All Forum Posts by: Daniel Netzer

We use the august smart lock but we don’t integrate it with Airbnb because I don’t want to make guests download the app. I feel like older clients would be hesitant to do that and most of the guest in our price range have been older. Instead we use the august keypad that is paired with the lock so they can just type in a code. We REALLY like it because I can lock or unlock the door remotely (if they forget to lock it after checking out) and I can add or delete codes remotely. I can also set up the codes to expire at an exact date and time. The only downside to this is that our keypad batteries seem to die every 3-4 months. They’re just AAA’s though so it’s cheap. We get about 6 months battery life on the actual lock because we are running the august “connect” that utilizes Bluetooth rather than the lock using wifi. This doubles battery life. 

I agree with everyone about the Queen since the room is tight.

I have one room that has 2 Queens instead of 1 King. It makes us more money as we have a higher occupancy. 

Again, I don't think a lender will offer the same terms on a sales price of 1m property vs an identical 2m sales price property based on anything but comp value.

I will start calling as this is starting to bug me again.

But if it was a 5-plex+, entirely different story, right? 

Not necessarily. FHA loans allow the purchase of up to a 5 plex as owner occupied.

What you can do is simply call up a lender. Tell them you want to know about a 12 unit apartment. Tell them it has an excellent rental history but is pretty much the same as other in the area, but you want to pay 30% more for it because it has a great history.

Find out if they will lend on it based on that criteria. I am not talking about tangible things like newer construction, better area, all new updates to roof and hard systems. I am talking about simply because it has good rental history.

I would be curious to their answer. Maybe I will call around on Monday to see what some lenders say. None that I know or work with, random folks, and post it in a new thread.

Quote from @Daniel Netzer:

This is why we charge early termination fees. The Tenant breaks their lease in the fall months, making it difficult for you to find a replacement tenant in the winter.

My process is to charge the early termination fee and require the departing tenant to allow marketing and showing during their final 30 days. This gives me extra time to find a replacement.

I also recommend you consider renting for a shorter period and a reduced rate. One month vacant will cost you $4,200 plus utilities. Drop the price $500 and rent it for six months and you'll only lose $3,000. Make it clear in the marketing that price will go back up in the spring. It's better to lose a little and keep it occupied than it is to sit on an empty house that can freeze up in winter or lose months of rent.

Quote from @Shane Crockett:

So you are suggesting a 4-plex worth $2M producing $100K NOI is worth the same as a very similar 4-plex next door producing $200K NOI? 

Yes. What I would like you to do is take an actual property that meets some kind of this criteria and see what a lender says.

I spent some time earlier this year chatting with 7 different lenders about this exact topic seeing as there was a thread on it.

All of them said the same thing. It is worth what other similar properties are worth. Now we are talking about residential conventional mortgages here and a 4 plex can fall into that category.

If you are talking about commercial lending, then you might see some different answers. I also asked a couple of DSCR lenders and they told me the same thing.

The bottom line is that if they need to foreclose, the property isn't worth more because it has a good rental history with a possibility of that continuing. It is worth what others are worth in the market plus or minus any upgrades or deficiencies.