All Forum Posts by: Christopher Price

Good afternoon,

Does anyone know of an agent in the Fairbanks, AK or North Pole, AK area?

Thanks!

Hey Elijah,

I used my VA loan to buy a 4-plex with separate meters. I got my loan through USAA and so long as I lived in one of the units they had no problem with it. The limits I have run into are:

1.  You can only buy for units up to 4, anything higher is considered commercial.

2.  You must intend to live their as your primary residence.

The best way to get an estimate on your mortgage rate would be to get pre-qualified.  USAA was able to give me my rate the same day I applied online.

Regarding your property tax, look at your county assessor's office.  This is the one for Pierce County.  Get familiar with it, I use the assessors in my area quite a bit.

https://www.co.pierce.wa.us/91/Assessor---Treasure...

Regarding the current pricing and market conditions you will need to check comparables with the property you are looking at.  If you don't know how to do this, find a good real estate agent to help you.  They are all trained in this.  Find one that has a good pulse on your local market and don't be afraid to ask many questions.

One mistake I made on my first purchase was the utilities.  If you plan on paying for your tenants call the service providers and see what their rates are.  Our local laws state that if someone fails to pay the water bill, the water company puts a lien on the property.  Unfortunately our water bill is about $300/month and $260-ish is just the base cost.

I hope this helps and hey, Happy Veterans Day!

UPDATE: 

Hey everyone, I appreciate the advise.  I was very concerned with the behavior, but so far everything is playing out well.  When I went into the unit I was prepared for the worst.  I thought my brand new appliances were sure to be gone at a minimum, something the deposit would not have fully covered.  Fortunately this was not the case!

The tenant has continued to pay his rent and has been in close contact with me.  He was from a different state and wanted to move to live in the mountains.  He got to the town and just didn't like it, he knows he must continue to pay until we find a new tenant and has been very tenable about it.

Thanks again for everyone's help and advise!  Jon Holdman- You better believe in the future I will collect the entire first months rent!  Lesson well learned (and luckily learned without harsh consequences.

Hello everyone,

I recently had a peculiar transaction with a tenant.  One of my units became vacant and I advertised it and found a new tenant.  This tenant had a 700+ credit score, no criminal background, and had everything in order regarding payments.

I collected the deposit and pro-rated 1st months rent and he moved in on the 20th.  I emailed him on the 21st to make sure he got settled in ok.  Yesterday (26th), he responded to me and told me that the apartment was nice, but that he didn't want to live in town after all.  He stated that he lived their for a week, locked the doors on his way out and left the keys on the counter.  He added that he would continue paying until I was able to get a new tenant to occupy the space.  (After all he did sign a 1 year lease and this policy was made clear prior to move-in.)

I'm scratching my head, this situation seems very odd.  Can anyone think of a way this tenant is trying to get one over on me?  Has this happened to anyone else?

Thank you,

Chris

Hey everyone.  Thanks for all the input and help!  There are a lot of good ideas.  I'm thinking the small claims court may be the way to go.  Ill update on this when it is all said and done.

Hey everyone,

In addition to owning property I also happen to be a renter.  I have a question from a renters perspective.

I have rented a house in Colorado for a little over 4 years.  A couple hundred feet away sits a large warehouse (Roughly 100'L x 40'W x 30'H).  I was told when I moved in that I do not have access to it because the owner uses it for storage.  I have always had very high electricity bills (Avg to twice my neighbors).  I weatherproofed the house as best I could and set the thermostat for 62 in the winter.  

Recently the owner began renting the warehouse to a commercial carpet company and my electricity rose even more.  I called the electric company and they came out and told me my meter is tied to the warehouse.  I called property management and they offered a recourse of getting 2 meters.  Although I understand this is a good way of fixing the future problem, I feel cheated and wonder if I have a recourse for my exorbitant expenses over the last 4 years?

I don't know if this makes a difference, but the ownership of the property changed hands about 1.5 years ago.

Additionally my lease states "The tenant is responsible for all utilities in their name".

Hey Joshua,

Something you may want to look into.  How much of the water bill is for the water?  This may seem like a silly question, but I have a 4-plex that consumes $280-300/month in water.  That number stays mostly constant, because $65/unit is the SERVICE charge on the water.  If you have a similar price structure it may not benefit you to cap the lines.

Bonus: Do you have a storage building or other structure on the property.  You could add a communal laundry room with coin fed machines.  Could be extra cash flow.

Mano,

Our leases always contain a hold-over clause.  When the lease expires it reverts to a month-to-month and requires 30 days notice to vacate.  The holdover clause also has an increased rental premium.  This typically incentivizes the tenant to sign a new 1 year lease.  If they don't, at least I get a little extra which compensates for the lack of stability.

It sounds to me like your tenant has his heart on owning property as opposed to renting.  In my experience their is little you can do to keep them as a long term tenant.

You mentioned you don't want to sell, but have you considered all of your options?  You may be able to do seller financing where you could get a decent interest rate and essentially have good cash flow for a long time with no overhead.  If your (now buyer) defaults on the mortgage, you get the property back.

Good luck!

Not so great part of town may mean a couple things you didn't plan for.

1.  Finding quality tenants will be more difficult (consider raising your vacancy rate).  

2.  Maintenance costs may be a little higher.

3.  I noticed that you also don't have a line for utilities cost (even if the tenant pays them you will have to pay when the unit is vacant.)  Where I live we pay the water bill for the tenants.  We do this because if someone defaults on the water bill the city will put a lien on your property.  This may be different in your area, but you should check just in case.  

4.  Legal fees- This may be under Capx, but you may want to plan to tuck a little away in case you need this.

5.  Office expenses (If any)- Computer, printer/ink, website, marketing materials.

6.  Do you have a budget for improving the property and forcing appreciation/rental value.  If it is not your plan you may want to consider tucking some money away for unexpected initial repairs (building inspectors miss stuff sometimes).  If so, add it to the sheet.

I can't speak for your area, but $1350 rent on a 97K property sounds pretty good to me!

Good luck!

 Jason if very right about this.  If you don't nip it quickly it grows and your standing weakens.  Imagine letting 2-3 payments slide that are only a couple days late (as I have in the past).  When the next payment comes in 7 days late and you charge a late fee, the first argument you will get is "You haven't enforced this fee before, why are you doing it now".  What is worse is when you get a different tenant that is 7 days late and gets charged.  They find out other tenants have been late and you let them slide.  Now you could be opening your self up to much bigger issues.