All Forum Posts by: Jeff Bridges

Thanks! @Aj Parikh but shouldn’t I use this time to maybe reposition the portfolio toward newer and higher growth neighborhoods while the market is hot given the flat rent growth and other tenant quality aspects?

Hey all. I have a vacancy coming up and wanted your take on if I should sell now and take profits or keep on holding. Do I love it or list it ???? :)

Townhouse in MD in non-economic growth town near baltimore
Acquisition cost $76k
rehab: 16K
Total investment: $92k
BRRR: Cash out refi-Loan for 80k. Total left in the deal $12k.

Performance: Owned for about 5 years. Cashflow is about $300/month after all expenses (vacancy, P&I, Repair allowance). That makes ROI about 25% annually based on $12k investment. Had a 5k HVAC replacement and an $8k eviction from prior tenant. PM is good but tenant quality looks mixed. Rent has not appreciated much and has been stuck at 1200-1300. Other neighborhoods have been appreciating in rent.

Sell opportunity: Property has appreciated and now worth $150k. Looks like I'll get 46k in profit after selling costs which is about 15 years of rental cashflow. Looks like it is peak market and it seems I could get the most its been worth in over 10 years.

Options:

Option1: Sell and take profits, reinvest into a newer house, nicer neighborhood and better cash-flowing property. 1031 is impossible to time so I would just take the tax hit.

Option 2: Keep and continue getting 25% ROI/$300/mo cashflow on 12k total investment.

It's not a slam dunk as a buy and hold, but its adding to my overall annual cashflow. when its paid off in 25 years, it will throw off $700-$800/month in cashflow so it will support retirement at 58-62. Feedback appreciated!

I am working with a seller via a realtor who has been having trouble selling their tenant occupied condo. I intend to buy it for the right price and terms and rehab then buy and hold. Condo has been leased under market rent to a tenant and the tenant has successfully derailed previous on-market offers. Seller doesnt really want to evict tenant and wants to make it someone elses problem, but also does want to give a huge discount or unload it for pennies. So he's motivated to stop being a landlord, but for the right price.

ARV is $269k. Listing price was $180k. Needs 20-30k in rehab plus holding costs for tenant that will need to be evicted sometime this summer and is not paying rent. DC is not hearing FTPR cases probably until late spring (right now the moratorium continues to be extended month by month).

Previously I offered 100k cash, and that was turned down as the owner really was gunning for his 180k ask knowing that comparable units are going for 260-300 fixed up and think someone can flip it. But between the non-paying tenant, eviction moratorium, and 20-30k work needed to rehab the unit to get that amount, he's not seeing the level of effort needed to get that profit.

I was thinking of presenting again the cash offer of 100k, as well as other offer options to include seller financing. These might appeal to owner where they can get some cash and then a installment plan that gets them cash they werent getting from the tenant vs before when the tenant was actually paying rent.

Proposed Offer options ( i want to present all 3):

100k cash offer-

160k offer- 20k down, 140k seller financed at 4% interest ($668 monthly payment) 30 year amortized, 10 year-term with balloon, 3 month delayed payment for rehab

180k offer- 0k down, 180k seller financed at 4% interest ($859 monthly payment) 30 year amortized, 10 year-term with ballon, 3 month delayed payment (I will pay all closing costs including realtor commission 5% since he is the middleman)

(or I can write the owner direct and bypass the agent since the listing is now expired/ delisted.)

I'm expecting to inherit the tenant and allow him to live there through the end of the spring and try to begin eviction in the summer. I have to anticipate at least 6 month of no rent where I also pay condo fees and all expenses.

Anyone have any better options or suggestions to structure the offer menu or entice the seller? should I try working with the realtor to avoid backfiring going around him?

Thanks all!

"We have had several offers, but they have fell through. The owner is not trying to give the unit away, your offers are extremely low."

