All Forum Posts by: Dan Shelhamer

@Haiyang A. thank you!  I used a vinyl floor by Shaw that I got from Lowe's for $1.98/square foot.  My contractor used cement board to level the floor.  It's still not perfect but much better than it was in the beginning.

So just wanted to give everyone an update on this BRRRR deal as some of you have expressed interest in knowing

Unforeseen issues we had

• Don’t know how I missed it but we ended up having to replace all of the windows due to them not being able to fully open. Extra $4,000 for entire house of new windows.
• We initially took title to the house in our LLC. Because of this, we were not able to pull out 75% LTV until the house has been in our names for 6 months unless we decided to do a commercial loan. Instead, we could only pull out our original purchase price (called delayed financing) which we did. At closing of the re-fi we deeded the property into our personal names for 6 months and then we will be able to pull out the remaining equity up to 75% LTV.

• The house ended up appraising for $116,000 ($16,000-$21,000 higher than projected), and with a potential to be even higher at the time of our 2nd refinance.

Overall, really enjoyed the up’s and down’s of the whole process and can’t wait for my next one!

@Kim Meredith Hampton thanks for your response!  I spoke with my attorney and he said how much I charge/refund them is negotiable.  They gave me notice that they wanted to back out on May 28th, so we are treating that as a 30 day notice.  We are charging them for June (30 day notice) rent plus 1 month for breaking the lease. They already paid for the month of June, so we are taking 1 month rent out of the security deposit and returning the rest to them which they agreed on. 

We had them sign a lease termination agreement stating that the lease is over and they can't pursue any further action.

@Mike McCarthy I was always under the assumption that if you break a lease early that you forfeit the security deposit?

So I just signed a lease with new tenants a month ago.  They have been nit picking and complaining here and there, and haven't even technically moved into the unit.  I took 1.5X for security deposit and 1st months rent.  

I just spoke to them today and they informed me their young son has respiratory issues and after explaining the living situation to the doctor, he highly recommend against them living in my unit.  The reasons they provided are due to it not having A/C, and the water heater is in one of the bedrooms in it's own closet and they are worried if it were to leak or break.

I used the lease which is provided here on Bigger Pockets in the Landlord Forms.  I was planning on keeping 1 months rent for them moving out early to cover the time it will take me to get this refilled.  Can I keep their entire security deposit which is 1.5x rent for breaking the lease?

I am definitely interested in joining several REIA’s. Me & my wife are moving to Scottsdale in September (from the Chicago Suburbs). I have rental properties here which I will be keeping and will be investing full time come September in AZ. I’ll be following this thread!

I ended up purchasing the app Things 3 which is the #1 app currently for the GTD method and absolutely love it.  Only $10.

@Joe Splitrock can you explain how you did a commercial loan with no down payment on a duplex?  I thought commercial loans were only on a 5+ unit property. 

The majority of my residents have dogs.  68% of US households now have a dog so by not allowing dogs you are going to find it a lot harder to find qualified tenants.  I have not had any issues so far, and by allowing them I feel like people are less prone to want to move and deal with finding a property that accepts them.

• I charge $300/refundable deposit per dog (max of 2)
• $35/month per pet

@Dr. Jordan E Smith

1. Did you buy a SFR or a multi-unit for your first property? SFR

2. What type of loan did you use? What was your downpayment?  I used a conventional 15 year loan (4% interest rate) with 20% down.  In 2 years since I bought it, I am now refinancing it because it has almost doubled in value.  I will be switching to a 30 year loan because my goals have changed and I want to scale up and realized that a 30 year is the way to do that.

3. What was your initial cash flow after all expenses? (not including tax benefits/equity/loan pay down) Cash Flows around $375/month at about a 23% COC return on a 15 year mortgage.

4. Did you have any land-lording experience or did you hire management right away? (will budget for it regardless, just curious)  I house hacked my primary home so I had some minimal experience, but definitely not the same when you're renting to friends and family vs. a real tenant.  Highly recommend house hacking to begin with to get the owner occupied rates and then move after a year.

Most importantly, would you do anything differently, looking back on your first deal? Electronic payments from the start!  Also, have a clause in your lease that tenant is responsible for pipes freezing up!