All Forum Posts by: Ben Haab

hey Chris! moving to Warsaw? let's do lunch sometime

You're sweating small things.  That's based on assumptions: tenant pays rent, tenant is keeping property in good condition.  

Suggest handling the puppy situation different.  Properly document pet if you allow it.  Raise rent separately. 

Yes, you should be firm and ensure you have signed leases and not be afraid to increase rent.  If he leaves he leaves, but if he stays at a higher rent good.  One month vacancy between tenants will cost you as much as not raising rent.  

You should go after the inspector.  Total $ you will get is the cost of the inspection, but it's more principle and they usually cave pretty quick. Bad reviews online get the job done.  Then talk with your realtor to get in touch with the seller.  But fix it right away

1) start with the utility. Get as much info as possible, but most likely they will say leak is on your property = your problem.

2) if there is no leak inside the residence I'd start with the main line.  Have you looked for wet areas in the yard?

3) Excavate the main water line yourself. Digging dirt and locating a water line isn't too hard, but it's the most costly part of the fix.  Once you know where the leak is have a handyman replace the line.

Doubt the attorney has an agenda.  More likely they just want it this way because they are trying to protect seller or they are just an a** like a lot of attorneys are.

Question is: 1) can you bring more money to table to close? 2) what's the house really worth / what are you willing to pay? Appraisers are not accurate and do not represent the value, especially when a remodel will happen.

Offer to buy his portfolio; either one at a time via bank loans or ask him to hold the loans.  If he held the loan you both prosper and use your strengths (you managing and his capital ability).  View his ask to manage as a complement that he would want to work with you and then see if you want to work together in some kind of manner.  

Side note: if this is toughest item you face in the RE world (understand the family dynamic) feel blessed.

I found mine on MLS. I still find a few things on MLS worth buying, but has become much harder in the last few years. I like estate auctions (typically grandparents pass away and family auctions home) since they typically need a bit of work and usually go below market value.

If your goal is to "Hold the property for 1-2 years, sell for a profit and move to the next investment." then why not buy a fixer up to live in, have it be your primary residence for 2 years then sell?  that way all the gain is tax free.  with the proceeds you can then buy another primary residence and a rental... 

I did this approach with the first 3 homes we lived in, all about 2 years fixing slowly.

Sell the property.  

Why: you need a true cost build-out that includes Capex, increased property tax, and increased insurance.

Capex: you will need to make repairs to the home.

Property tax: if you are not the owner occupant then taxes sky rocket.  This is different for each local market, but you need to figure this out.

Insurance: your stated expense is owner occupant.  You need the proper insurance.

Also, and most importantly: if you sell now you don't get taxed on capital gains as it was your primary residence.  Take the tax free gain and build out an investment plan on how to deploy that capital properly!

Do you know how to finance your next home?  The debt on your current home will count negatively when getting a loan approval for your next property.  Yes, once you can show rental income, that will be shown as income, but it's not a 1 for 1.  Know your debt leverage and how you can finance going forward.

Why would history matter?  You need to understand what will happen in the future.

Items you want to know and where to get them:

Rent/Income - copies of leases.  Collection of historic rent doesn't matter unless you don't understand the neighborhood and typical vacancy/lost rent.  Unless you plan to use the same property manager and run it the same - you control collections.

Taxes - get them from the county/city.

Utilities - get it from the utility provider if you have to pay for them. Or ask seller for copies.

Repairs - history doesn't matter.  You can assess the property condition and make assumptions on repair rates.

Management expense - get a quote

Rent rolls only matter to me on: of the current tenants who MIGHT/WILL be an issue once you own it.

How can it cost $20k to add insulation - you can either drill hole on the exterior (after unzipping siding) or drill from inside through the drywall and blow in cellulose ....