All Forum Posts by: Charles Carillo

@Joe K.

I do not know the details of your specific situation (amounts owed, class of property, etc.), but, in my experience, it is a waste of time. I feel the main goal of evicting a tenant for nonpayment is to get them out of your property. A judgment is great, but let's be honest: if someone does not pay rent for the property they are living in, do you think they will pay a judgment off? They will wait 7 years for it to fall off their record. In the meantime, they will apply for credit, apartments, and utilities through someone else's name.

In regards to garnishing wages, unless the tenant works in a higher-paying field or for a certain company that pays more than other similar companies (doubtful), the ex-tenant is just going to leave their job and get another one, and you need to restart the process (after you find out where they are now working). Lower-skill jobs have higher turnover, and companies that hire for these roles are always hiring and are likely not the pickiest employers (for example, the average annual restaurant industry turnover rate is 79.6% from 2013-2023 – 79.6% of restaurant employees leave their job every year).

@Jennifer Rysdam

When we sell properties, we provide all the information to the new owners. If I provided all of the information digitally, maybe I would keep a digital copy for ~6 months after the sale if the new buyer reached out for any reason.

@Carl Rowles

I would keep the property's finances separate from your personal finances, as you have suggested. I typically use a local bank as the operating account for a property, and then if I own the property 100%, I will have a savings account that I will use for my reserve account for all of my properties. Handling security deposits can vary from state to state. However, having a separate account for security deposits is usually the best action.

Another point to make here is that it is not all about the interest rate you are receiving. Setting up a bank account at a local bank or credit union could help grow your business in the future. I would find a local bank that works with real estate investors and open an account there. At some point, as your portfolio grows, you will need financing, and small banks and credit unions really strive in this area (especially with small commercial properties). 

@Jose Almonte

Add up all your annual expenses and then determine your total monthly expenses. You now know your cash flow and what you can take out.

Investors' problems sometimes include not budgeting correctly for repairs and maintenance and not factoring in a set amount that they will be contributing to their reserve account for CapEx (if you have CapEx repairs coming up sooner than later, put away more money into reserves now).

To summarize, factor in all expenses and your monthly deposit into your reserve account before calculating your monthly cash flow.

@Becky Hoffman

Have you tried speaking with any local banks or credit unions? They are more likely to finance properties that vary from the norm.

@Phillip Ambrose

I am unsure if I would do any business with friends, but I feel the safest scenario is lending them the money to make the repairs (while also placing a lien on the property). You are protected, you make some money on interest, and your friend gets a much better price for their property. With the scenario you explained above, I feel there would be some awkwardness in the relationship if you invested $10k and months later made $40k on their home.

@Leon Korpel

We have partners who are foreign investors. DM me, and I will send you contacts for attorneys, lenders, and accountants they have previously used. It is important that you hire professionals who have experience working with foreign investors.

@Sweta Jain

Yes, set up a separate checking account only for that property. I would also send a formal USPS letter to the tenants alerting them of the change and how they will pay rent, report issues, etc., going forward.

@William Than

I suggest speaking to local banks and credit unions. Whenever I have an issue with financing, I normally contact local institutions. They are much more reasonable and are more intertwined in a community than some lender states away. The credit committee is usually made up of local people who are familiar with the market they are in. Lastly, they like building relationships. Once you find a lender that finances properties similar to yours, start building a relationship.

@Patrick Idowu

This sounds like the beginning of a bad situation. What happens if one pays and the other doesn't? You can check with your real estate attorney, but I might suggest they pay one month of rent as a penalty and move out now, or maybe let them go without a penalty. I would not, however, create an addendum that lets one of the tenants out of the lease if the other doesn't pay. You are now getting in the middle, becoming a mediator between them, and as it sounds now, it is doubtful that you will be receiving the full rent.