All Forum Posts by: James Mc Ree

You might be missing the forest for the tree.

You wrote you have a good tenant who pays on time, but has a friend and smokes. I would ask the tenant to have the friend apply to join the lease if you have no objection to the person otherwise.

Smoking is problematic if it has been going on for a little while because the damage is done. Keep charging the smoking fee if they are paying it. That fee is good to have. Be careful to not set an expectation smoking is allowed with payment of the fee.

It does come from minerals in your water and could indicate your anode rod in your water heater has been consumed. Replacing your water heater's anode rod could be a cheap solution.

I started replacing the anode rods in my water heaters with Corro-Protec powered anode rods last year. They are about $160-$180 for a 40g tank. Replacing the rod with an ordinary anode rod is much cheaper at around $25. The powered ones are advertised to protect water heaters, like anode rods, and eliminate sulfur smells. I've never had a sulfur smell, so I can't say how well they work for that. I was attracted to them for extending the water heater's life. The units come with a 20-year warranty on the anode rod.

It's best to do the replacement when you still have anode rod left, such as in a water heater that is 3-5 years old. After that, the minerals have started attacking the water heater's lining. It is difficult to open the ports to install new anode rods, and the difficulty increases as the water heater ages due to corrosion.

Corro-Protec has 2 models, one for dedicated anode ports (AO Smith) and one for inline in the hot water line (Bradford White):

https://www.amazon.com/s?k=powered+anode+rod&crid=4OB7OC...

I don't think you can charge the prior tenant for the oven if it is malfunctioning unless the prior tenant actually broke it. It's not their fault if it just wore out.

Try wiping the food off the blinds. You might not need to replace them. I wouldn't charge the tenant if all you need to do is a 30 second wipe. Otherwise, take a pic of the blinds damage, price new blinds and make the deudction.

I would recommend you use one if you are not experienced with real estate sales. An experienced investor might be able to go without one without losing anything.

The main problem I would be concerned with is both you and seller are inexperienced and neither one of you knows how to properly document and execute the transaction. For example, a realtor will use a standardized form for your state the firm always uses. The standard purchase and sales forms cover most of the main concerns in a transaction. Would you and Seller just pull something off the internet?

An agent can not only give you advice, but usually has connections to good contractors. Do you need a home inspector? How about an electrician, plumber or bug guy if the inspector finds something?

An agent can also help you work through issues at closing. What do you do if your wire didn't go through right or Seller didn't do whatever they were supposed to do? Can Seller just take your deposit if you don't perform exactly as expected? Not necessarily, but what if Seller already has it because you gave it to them with your offer? Hmmm..that wouldn't be good.

There are just a lot of things that can happen in a real estate transaction and not necessarily bad things. I would go with an agent if you think you would want some help.

 "This site can't be reached."

I would require the prospects to apply before negotiating rent. Are you early in the listing, or has it been out there for a while? I would respond with something along the lines of, "We expect other applications coming in soon..." If this is the first week of the listing. Otherwise, if it's the 3rd month, I might jump into the discussion.

You could ask them, "Why do you think the rent should be lower, besides that lower is better for you?" That's also a good time to share the comps as mentioned.

I often offer a rent discount for a 2 year lease. It would be something like $2,000 for 2 years or $1,950 for year 1 and $2,000 for year 2. I don't know that I would do that for an 18 month lease.

I actually like leases that end in the Winter, in particular Dec 31. That is when I time my rent increases too: Jan 1. Nobody wants to move then. So far, it has worked out, but I wouldn't want a vacancy then either. My leases go month-to-month, so it's not a big impact for a Jan 1 increase. My thinking is that by the time April comes around, the tenant has gotten used to paying the increase and is less motivated to move.

Check your lease to see what Landlord is entitled to when Tenant dies. In PA, it is 2 months rent assuming the property is occupied by the estate for 2 months. This is the amount of time your Tenant's next of kin or executor will have to clear out the property.

You should get the grandsons on the lease if they are living there. Have them apply and see if they can afford to stay if their grandparent dies. It will be good for you to have a 1 year lease with them there and able to afford it; otherwise, it could be a headache if they have nowhere else to go.

It looks like your numbers work if you can get them.

Your lender is very unlikely to give you 100% LTV and 12%, especially on a property that transacted at $58k, appraised at $67k and you are asking for $75k, assuming you haven't made any improvements to the property. You might be in the 16%-20% range or more since you have no skin in the game nor experience.

Check to see how long the tenant has been there. Section 8 tenants tend to be longer term and they tend to leave a place needing a lot more work. Make sure you have a strong reserve. I am restoring a 2BR now for about $20k. They left it filthy. Also, be aware of the recent cuts to Section 8 and how your tenant might be affected. There are also some new Section 8 regulations taking effect later this year that might cause you to do some work.

You will probably get a better deal if your partner has a 401k and can take a loan from it. Loans can go up to $50k depending on the plan and the interest is paid back to the borrower.

@Eduardo Cambil

You posted variations of this question multiple times. I think you got good advice (don't do it) and you are doing it anyway. Has anything changed in the past few weeks besides you have a property under contract possibly without a clear way to pay for it?

You might be able to get more help here if you share your annual revenue and expense model for this property. Assume you get the financing you are looking for, but don't be in a fantasy.

After you do all of that, does your model show a DSCR greater than 1 (revenue / expenses)? If not, you probably never get a DSCR loan and will be in trouble with your HML in 6-12 months.

It is not uncommon for an employer to ask about outside business interests. They are looking for conflicts of interest.