All Forum Posts by: Frank Geiger

You should change the lease in the future to at least 30 days. Give yourself more lead time. They will be required to pay till March 1st according to your two week rule. The rent will be prorated for 1 day so monthly rent divided by days in March. 

David,

I saved for a year put 25% down then instantly regretted it. Took another year to save up another 25% and then recycled cash after that. Not bashing other strategies. It just took me a long time because I was single and not making much.

Yours? Probably.

Disclaimer: I have no knowledge of SF or any of CA just keep hearing people talk about it.

The ones who truly understand the power of real estate are! Not all agents want to invest. They have different things that inspire them like luxury/ high end homes. Not all people choose the career for the money. Some genuinely enjoy the job and networking with clients.

a) No, but he will probably be really appreciative if you did. If he is a good tenant, I would probably try to work something out for less turnover. The cleaning fee can be a conversation you have with him. Explain that you need to get the unit cleaned for a new lease. You are doing him a favor so he will probably agree.

b) Yes, you can raise rents. But you need to void the other agreement. Since he is moving units a new lease will be a must. Again, make sure he knows this before moving in with a conversation and document that explains all the details of the move.

c) How long ago was this? Do you want to keep him as a tenant if he is not up to date on the rent?

You are overthinking this. It's all about how you screen and the location of the property. 

Are you buying cash? Vacancy is low at 2% If you were to purchase the property all cash at $118,000 and receive $222.17 a month cash flow. Then:

$222.17 x 12= $2666 a year this is after all expenses (NOI). Therefore your yearly ROI for the $118,000 you put into the property will be:

NOI/Total Cash Invested

$2666/$118,000= 2.26%

That is a terrible return and you could achieve a better ROI investing in bonds. But if you adjust the amount of cash you put in the deal it may work out for you. Essentially you are throwing 118k into a deal to get $2666 back a year. It will take 44 years to get your money back (without raises in rent).

50 units for your first deal! Hope some investors in your group have experience obtaining commercial loans. I agree with @Calvin Kwan the numbers don't lie. Don't get emotionally invested in the deal. Another thing I would add is always have plenty of reserves; especially for a deal of that size.

Marcus,

You cannot penalize a member of the military for breaking a lease due to a permanent change of station (PCS) due to military orders. However, I would have the wife sign a new lease as the other one is technically broken. Then she will be responsible for the entirety of the rent.

SERVICEMEMBERS CIVIL RELIEF ACT (“SCRA”), 50 U.S.C. App. Section 535

At the very least have a skype interview with them. I would say they are smart to try and find a place to live before relocating.