Originally posted by @Charles Lauria:

Hi I’m charlie and I’ve just recently gotten into real estate investing last month. I currently go to SUNY Albany because it has the cheapest price for college (around 22k per year) and I get in state tuition because I live in New York. I’d like to go to college in Florida because it is so much nicer there and I hate the Cold. If I own or rent a property for a year in Florida, I can get in state tuition which would make my tuition go from 18 thousand to 9 thousand. Would it be a good idea to buy a multi family property and rent out the other properties so I can put down the property as my primary residence and get in state tuition? I’m going for nursing so I want to make sure the work load from managing the property isn’t too extreme. Would it make sense to do this or should I just rent a property to get the in state tuition. I’m 18 so it might be hard to get a loan but I don’t want to say I can’t do this I want to ask how can I do this

So you plan to put your college/career on hold while you live in florida for a year to meet the primary residence criteria, then matriculate the following fall semester? You cant just buy and hold for a year, then move in after the year is up when you plan to enroll. They will be looking for proof you lived there for the previous year, not you've been a florida property owner.

See the requirements for proof of residency in order to get in-state tuition. Its not the honor system.

https://dlss.flvc.org/residenc...

Originally posted by @Kevin Y.:

Thank you @Jeff Bridges. In my case, with a property under 3 names - would I need ONE standard landlord property policy and 3 umbrellas on top of that?

That sounds most likely to be true since they are personally owned but subject to verification from your insurance broker. seriously, look for an independent insurance broker. Costs nothing, shops many policies for you and not tied to a specific insurance product. worth their weight in gold! just ask around or google for independent brokers/companies for your area.

What I know to be the case for myself is the property has liability protection coverage as part of my standard landlord property policy. Umbrella covers the amount after the property liability coverage is exhausted in the even of a claim against liability. The insurance underwriter will require 500k on your landlord policy, then you get coverage by a separate personal umbrella policy.  Your insurance broker should be able to review the landlord policy and confirm you have the right coverage needed for an umbrella. You get umbrella to cover the amount of your total assets. I dont believe you can have a commercial policy and then use a personal umbrella policy. not sure if thats correct advice. hope that helps!

@Colleen F. , @Jill F. and @David Lee Hall, III Thanks so much for the great feedback!

Things I forgot to clarify: The door on the bottom left is the only interior door. the top door is an exterior entry door. Hard to make interior door a pocket because there is a chimney below the door jamb on the floor plan and there is an HVAC vent on the other side of the door jamb. Traditional door seems to be only option.

Things that help narrow it down is I now know that I really can place the closet in the center or at the right side exterior wall in order to get the 24" required depth. I see if I can run some design options to look at the result and see what the aesthetic and usefulness is the best mix. Definitely going to do built in closet and/or shelves. 

So we've gutted one of our bedroom/office additions in order to apply proper insulation on walls and ceiling. As a result we've had to demo the existing closet and have a chance to redesign. What would you recommend given the space available? See below floor plan. The proposed area for the closet is highlighted below in yellow and the existing closet with the red x will be demolished. I'll be losing 4 inches on the bottom wall due to insulation and framing. So I'll now have a depth of about 20 inches for any new closet along that wall. Contractor proposed building a sliding barn door style closet in the middle with bookshelf/shelving on each side. Is barn door functional or should I go with regular door? Alternatively, I could just make a new closet a bit wider in the same place as the demolished one to make up for loss of depth and keep the space on the right of the closet. Any other suggestions? 

Any recommendations on wiring? We'll be redoing the wiring and adding about 5 receptacles and recessed lights. Anything else we should be considering? I assume if I do shelving, one of them could be wired with power for a TV and a bed could be placed on the top wall facing the shelving/ TV.

Thanks!

@Justin Johnson I save their reports on Dropbox and organize by property and create sub folders for everything. The reports come in handy for collections attorney if an eviction is ever required. You can do a folder for apps and another for accepted tenants for each property. I usually stop creating extra work for myself when I find out a disqualifying item like credit score. Your just spinning wheels checking with HR.

@Justin Johnson if they have no credit, then their score won’t meet your minimum score since any score is Higher than zero. Set your criteria and use that for denial. Also, your spidey sense seems spot on. She is trying to get in another adult roommate. To boot it’s already one you declined. I’d say all adults living in the place need to apply and be on the lease. If other roommate doesn’t apply, then application is incomplete and no denial needed . They haven’t completed a full application yet.