All Forum Posts by: Dave Garlick

Someone can correct me if I'm wrong but I think commercial loans are also amortized for 20 to 25 years for the amount of the monthly payment but the loan itself is only for 5 to 10 years. At that point it is renewed like a new loan with current interest rates, etc. If you decide to go commercial, make sure you know what all your costs will be short and long term.

I can understand the frustrations of the OP. Most of you who have responded are seasoned investors. I just closed on my first property and when you are new at this there are so many questions you have that are not addressed in books or BP and may pertain to certain areas and markets. It seemed as though the OP was just asking his friend realtor to answer some questions based on his years of experience, not do the work for him. They were already walking the property together at one point so it wasn't like answering a question was any additional work. 

I think that is the biggest issue I had with the realtors I worked with. I bring them in to help me close the mechanics of a deal but in the process, I expect for them to be able to share their opinions about areas, prices, and various other things they see in dealing with real estate day in and day out for years. I'm not asking them to make my decisions for me but if they are to be part of my team, I would expect for them to be able to contribute knowledge and their own opinions based on years of experience that I don't have. THAT doesn't take a lot of extra time and effort. It's already in their heads and if they know it fine. If not, just say so.

Dave Garlick

I just purchased my first two properties last month, two duplexes next to each other in a B- neighborhood. Lower income but family oriented area. Two of the units are empty which I am rehabbing and getting ready to rent out. One of my existing inherited tenants apparently lost her job for awhile and just got a new one and has asked if I can accept half the rent every two weeks until she gets caught up. She had a very good track record with the previous owner for the last couple of years and her mother was the renter previously for years. She's currently on month to month. I'm looking for ideas where both of us can benefit from this situation.

I know there are many people here on BP that have been burned by tenants and will say to give her and her 4 kids the boot at Christmas and since this is my first rental property, I'm sure I will be burned at some point as well. However, for this situation I have a couple of ideas and was wondering if they are viable or if they are problematic.

1. Redo another lease saying she must pay half the rent every two weeks for the next year. This would pay me a premium but I would have to finish out the year before I really realized the gain.

2. Let her know we can do half a payment every two weeks for a predetermined amount of time (4 months?) but charge a $25 premium on each payment. - This would allow me to realize some gain immediately with each payment.

I'm looking for any other creative ideas that others have done successfully.

Dave Garlick  

@Basit Siddiqi Thank for the response. This is exactly what I was looking for. 

Thanks everyone for your responses. It's always great to hear so many different ways to approach things. 

@Yonah Weiss Do you find that that it really doesn't matter if you can meet your CPA face to face? I have heard some people feel it is important. I'm not sure yet but it seems to me that at this point I might feel the same way. Have you ever had any issues?

I just closed on my first deal consisting of two duplexes next to each other but they are on separate parcels. We did do two separate conventional loans which was recommended by the lender.

I know there are a lot of opinions about various different strategies on how to hold the properties and how to manage the finances. At this point I have chosen not to go with an LLC just yet and hold them just in my name as my lawyer recommended.

Since I only have two properties so far, I have created separate checking accounts for each property to keep expenses separate as was recommended by a number of people on Bigger Pockets who only have a handful of units. My question is, for those of you with separate checking accounts for each property, how do you account for and pay common expenses that can't be attributed to one property or another?  Which account does it come out of? Do I need a third account and if so, how do I fund it?

I have been looking for a CPA and an accountant to help me set things up but the 2 I have talked to so far are not as versed in real estate as I would like.

Dave

Has anyone tried using Kensington Research and Recovery services to lower your property taxes? I have a couple of units that are out of the area I live I that I would like to submit for appeal. They say they do not have an upfront charge... you only pay them half of what they save you on the first payment.

Dave

I can tell you from my own experience how difficult it is to actually get started. Way back in the 80's I bought a Carlton Sheets seminar and listened to it several times. Between school, a low paying job and starting a family, I was overwhelmed with the whole idea and never did anything.

Now, 30 years later with about 10 years left till retirement, I discover Bigger Pockets and start reading. I kick myself that I didn't continue down the path 30 years ago. I might not have been able to do a lot at that moment, but it had kept myself in the game and kept learning and saving, I would have been ready to take action during any one of the downturns and could have been in a much better position now.

This time around, I just started out one step at a time. Listened to all the podcasts and read constantly. There were times I burned out and had to set it aside for awhile, but I always came back. I learning how to evaluate deals and ran calculation on hundreds of homes whether I thought they were good deals or not. After 3 years on Bigger Pockets, I finally had my first offer accepted and I close next month. It's scary for sure but I know I did my homework and have mitigated the risks as best as i can. I know things will come up but that happens in life, at home, at work. You just have to continue educating yourself, take one step at a time and deal with it..

I recently found myself living alone in a fairly large house. I decided to look into house hacking and renting out the rooms upstairs. I called my city office to ask if there were any permits or inspections that needed to be done before renting. I was told flat out that you cannot rent out rooms. 

So, is there any legal difference between getting roommates vs renting out a couple of rooms? I see rooms listed for rent in the same town online. Not sure how to approach this. Has anyone run into townships that do not allow renting out rooms?

@Russ Draper He was originally asking $231k for both units ($113k for one and $117k for the other. I offered him $180k for both. He countered at $217k for both. He refinanced them recently so I think he is limited on equity. I came up with the $200k for both as a possible counter so it isn't really an arbitrary price on his part.