All Forum Posts by: Jack Barkow

I'm just curious what everyone is doing with snow removal. Is there a certain depth of snowfall that you wait for to pay/DIY snow removal or do you do it regardless?  For example half an inch in Chicago like 20% of people clear their sidewalks and it just turns into slippery ice.  I could fall and sue them I guess, but it hasn't happened.  For my personal stuff is it just not worth the risk to wait for half an inch to melt/get icy and just spend the dough to have it done for every snowfall?

I fired my property manager last Friday.. September 6th. The management company has been lacking in several areas, but the biggest is not doing maintenance in a timely manner and not filling vacancies (I'm talking 4 months vacant and the advertisements have no pictures).

The owner of the company emailed me on Saturday that they would not return any security deposits until all final bills had been settled (~$9k) and that they would no longer honor their prior promise to "chip in" or cut the cost of a roof repair job they were going to do by 1k from 3200 to 2200 because it was a courtesy to me as a client and I am no longer a client and thus they no longer are obligated to offer me that price.  I would not have agreed to have had the work done for 3200 and this was a shock to me (that work was completed in mid August and I wasn't billed for it yet).  On Monday they had already taken all utilities out of their name (water, trash, electric, any vacant unit's gas meters etc.). luckily the new manager was on top of things, but I had never seen this manager work so diligently until it came time to making the transition difficult.

I wrote the owner about the roof and she told me in email "If you want to turn this into a legal battle I'm fine with that too" in part of their response on this.  She agreed to send the deposits but said it takes time and will be done by Friday.  Also said I should get what I need out of Buildium by then because my account will be closed.

Today she added in all the bills she was alluding to, which came in at $7,900 in September.  one was a double bill at $3,200 for a past job, one was the $3,200 roof, one was $1,500 (not approved to have that work done in writing and per management agreement all work over $400 must be agreed to by the owner prior to execution).  The other fees are all miscellaneous 40, 50, 60 dollar even number amounts for miscellaneous things like changing a lightbulb and crap like that.  Theres also a duplicate trash bill at like $60 that I was hoping to have removed, but I don't think it is happening even though the attachments to both bills of the exact same amount are the exact same invoice date and price.

I'm just looking for advice since she is clearly playing hardball and seeing what she can get away with during the transition with regard to betting that I'm either a pushover or won't bother with legal action over only a couple grand.  I am not sure if it matters, but she is sitting on around 8k in rents from September and I am sure she will use those rents collected to cover these new "bills" and pay me out whatever is leftover.

Thanks,

Jack

I'm no expert, but I don't think having an S8 tenant should make any difference.

I would recommend to buy in your personal name since that will give you the best terms on your loan and then to transfer title into an LLC or land trust depending on what your LLC structure looks like. As far as insurance you want the general fire/etc insurance as would be mandatory per the mortgage.. You probably want a general umbrella for yourself as mentioned above, and then I would get a general liability policy for the property.

Congratulations!  What an inspirational story!  Four properties (7 units) in 90 days is truly impressive.  Keep that momentum going!

thanks.  So I would just get a contract from a title company? 

4plex is good it just depends on the deal.  I don’t want to exclude myself from a great deal just because it’s 5 vs 4 units if the numbers work.

For 4 units you need 75% ltv and on a delayed financing loan product you need 70% ltv. I think that the 20% is only for SFH or duplex.. I'm not sure though since I stay away from SFH.

@Seth Williams  That is really cool!  I like the idea of having one payment rather than two (although in the grand scheme of things it doesn’t really make a difference).

Your explanation makes perfect sense.  Very well said.

I’ll have to see what I can find as well as hopefully longer amortization periods.

@Seth Williams thanks for the feedback.  That sets things much clearer.  What kind of rates are you getting? (Just for reference)

So you’re able to use equity on other loans as a down payment?  I’m assuming you’re doing some sort of recourse loan then?  Would that affect your ability to refi other properties?

I’ll ask around locally.. I’m sure I can find someone.

The title is a bit open ended, but what I am referring to is the following as mentioned in the BP podcast on many occasions.

Browsing unit listings in my target area and cold calling the person that listed the unit when it seems like a self-managed property.  Going from there offering to buy the property and solving their problem of not wanting to be a landlord.

Assuming that the owner is interested in selling and after a walkthrough of the property a price is agreed to.  Then what?  Can I just use a purchase contract from the fileplace on the site?  Do I just pick wherever I want to do the closing at and be done with it?

Up to this point I have worked with an agent that has their standard offer contract that they use or wholesalers that send out the contract that they want used when sharing their off market deal so the DIY approach is new to me and I don't want to make a costly mistake.  Any advice is appreciated.

I'm currently looking at deals in my market that are 5-10 units. Nothing wild in comparison to the 50-100+ unit deals being discussed, but still exciting for me. The financing aspect of these deals is usually killing my numbers. (30% down and 20 year ARM).

Is 30% down pretty typical on lower value and lower unit deals or can I find better? (20% or even 25% makes the numbers much more appealing for the cash outlay)

Are 20 year ARM loans the standard or do some lenders offer longer amortization periods and rates that fluctuate less on these kinds of deals?

I'm just looking for some general advice. I haven't done anything more than 4 units so this is different for me. Ideally I would have the equity in a primary residence to do a HELOC.