All Forum Posts by: George White

Hello - I am currently selling a 4 unit property and was approached about a Master NNN lease option deal on the property. Essentially, the buyer wants to pay my equity out of the property at lease signing then have a option to buy the property after 3 years. They intend to renovate the property in that time and buy it with the option. If they pay out my equity at lease signing, can I 1031 exchange those funds into a new property even though I technically still own the building and will for a while? Any specific processes or workarounds for this?

 Hey BP - I am vetting a few PM companies and one company sent me their schedule for maintenance which is on top of the 10%/month management fee. The rates are pasted below. Is $40/hr for unskilled light labor reasonable?? That seems a bit overpriced in my opinion. $50/hr in general labor?? Again I think it seems a bit high. Also, the supplies mark-up below. Is this reasonable? This would be my first time hiring a property manager so I am trying to get a better feel for expectations. One reason I like this PM is because their office is less than 5 minutes from my building. Any thoughts are welcome!

Thanks for more input here everyone. @Grey Stone. No Offense taken.

Just wanted to get insight from different perspectives so that I can make an informed decision. Love the forums on this site for this very reason.

Thanks for all of the replies. One thing I forgot to mention is that the daughter said that her mom would NOT move out willingly. The daughter knows that she is tied to any potential evictions/costs incurred and as such is trying to get her name off of the lease with a new tenant. 

It looks like not bringing another tenant into this situation is the way to go and when the daughter moves out, if the mom cant pay the rent then I will likely have to be ready to terminate due to nonpayment.

Appreciate everyone's thoughts.

I have a mother-daughter roommate situation in one of my units. They moved in about 4 months ago on a year-long lease. The mother has a very spotty background and no credit however the daughter is a college student with little credit and no background issues. Both are working. I approved them based on the fact that they were related and I figured together they knew each other and could work it out.  I would not have approved the mother on her own. The daughter contacted me to tell me her mom is having issues coming up with the rent and that she doesnt want to live in the unit with her mom anymore based on her mom using her to pay rent and struggling to come up with the rent. I explained to her how the process would work and that she would need to find another tenant that I approve to take her place on the lease. The daughter is moving out of state next month and is actively working to find another roommate to take her place on the lease. She has since sent me a couple leads that I am currently vetting.

My issue is I don't want to bring someone into the unit unknowing about the potential issue of the mom not coming up with her half of the rent. If the mom doesnt pay rent but the new roommate pays their half, I would need to evict both... That doesn't seem fair. Does anyone have any suggestions on how to approach this situation?

@TJ McDonald

I use FB marketplace. I have about a 15% true funnel ratio. True funnel being, they get through my prescreen questions. My process is this:

Fb user: Is this still available

Me (copy and paste from my clipboard): "Yes! Before scheduling a showing, can you answer the following questions for me: 1) What is your monthly income? 2) Where do you work and for how long? 3) How many adults? 4)- Have you ever been evicted or filed for bankruptcy, or convicted of a felony in the last 7 years? 5) What is your ideal move-in date? Again thank you for your interest!"

This only takes me a few seconds to respond to each person. Yes you get alot of people that have no business inquiring about said property but it's relatively quick. Once you do it enough, you can quickly get a good feel for if you have a serious prospective tenant or not.

Most people never respond to the questions which is fine by me. Many responses to the questions will weed them out right then and there. This process works for me.

Like someone said above, It's just the cost of free advertising.

Thanks @Account Closed, I'll give them a look!

Hi BP! I am looking for a property manager in the Kansas City area with experience with older small multifamily buildings. The 6-unit building is in the Historic Northeast part of the City. Any recommendations of quality property managers that can help me with this property?  

Hey Fellow BP'ers - I need some advice here... I have an off market 6 plex deal in which the owners and I have come to an agreement through LOI on purchase price. Initially, they didnt want to use agents but now they have pulled in an agent that is a friend of theirs and said this agent will do the paperwork. He sent over a residential contract agreement(Better Homes and Gardens Residential Contract) and asked for information such as lender preapproval, and other financing information. I got on the phone with the agent and he says the property is 6 units and less so it is a residential property(BIG RED FLAG!). He also asked me to provide lender information, financing information, and preapproval status. I have spoken to a local bank about this opportunity but not to hone in financing with actual numbers yet.

As I understand it, I didnt need to provide all of this financing information up front since there is no "preapproval" for commercial properties. I stated in the initial LOI with the sellers that there would be a 40 day due diligence period, and a 40 day Financing period to begin after the due diligence period.

Can anyone shed some light on what I should do here? I have some residential REI property but this is my first commercial property purchase.

He just emailed me again asking when he should hear from me again. I am a little confused about what to do here. Any guidance would be greatly appreciated.

Thanks @Lee Ripma

The refinancing entity told me that they won't consider GRM since I am getting a residential loan on the property. He says it will be based on comps recently sold but not necessarily rental income. Can I still make comparisons based on GRM and have that help me? I suppose it wouldn't hurt. Maybe it helps me and maybe they don't consider it but certainly worth a try.