All Forum Posts by: David Boroughes

I have a unit where I have let a fairly good tenant stay on month to month for a few years now. I haven't raised the rent because they tend to take care of all the minor issues which saves me time and money, now it's been about 4 years and I need to raise the rent. Does anyone have what they consider a good respectful letter they use in this situation to let the tenant know the rent will be increasing as of Sept 1? I'm only talking $50/month here, which is still a little below market, but the tenant is long term, so I have 0% vacancy on this unit for many many years, and I have no problem passing along that savings to this good tenant. Just looking for feedback on how some of you others ask/notify of rental increases on units where you have nice quality tenants and are actively involved in the property (I do see the tenant at lease a few times every couple months), so I'm looking for a more personalized approach here, 

Thank you, 

As far as appreciation goes, don't count on it. Obviously, right now we are in a good up market, but that doesn't mean the next 10 years won't see stagnation. Buy because its a good investment, not because of what the value could be (a guess) in 10 years.

Both my single's and multi's have seen rising value lately, pretty even %'s too. 

I'm constantly doing something at my multi's, whereas I only go to the singles if there is an issue. The singles are easier to manage, the tenants are not calling complaining about the upstairs neighbor, etc. The singles have less maintenance costs as you can have the tenant be responsible for lawn care, etc. The multi's do provide more cash flow per bedroom though in my experience. I like owning a few of each. If you have the time, go for the multi, see how it goes, then next year maybe go for a single 

Looking at purchasing a single family property that is located in a Business zone in the Town. It is an older home and has always been used as a single family residence. When I look into the zoning ordinances a single family residence is only allowed in a business zone with a special use permit. The property does not meet zoning requirements for much (frontage, set backs, lot size) because it was built prior to the zoning and is grandfathered in. Question is, if I buy it is this going to be a big headache to try and keep as a single family residence? Or, since that is what it has always been, will it be a non issue?   

Depends on your long term intent. I was in a similar situation and decided to go with black to match the other appliances. If your holding for long term, have an average property, and your rent rate is average or at market value, it would probably be OK to stick w white. If you have a nice property and are trying to maximize your rent rate, switching might be a good idea, depending on what your competition is offering. The current tenant won't care if the appliances are mismatched and maybe you swap the fridge to stainless at the next turn over.

Thanks for the help. I'll have to find out the formula the banks use for commercial loans and hope they are more lenient than the typical debit to income ratio they use for conventional residential. It would be great if this actually works, could just keep purchasing more RE in LLC name and each one qualifies (loan) for it self.

I guess I have to ask around for lenders who look at DSCR. The one I have been using only looks at the Tax return for the property (which comes out as a loss after depreciation, etc).

DSCR is way over 1.25, problem is my income still too low with all the debt already in place.

Problem is not number of mortgages, problem is debt to income ratio does not meet lenders criteria

Welcome and congrats ! I'm assuming you have solid credit as well? Have you tried to maybe do a cash out refinance or a home Equity loan?

Yes, and unfortunately those loans I also do not qualify for any more money

If you are in a competitive market, this could go for all, if not more of asking price. Using simple math, at the figures you've presented, the property returns over 8%, where I am, that is a great return.

How long has it been on the market? Any other offers? If you are the only interest at this point you should be able to get it for lower than ask.