All Forum Posts by: Devin Haertling

Elijah Roberts so you manage your Belleville property from rock island or do you manage your rock island property from Belleville? Where do you live and spend most of your time? Do you feel like you have a personal knowledge of the Belleville area?

@rene Guerrero I did not refinance and it is not a HELOC. the loan uses the equity in my house as the "down payment". My house is collateral on the loan

This prompted me to impose stricter late fees as I thought I got lucky. Now one tenant has fallen behind by 18 days with a $10 per day late fee. She has made a few small payments but still hasn't caught up. I have never had to go through the eviction process and I'm still working with them in a payment plan.

One tenant has been in the same house since I bought it 3 years ago. They have paid late every month after the first month they moved in. This has been a nice extra cash flow but I considered myself lucky that they haven't fallen more than a month behind. This prompted

Thank you all for the responses. I'm in Illinois. Anyone know the max late fee that can be enforced? I've tried to find it online and I'm getting mixed answers.

I self manage 6 SFR. With my first lease I started with a flat $50 fee if rent wasn't paid before the 7th of the month at 9pm. A tenant took advantage of that and now pays at the end of every month but I get an extra $50 each month With another lease I really wanted to discourage paying late so I changed it to $5 per day after the 7th at 9pm. That wasn't enough to deter late payments either Now I charge $10 per day after the 7th at 9pm and I still have a tenant that habitually pays late. Now it's nice to have the extra income but I was imposing the late fees as a motivation for my tenants to pay on time. Anyone else have thoughts? What late fees are you imposing and how far behind do you let them get before asking them to vacate/start the eviction process?

I would definitely like to get your realtor's contact info. 

Do you self manage or use a management company?

I currently have 6 single family rentals that I have financed through the equity in my home. My current equity in my home is $60,000.  My rate is 4.5% amortized over 20 years with a balloon payment due 5 years in that will roll over to a new loan for 5 years at the banks current rate doing so every 5 years until it's paid off. I pay biweekly so the 20 year loan will pay off in 17 years.  I roll closing costs into my loans as well, typically around 1000 per closing.  I self manage and I cash flow around $700 per month after mortgage taxes and insurance.  I started 3 years ago and have accumulated 6 properties all using the above method. So far I have collected 100% rents and my vacancy rate is less than 1% in that time frame. 

I welcome any positive or negative responses to my method as I am looking at trying to expand my single family to 20 units or getting into multi family.  

So far it is working but I want to be able to see pitfalls ahead before I push forward with this same method of financing.  

My bank is a small local bank and I have a very good relationship with them.  They tell me as long as the equity is there they will continue to give me new loans. 

I also have heard of rolling your IRA into a self directed IRA. I understand there are risks as mentioned but if you buy the right property it is like owning a blue chip stock with a good paying dividend. You own a house that presumably won't lose value and you get to collect rent each month while keeping the value of your initial investment. Think about an IRA. When it's time to cash it out you sell your holdings and spend the money. After 10 years your nest egg of money is then smaller than it was. Why not use that money to buy real estate that will give you steady income while keeping your initial investment intact. I know the real estate market can crash as it had in the past but if your property stays rented then you're still cash flowing well

I used the equity in my own home to finance the purchase of my first rental 2.5 years ago. Since then I have been able to grow to 6 single family rentals all using the same strategy. Every property has used the previous equity in my home along with the equity in the previous rentals. We have been able to finance each one with absolutely no money down and even rolled closing costs into the loan We work with a small local bank and my average closing costs are $1000 without sellers contributing anything. Our rate is 4.5% over 20 years but after 5 years the rate is variable but hasn't changed in the last 4 years. I know there are risks in this but taking everything into account it was right for us and all properties cash flow very well. I collect 100% rents and so far my vacancy rate is under 1%.