All Forum Posts by: Hoi L.
Hoi L. has started 10 posts and replied 68 times.
Post: Roofing Contractors in the Greater Philadelphia area
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
KO Roofing is the roofer I had used in my row-home flat roof replacement in Westbrook Park.
Very reasonable and a standup crew.
Good luck
Post: tenant appealed monetary judgement
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
What do you have to loose? Attorney fees? Nightmare tenant has already moved out.
Post: Approved HELOC.... Now What?
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
When I took out a HELOC from my primary residence, I used it to buy a property (with extra cash added) with 100% cash to obtain the sale (no mortgage/financing worries for the seller), beat out an offer that was 5% higher, before refinancing the rental property at 80% LTV with 30 yr fixed mortgage. I then used the refinancing cash to buy 2 more rental properties. Leverage was key in my acquisition phase of REI for us. However, now with rates skyrocketing, numbers don't work as wellanymore as far as +cash flow. When we started out this REI journey, our #1 rule is to ensure long term +cash flow stability (even if <$100/mo per door) in case we lose our jobs but the rent will always cover for the mortgages/tax/insurance.
Post: How to find direct lender for DSCR?
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
I have done 3 rental properties under DSCR loans/refinance (LLC owned) with comparable rates but lower loan package (only about $160-180k each) during the past 2 months. It went from 4.5% 30yr fixed to almost 6% in the course of 2 weeks in mid-Feb. We also have comparable credit scores and such. Rates are about 1/2 point lower if you increase the down payment to 25% and larger loan size, like yours.
Are they able to show you the time to recoup the points paid to lower 2% interests? 7.5% is high, but 2 points to buy down 2% points are also not too bad (I know it is over $10k). Another lender that I am no longer using offered me $4,900 (over 2.5 points for a $180k loan) to buy down from 5.9% to 5.5%. I said no thank you.
Post: Anyone watching? Netflix - Worst Roommate Ever
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
Added to my list! The preview looked gruesome...
Post: Cash Out Refi or Hold the current Loan?
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
Congratulations on your first REI property! Since you are in the acquisition phase of your REI, concentrate on acquiring more capital in order to continue buying more properties. However, you need to refinance at a rate to ensure continual +cash flow. May not be $500/door, but $100/door after cap-ex, vac, R&M, etc, is the way to go.
The BiggerPockets calculator is useful to give you a ballpark range in the next property.
Post: Need advice on 5-units multi-family: rent, utilities, etc
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
Quote from @Nathan Gesner:
Your costs for water and gas are not outrageous considering the number of occupants.
Q: when you use Rentometer to determine rent rate, are you comparing that information with reality? Like Zillow estimates, any computer algorithm can be wildly inaccurate. You need to compare your units to similar apartments: size, layout, location, quality, and definitely pay attention to whether utilities are included. If a similar 1bed/1bath is renting for $750 and that does not include utilities, then you are way below market.
Your utility is essentially $500 and you have five tenants. I would ensure they are paying market rates and at least $100 per unit for utility. In my efficiency units that include utilities, I charge a flat fee based on a single occupant; if two people occupy, I increase the rate $75 a month to cover the additional utilities. All of mine are rented by single people. :)
I would not pay the money to add more meters. Keep it simple, increase your rates to ensure the rent is at market and the utilities are covered on top of that. If that comes to $75 a month, just give the tenants notice 60 days in advance and see if they can handle it or they can move out and you can rent it to the next person. I don't ordinarily recommend small increases to avoid hurting someone's feelings. It's a business, you should charge fair market rates (or very close to them), and ensure your costs are covered and that you're profitable. If Landlords don't make a profit, there's no incentive, rentals would go away, and everything would belong to major corporations or the government, neither of which bodes well for society.
Thank you for your response. There are a total of 8 people occupying 5 units. My SHF (3bd/1.5ba) with 5 people (2 parents, 3 children) and laundry only use 30 gallons/person/day. This place is using 79 gallons/person/day. During inspection, I know 1 toilet is running (has to be flapper, planning to replace the toilet), but a house without laundry and almost 80g/person/day is really kind of crazy. From what I am seeing on rental classifieds, and my nanny's search when she was looking for an apartment for herself (1 bedroom), the market rate in similar neighborhoods are $850-1000 with heat and water. So each unit here may be almost $100-150 below market to be conservative.
