All Forum Posts by: Jonathan Taylor Smith

@Maria M., answers to all of your questions would depend on where you're located and the landlord/tenant laws of your state. I'm in NC, and here, if rent is due on the 1st, we must provide a 5-day grace period before charging a late fee of up to 5% of the rent on the 6th. We must also provide a 10-day demand notice, so I send that on the 6th as well, so that if rent remains past-due, I can file for eviction on the 17th. But this will all very based upon your location. You need to review the landlord/tenant laws for your state.

I have used Lima One, and would/will do so again in the future. However, if using them is right for your situation depends on what the money cost will be with your stated PLAN-A. Also, what would be the potential opportunity gain if your conventional loan and HELOC remain available for another property by going with Lima One here? Also consider the likely difference in closing costs.

Depends... What is the value of the assets that need to be protected? Most getting started in REI do not setup LLC's until they reach a certain level of properties and assets - because most just getting started have little in the way of existing assets to protect. Plus, the LLC just adds complication, expense and an additional excuse NOT to get started. You can always move the properties to an LLC later.

Well, in addition to informing of the rent increase, I would also inform that rent will be due on the 1st going forward - and I'd make BOTH effective on August 1st. This provides 57 day's notice. But also confirm on state law that it does not require a longer notice period for rent increases (like 60 or 90 days) despite what may be stated in the lease.

Before moving to a paid PM software system, I made use of Cozy for a few years. It was fine but lacked some features I wanted. And if I recall correctly, you can block a tenant from being able to make payments online. Not sure if they sold data or not. But I know they made money from tenant screening and rent payments - so maybe that's the "catch"?

@Devin Voelker - Cash-flow is not the only way you make money owning rental real estate... There are 4 others, including appreciation, mortgage paydown, tax benefits, and inflation profiting. And if rates go down again in the future, you can always refinance at that time to lower your payment. But you'll be increasing rents each year. So, second year and beyond cash-flow will almost certainly be better than first year. Do you think rents and prices will be higher or lower in five years - and then five years after that? In 2018 I thought prices were too high. How can you know if in 2030 we're not all wishing things were as "cheap" as they are now in 2023?

If $302K is where you want to be, with it having been on market for over 50 days, I'd go even lower and request a closing cost credit and see if they reject outright or counter.

@Jess Hammersley - as long as you've lived in your current owned home for a year, nothing should prevent you from purchasing a 4-plex as your new primary residence, and renting out your current home along with the other 3 units. And you should be able to count a percentage (likely 75%) of the projected rental income for those units to qualify for the new 4-plex purchase. And the lender may require at least 1 (if not all) of the 4-plex units to be in livable condition at the time of purchase if using an FHA loan.

@Sandra Hughes - That may be possible depending on the seller and if they are willing to provide you access to the property prior to closing. It also depends on if the property is in inspection ready condition or if it will need work / upgrades to be able to pass inspection. If so, you'll likely have to wait until after closing before you can make modifications to the property. What you can do now regardless is register yourself / company as a landlord with the housing agency. And note... I'm not certain of Harris County specifically, but in my location, an inspection cannot be scheduled for a property until AFTER you have a prospective tenant for which you have submitted the Request for Tenancy Approval (RFTA) to the housing agency. They will then process the RFTA, tell you what rent the tenant is approved for, and ask if you'll accept it. Then once accepted, the inspection is scheduled. So if Harris county also handles it this way, you'll not be able to get the inspection even scheduled until after you have already listed the property for rent and gotten an application from someone with a voucher.

@Steve Saenz - This depends on your state (I'm in NC); however, the first time I did a private lender funded deal, I had the same attorney who was handling the closing, also write-up the deed of trust and note for the private lender. In NC, the note establishes what is owed, to/from whom and under what terms and the deed of trust binds the note to the property. From there I've repeatedly used slightly edited versions of those same docs on multiple subsequent private lender funded transactions.