All Forum Posts by: Eddie Werner

Some local real estate investor groups do walk throughs of properties before/during/after rehabs. If you find local investors doing that then attend and ask questions so you start to learn.

If the carpet wasn't wet when they moved in (did you do a move in inspection with them to note issues) then their rug caused it or they spilled something and covered it with the rug. Either way sounds like it's on the tenant.

Is electric separate and paid by each tenant?  If so I would have approached this differently.  I would have added baseboard heat to each unit so the tenant pays the electric to heat their own units.  Having one tenant control one heating system for all three units is a red flag to me before a purchase.  I would either have to see if they could be split so each tenant pays for their own heat or I would pass on the deal.  

In terms of a long time tenant being below market rent I would simply send them a letter 60 days prior to the end of their current lease (if that's the law in your area) and inform them that in order to properly maintain the property their rents must be increased to market rent of "whatever that is."  You may want to structure it in a way that it increases $50/quarter until you get them to market rents just to show you want to work with them on the increase.  If they say no then I would just get a new tenant to come in paying market rent.

There probably won't be a full blown crash but there could be a correction. We can't control or predict it but it's based on jobs and credit. I think those most at risk are in the heavy value swing cities like New York and LA. If your in the rust belt or areas like OH and PA I don't think you Have to worry as much but as long as you buy right and are getting properties under market value you will be fine.

I would prefer to not have ALL my cash tied up in properties.  Sometime it is strategic because all cash offers can get you better deals which are beneficial when you cash out.  Be very careful if you buy all cash and want to refi to get the cash back out.  Appraisals can be hit or miss and you may not get the equity out you were expecting.

If you have a lot of cash I would leverage it to buy an apartment building.  Economies of scale are in your favor.  I like single family homes but if you have a couple hundred thousand you could leverage a nice complex.  Just my opinion.

Leverage is one of the great things about real estate.  You can spend 20k to own a 100k asset.

If you have a good accountant they should be able to advise you.  They know your whole financial picture and should have a couple ideas to share.....if they don't you may need a new accountant.

I would ask your attorney that drafted the LLC and your accountant. Depending on your personal situation there could be a compelling reason to go either way.

@Account Closed can help he has done demo work for me before.

I would be very upfront with her and explain that you must maintain market rent for the unit because you need to have the income to support upgrades/repairs/maintenance and larger expenses as they arise.  This way she knows you care about maintaining her home and hopefully you have a good track records of quickly fixing issues to back this up.

I would do a graduated increase since she could be a great long term tenant.  If you need to increase by $175/month to bring it to market rent I would offer her a quarterly increase of $43.75 so after 1 year (4 price increases every 3 months) it is at market rent.  This takes away the initial impact of such a large increase and lets her plan every 3 months to meet this new rent amount.  If she does not agree to this then it would be best she move out so you can get someone in to pay market rent.  

Are all utilities separate between the two units?  Is the 1200/month rent for each side or total for the two sides?  Your repair and holding costs seem low without knowing more of the details.  If you PM me the address I can give you more info.