All Forum Posts by: Calvin Douglass

Update: I'm having the AC unit serviced this weekend. I have learned that a poor refrigerant charge can make compressors run much more often than they need to, substantially increasing electricity use. Yes, the neighboring homes being hot is exasperating the issue, but I'm thinking I can show some goodwill (and hopefully provide resolution) by having the unit serviced. 

One set of neighbors is back home and the weather has cooled, so no worries there. The other neighbor should have their house closed up and conditioned prior to the upcoming cold months. 

Thanks for the responses. 

-Cal 

One of my rental properties is a 2-bed 1-bath rowhome in the Canton neighborhood of Baltimore, MD. The home commands $1800 per month in rent.

One of the adjacent (attached) rowhomes is under renovation and has been open to the environment for weeks. The owners of the other adjacent home have been on an extended vacation (and have left their air conditioning set to 85 Fahrenheit).

A few weeks ago, my tenants called me saying that their AC can't maintain setpoint--I assured them that this is normal as both demising walls are currently exposed to elevated temperatures. I got a call from my tenants last week saying that their electric bill was $385--my tenants are very distressed. Looking at property records, I'm seeing that the highest electric bill in the last 5 years was $188...

Any advise as to how I should handle this? I'd like to lean on the neighboring properties to help out with the electric bills, but that's not likely to go anywhere. How can I keep my tenants happy without reaching into my pocket?

Thanks Ned, I'll be sure to get out there and attend some local events.

Welcome @Neil Brown. I'm hoping to get a Bigger Pockets networking event pulled together for late January or early February in the Canton neighborhood of Baltimore. Hopefully I'll see you there!

-Cal

@Andrew Oberlin, thanks for the perspective. It's great to hear about the varied experiences of investors active on BP.

@Dan Krupa, great response to Andrew's comments. Lot's to be learned here.

-Cal

Hello @Monique Rene Coates,

"My partners and I have big plans--feel free to check out my profile page for a little background info relevant to the below discussion."  <-- answers to your questions are in there.

My team and I aren't in search of funding; we need advice on strategy. As is mentioned in the initial post, we've got great credit, great assets, and we currently have ~$150k in private capital immediately available to us at 8%.

We're looking for someone with experience to chime in and direct us on whether or not to fund our first deal with 100% private capital.

Thanks for the input,

-Cal

Great info @Dan Krupa, thanks for passing it along. @Devin Wilkins & @Andrew Oberlin, check it out.

In my humble opinion, the mission statement as drafted is a sentence or two longer than it needs to be. There is value in maintaining a concise and to-the-point statement that defines the intent of your team.

@Russell Brazil, thanks for the insight about sellers accepting a backup offer and then banks turning down a low offer knowing that a higher backup exists. I hadn't thought of this before--good stuff to keep in mind.

Hey all,

My partners and I have big plans--feel free to check out my profile page for a little background info relevant to the below discussion.

My team and I just got off our weekly conference call. We checked in on some action items, discussed a few unfinished clauses in our draft operating agreement, chatted about some LLC structuring strategies, reviewed naming/branding/logos, tweaked our Google Drive folder structure, etc. Really exciting stuff...

When discussing LLC structuring, we pooled our knowledge gained from Bigger Pockets and other sources and elected to start our venture as a single LLC which will acquire and hold our first 5 properties. We were discussing initial capital and financial strategies moving forward, and we hit a bit of a road block.

We intend to pool small funds to get things rolling. We'll pay for licensing, home inspections, and other small items out of pocket. We have solid access to private capital at 8% to the tune of ~$150k, but we don't know how to best utilize these funds. In the perfect world, we'd want to limit our use of private capital to the initial downstroke on our first property, and we'd want to minimize the capital stack to 20% of the initial purchase price. We would ideally leverage this 20% private funding using a traditional lender (most likely a small local bank or credit union) who would provide the additional 80% to get the note on the property, and then go back to our private capital reserves for the renovation costs.

From our experience in purchasing our personal homes, we know that a traditional lender is going to look through the last 6 months of our bank accounts to gain a solid understanding of our financial situation. The problem is, if we start an LLC in January and the LLC has a 2-week-old bank account full of private capital, we'll have no income to show and 6-figures of debt. We would be stupid to think that any sane traditional lender would work with us in this scenario--on paper we'll be a huge liability, even though we're a well-organized, educated and decisive group with roots in the industry (and heavy financial backing, to boot!).

Is our best bet to use 100% private capital to go after our first deal? Once purchased, renovated and rented, we could shift this leverage to a traditional lender via a conventional refinance, with no seasoning or other bull to deal with. On the downside, we'll be paying 8% instead of 6% (or lower), but on the upside we won't have to deal with banks. Can anyone lend some perspective?

Thanks,

-Cal