Thanks so much for your insightful advice with your experiences too!
Post: Need advice on 5-units multi-family: rent, utilities, etc
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
Good day fellow members! My family started the REI pathway late 2021 and has closed on 2 SFH, 1 pending SFH, and one 5-unit multi-family house. Some details on the multi-unit located in Glenolden (SW suburb of Philadelphia):
Old (early 1900s), 2700 sq ft, converted to 5 units with 6 separate electric panels/meters
Only 1 gas meter, 1 gas hot water heater, 1 gas furnace heat (old fashioned water radiators)
Tenants on lease (month-to-month) have been there: 15 years, 11 years, 7 years, 2 years, 1 year
Tenants only pay electricity; current landlord/owner pays water/sewer/trash (standard for the area); heat and hot water (only 1 gas line and hot water heater). With water bill usage that is outrageous (80g/person-daily; no laundry in house!), and monthly gas is >$200/month and water >$275/month. Already planning to replace every old toilet in the home to newer low volume/high efficient models.
Their rents (two 1-bedrooms, two efficiencies (one definitely is easily converted to one bedroom), one 2-bedroom) are all under rented (currently $710-810/unit: market is $850-950 and higher per rent-o-meter)
Big question regarding rent: the tenants did not have rent increased for past 2 years (usually built in $10/yr), and I am planning to increase rent on 7/1/2022 by ~$50/unit (6-7%) after my acquisition on 3/28/2022. Is this too much? Do I need to justify with showing them the bills to water and gas?
Big question regarding utilities:
1. Should I also install electric tankless water heaters to each unit? Or hire a plumber/electrician to separate the basement gas hot water heater to 5 separate electric hot water heaters?
2. Would changing out the gas stoves (4 out of 5 are gas) to electric be worth it?
3. Should I install community laundry to the basement? The long-term (15 years) tenants asked about it and she says it would be the biggest improvement to the house, "Even if it is coin-operated, you would make it back in no time".
4. Is it worth separating out the gas line to 5-6 and let tenants take over the gas bill?
thanks for all and any advice-help
Post: How to tell seller I cannot work with/rely on her listing agent?
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
Quote from @Joe Norman:
Quote from @Hoi L.:
Quote from @Theresa Harris:
They are under contract with the agent. She needs to get a copy of the contract to see when it is up, but I'd suggest your realtor or you then reaches out to the other agent and tell them to do their job. Or contact their broker and say that there is a conflict of interest and the seller's agent is not properly representing his client, but the daughter/executor needs to do the same. If the agent doesn't reply to her-go to his boss.
I'd still talk to the daughter/executor to keep both sides up to date. Make sure she sends a letter to cancel the first sale if the paperwork hasn't already gone through (guessing the dates expired).
@Theresa Harris Thank you for your advice. The seller told me that after she signed the contract with her agent, he switched brokers and all her previously signed DocuSign socuments "disappeared". She checked multiple times and they just were gone (she told me she wants to review the contract to see how long she is "stuck" with him). Since he switched brokerage, wouldn't she be cleared? Not sure what the contracts between seller to the agent or to the brokage. Thanks
The Seller's Listing Agreement is with the Brokerage, not with the Agent. So if the Agent switched Brokerages, and did not terminate his old Listing Agreement with the Seller and get a new one signed, then he is not currently the Agent. The seller should 100% call the Brokerage that she signed a Listing Agreement with originally to inquire about this Agent's status at the Brokerage and who is currently representing her.
Great to know, and that's why I asked that question knowing that he switched "places" after she signed with him several months ago and cannot now find the original signed contract on DocuSign. Going to find out
Post: How to tell seller I cannot work with/rely on her listing agent?
- New to Real Estate
- Chadds Ford, PA
- Posts 69
- Votes 29
Quote from @Ben Scott:
Can you tell the list agent, 'hey, you'll get your 3% at close. But just step out of the deal and let me deal directly with the seller.' Position it as a benefit to the list agent as he'll get his time back and won't have to worry anymore about the transaction. I hate paying people to go away but sometime it's well worth the investment.
I have thought about that too, but I also hate giving him what he wants, which is getting paid without doing anything. I still cannot believe how shady he was in getting the seller in accepting an offer from someone whom he also was representing without pre-approval and while knowing the previous buyer would never be able to get a loan (no reported income in at least 12 months). In trying to get both the commissions, he screwed the seller.