All Forum Posts by: Jared Baker

Foreclosures are great in my opinion, but you need the cash to typically buy them outright or get a conventional loan if they are liveable. Creative financing isn't always as obvious since banks own the property. Foreclosures offer good BRRRR properties as typically they are run down and you can add some decent value, but you just got make sure all your numbers work out and you have the cash to rehab.

@Diego La Rotta as the contract says, tenant pays for the first $100 of repairs.  From my reading, this is put into contracts as a way to get tenants to not do damage or treat the place poorly as they will be on the hook right away for more money.  I believe I have similar wording on my contract for an inherited tenant.  From what you describe above it sounds like the tenant is just being lazy, a sink is not a garbage to throw stuff away in.  I would send them the bill.  Explain, if needed, that what happened is not general wear and tear or the sink being faulty.  If you needed you can point out on the agreement where it states they are responsible for the first $100.  I would imagine you are going to get push-back from the tenant but that's the way it is sometimes.  That's just my two cents.

@Alex Olson @Theresa Harris Unfortunately I do not have any equity.  The Triplex is the only property that I own and I just bought it in August.  

Hello BP.

I've recently come across 3, 4-unit buildings that are all in need of some updating and bringing up to market rents.  Since I recently purchased a tri-plex(conventional mortgage) I only have about $20k in cash left over.  I've asked the sellers if they would be interested in seller financing but neither of the owners wants to because they are older and just want to cash out.  Any thoughts about how I could go about funding these properties?  Each building is roughly $225k, I should be able to get about $750 for rent in each unit, right now they are only renting for about $600-$650.  I'm anxious to expand my portfolio but I'm not sure what type of funding that I would be able to use to acquire these properties.

Thanks for the response Charles.

Today I will be getting some of the information together from the seller.  Once I have that I will be getting in contact with my lawyer to discuss details of the contract and starting to look at contractors for specific work that would be needed.  It would be great if I could get this to work because this would be the tipping point for financial freedom for me.  This would allow me to show up to work after closing because I want to be there, not because I have to.

If anyone else has thoughts on being "ready" vs "leaping" I would love to hear some insight from others.

Hello Nancy,

Newbie here myself, but recently purchased a triplex and looked at a few other house that need some foundation work.  I definitely would not take the word of the seller when it comes to costs.  Depending on how much time you have it would probably be best to get estimates from the necessary contractors.  I was able to get some pictures through my walk through's and send them to recommended contractors and they were able to give me some ball-park pricing that made sense to me.  If it was me I would get my pricing and negotiate the pricing down to make the numbers work assuming worst case repair situation.  I see in one of the pictures that there could possibly be water damage behind the wall.  Without opening that up its really hard to put an estimate on that.  

Not sure where you are from but that looks like more than $7k worth of work if done by a professional.

As far as the seller putting money into escrow, if the repairs exceed the $7k I believe they don't have to contribute anymore to the account (I'm not sure how this would all work).  I would rather negotiate the price down and depending on financing possibly just warp the repairs into that or if you have the cash, just pay for that out of pocket.

That's my two cents.

Hello BP community.

I recently came across 2, 4 unit buildings (8 units total) that are for-sale and the pricing looks very good.  Doing some quick math the asking price is lower than what is should be which leads me to believe there is something wrong with the buildings and will need some work (which I am ok with).  I just purchased a 3 unit building in August of 2019 so I am still in the process of getting this fixed up and rented out.  Because of this purchase along with the asking price of the 8 units I would not be able to use conventional financing to get this because I don't have $100k+ down payment.  My thought here is to approach this with seller financing/land contract so I would pay the owner X amount for 5-7 years and then I should be able to get a conventional loan on the place. (I still need to do the math and work out all the details)  I will need to get the last 12 months of rent/expenses and some other information from the seller, but my big question is how will I know if I am ready to take this on.  This will be a big investment for myself along with the burden of the payments and managing 8 units (assuming the numbers work out it should be fine).  Is there a "right time" to make the next step or is it more of a "leap".  The other thing is I currently only have $17k in savings, it grows every month though.  Based on my math (again I will need info from the seller to confirm) using the 50% rule by year 7 I will net over $250k (gross income is over $500k)  which should be plenty to provide the down payment and prove to the bank that I can afford the mortgage.

Thoughts????

Thanks BP!!

Hello BP Community!

I've took a peruse through the search function and didn't really find anything applicable to what I'm trying to figure out.  I did determine there seems to be a need for Handymen however.

I have a full time job now, but I really enjoy working on smaller home improvement projects.  Last year I put myself out to my community offering handyman services and was very upfront about what type of work I was capable of.  I received some very positive responses from this.  When talking with people they would ask about my experience and I would inform them about doing stuff for myself and I'm looking for side jobs.  We would start discussing the job and right at the very end people would ask if I had a business license and insurance and I would say that I do not and people would then say they would think about it and get back and no one ever would.  

I understand the comfort of having someone performing work having insurance.  I've contacted my insurance provider and have done the math, unfortunately with only wanting to do the small jobs on weekends and after work (and on my schedule) the numbers just don't make sense.  

Does anyone have recommendations on how to do handyman work on the side without being limited by the insurance issue?

Is there a way to find work where people will be fine with not having insurance?

Hello BP,

I inherited a tenant when I purchased my triplex.  Tenant left 1 week ago and left a bunch of "stuff".  Before doing anything I texted the tenant asking when he was going to be out since there was stuff left behind.  He replied and said he was out and that I could "keep" what was there.  Unfortunately the previous owner does not have any of the paperwork for the tenant and whenever I asked the tenant about things he would always say "that was left from the previous person that lived here".  It didn't look like a lot but we ended up have 20 bags of garbage, had to wash the floors and I will have to remove the sink and it took me and my mom about 6 hours to get it all cleaned up.

• 1. I don't believe him when he says that the stuff was already there when he moved in, but even if it was the case, is the tenant still responsible for cleaning everything out of their space?
• 2.  Since I don't have any documentation of the place before he moved in can I withhold anything from the security deposit for the removal of garbage?
• 3. Is it worth it to withhold anything?  Yes I spent a few hours and I have to make a few trips to the city dump(Doesn't cost anything and its a 2 minute drive) but the tenant is difficult and I wouldn't be surprised if he made a big deal about it and wanted to take me to court over it.  If that is the case it is going to become very inconvenient for me as I'm going to have to take days off I don't have.  I bought the place knowing that I need to redo the entire unit and clean things up.

People have told me I need to establish my own policies and should adhere to them.  One of the policies I'm going to enforce is the cleanliness of the place, but should I try to enforce this policy after an inherited tenant left and I never really discussed it with them in the first place?  It will definitely be something that will be gone over with the new tenants but it seems hard to enforce now.

Hello BP.  Not sure if this is the right place for this post or not but seems close.

I just bought my first rental property, a triplex.  It needs some work, but one of the units is already rented so I'll have that income and I plan on renovating the other two units and getting those rented out asap.  I will be living in the property as a owner occupied.  So I have a two part question here regarding how I need to keep track of the money.

Question 1: Do I need a special account for my rent money coming in?  Since everything is under my name, rent checks are made out to me.  Since I will be using the rent to pay the mortgage, do I need to have a special account, separate from my personal, where money comes in to and then I write checks from that account as well or can it all be just put in one personal account? (I also have to chip in a small amount from my personal accounts to cover the mortgage) 

Question 2: What is the best way to keep track of the rent coming in and the expenses going out?  I plan on finding an accountant this year to help go through everything, but is a simple excel file good enough or do I need something more robust?

Thanks BP :)