@Tyson Hosey

No I am just trying to run my numbers to make an offer. I'd like to use the FHA 3.5% down but am not sure if I'd even qualify with this known issue. I guess I can always try. And yeah, the quote for replacing it was around 12-13k. It would be tough to cover this and the down payment because it would deplete all my funds.

@Bob Okenwa

Thanks! I will do more research because that sounds like the way to go. I'd much rather finance this repair.