All Forum Posts by: Dan Bosak

I dont see it being worth it for an investment property.  It will cost you more to put it in and because they are newer, it can be tougher and more expensive to get parts if something happens.  I have one in 1 of my rentals but only because I lived there and got it for myself. 

You wont be able to charge any more in rent because it has a tankless hot water heater, so I'd save the money and just put in a standard tank heater.  

You will need some enzyme pet odor cleaner.  Home Depot has one that is ok for most dog odor issues but most pet stores carry Natures Miracle which is better.  It's a good quick first option for treating an area before replacing subfloors, but as others have suggested replacing the carpet and padding is a good idea. 

I send the new tenant(s) a letter to introduce myself and to give them all of the contact information they will need including: How to pay their rent and who to make it payable to and Who and how to reach out in case of maintenance issue or emergency.  

Tenants are often afraid of a new owner and afraid they will be kicked out or that rent will go up.  So, I also let them know that nothing is really changing for them and that: Their lease will remain in effect and their rent will stay the same and that at the end of their current lease, they will be given the option to renew.  

Now at renewal the terms may change, but I don't want the tenants to worry and start looking elsewhere.  

For NJ, I also have to inform them of where their security deposit is being held (bank and account #) so I use this form to inform them of them of that too.  

I do a lot of seller financed deals and the terms vary a lot.  As John mentioned, most sellers will want or need (in order to pay off a loan, etc.) you to put some money, but not always. 

I've done some where I put 10-25% down and seller holds back the balance as a loan.  I've done some where the seller holds 100% of the purchase price, but that has been the 3 or 4th sale with the same seller over several years so by then we have a good comfort level and working relationship.  I've done others where the bank funds 50-75% of the purchase price and the seller takes a 2nd position loan for the additional 25-50%.   

And yes, you are right.  With seller financing, there are no bank guidelines or underwriting to conform to so it's really a matter of what you can work out with the seller.  Some sellers will want to see a credit report, but in most cases it's a matter of them simply trusting that you know what you are doing and that you will be able to continue to make money with the property like they have.  That can be great but not always.  I've had sellers who offer seller financing but they don't understand their own numbers and the property simply doesn't bring in enough money (after accounting for all expenses and reasonable vacancy and maintenance reserves) to even pay the loan.  So make sure that you do your own underwriting and are comfortable and confident with the deal.  

Make sure that you have an attorney involved to draw up the loan docs to ensure that everyone is protected.  

Your license will let you work anywhere within the state but each broker/office will tend to focus on an area relatively near that office and if you are trying to work too far away from the office you may need access to multiple MLS systems (each with their own fees) to get the info you need. I have needed a 2nd MLS just to get info on properties 45 min away from my office.

Once you have a license for 1 state is a bit easier to get licensed in other states since some have reciprocal agreements.  

I use ring central.  You and anyone working with you can download the app to a smartphone or access via a computer and have access to the voicemails and texts from tenants.  

You can set it to alert or forward to different people based on the day or time of day etc.  Pretty simple and no need for additional equipment although I do also have an office phone that uses that number as a VOIP.  

My only concern is how you will handle the management from out of state?  Do you have friends/family nearby who will be able to help with showing the property and/or coordinating maintenance.  Even new homes have some minor maintenance items from time to time, so you will need someone you trust to handle that.  Likewise, you will probably have some turnover during those 5 years so will need to be able to show the property to prospective tenants. 

Just based on numbers, it's probably better to keep and rent it but also consider the hassle with managing from out of state.  

Thanks JD and that's basically the same as the keybox I have in the office now but with 75 units now and growing, it's getting cumbersome -- I want a process that we can scale as we grow and that is efficient and easy.    

How are you handling all of the keys for various properties?

I have a lockbox key cabinet in the office but it's not the most efficient option since we end up running keys around and I find that keys too often are mislabeled or missing.  I'd like to add a secure lockbox to each property where a spare key can be stored that we can easily access for emergency, maintenance, etc..  

I've mounted simple master-lock combo lockboxes to foundation walls at a couple of my properties but am not sure if that is the best option.  I was thinking about adding knox boxes to each property since I can have a single master key for each, but at $200+ each, that adds up quickly.

Any other suggestions for how to more efficiently manage the keys and/or type of secure lockbox option for this scenario?

Just do it as a simple loan to individuals or LLC. Since it's a loan, the money you receive is not taxable to you and the principal paid back is not taxable to your parents. If you are paying interest, the interest payments will be income to them and will be an expense to you. Also, depending how you want to structure it, you don't need to make payments. It can simply be a loan to be repaid at date X and since its your parents if you need to modify that date, no big deal.

Just make sure your accountant(s) understands what you did and why so they account for it properly and dont think that it's income or a capital contribution from you into the property.