All Forum Posts by: Bryan Hartlen

I didn’t mean to imply that every increase results in turnover. Just that some increases might. And that sometimes as an operator you trade off market rent increases to improve the probability for a quality tenant renewal. You may still be increasing rents but at rates that you believe will keep the tenant.

Maximizing cashflow becomes a strategy choice that accounts for your market and tenants. Some will increase to market rates at every opportunity without being concerned about turnover. Others will increase moderately until they get to a certain threshold (eg > 10% below mkt). The success of either will depend on the market demand for the class of property. 

Could be a business decision based on keeping long-term high quality tenants rather than risk the costs on turnover. The turn will typically cost at least one 1 month rent and then the freshening/repair costs. In most cases you will loss money (in the current year) if you need to turn a unit for a 10% rent increase. The operator may trade off the longer term benefits to keep a high quality tenant in place.

@Grant Nash - if your goal is to refi 100% (leaving $0 invested in the property) you're going to have to find off market sources. In your example you're paying 89% of ARV (Price + rehab) before counting any holding costs. If your refi requires 30% down then your Price + REhab + Holding is going to have to be < 70% of ARV.

That said a successful BRRR does not require that you recoup the full 100% of your investment IF you have the ability to leave some funds in the deal. In your example above, leaving $21k investment in the property, would the rent rates for the market make it a good investment?

Those fees go to the Broker not the agent… in many cases it’s a fee that the office pays to the company itself (like a franchise fee).  While you can try to negotiate anything, I haven’t encountered any broker that’s been willing to reduce the fees.

Utility charge backs / RUBS

Assigned parking spot rentals (vs unassigned first come first served)

Vending machines

Pet fees

Common facilities reservations / rentals (eg party rooms, etc)

Laundry

Storage rentals

@Tim Kaminski Many selling costs are fixed (eg title search fee) while others will scale with the sale price (title insurance and realtor fees). Prorations (mostly for for taxes) will also vary from market to market. Depending on how accurate you want or need to be a % estimate may not work for you.  It will be much lower than 15%.  In our markets, it’s probably closer to 1 - 1.5% above any realtor fees.  Here are the costs we use for our market when modeling projects. If you need more precision, you can reach out to a local closing company for an estimate.  

Considering them for a hard money loan on a flip.  I've seen some less than favorable experiences posted 3 - 5 years ago.  Wondering if anyone has recent experience with them.  Thanks!

@Baahir Starkey, google hard money and you’ll come up with several large regional and national lenders.  Here in BP, there’s a “Find Lenders” resource that will put your opportunity in front of many smaller ones. Nationally we use Lima One,  although I would hesitate to recommend them. For us, their terms are almost always the best but, they’re almost always late to close, terms change right up to the day of closing, etc…