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All Forum Posts by: Jonathan G.

Jonathan G. has started 21 posts and replied 95 times.

Post: Multifamily property questions

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

A quick rule of thumb for determining if a deal is good is to apply the 1% rule. For example, if the property costs $500,000, you'd ideally want it to generate at least $5,000 in rent per month. This rule provides a fast way to decide if a property is worth further investigation. For instance, with a property purchase price of $850,000, you'd want rents to be around $8,500 a month, and so on.

Post: Storing Bank/Debit Info Multiple Accounts Safely

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

Hi Bethany,

We have a series LLC too. We do all our banking from our front facing LLC- all operations and property management function out of that LLC for all our buildings. (We don't have a separate account for each building). We have one bank account that all income comes in and all expenses go out of. That is how our lawyers advised us to do it. We just track the P&Ls on the building separately through our property management program. Hope that helps and makes sense!

Post: Triplex Investment Property Financing

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

I would definitely talk with @Jerry Padilla and see what he can do through Freddie/Fannie for a 30 year fixed. He definitely know his stuff. He helped me get what I needed on financing a Quadplex I recently built with a local bank through a construction loan, and I am closing on Tuesday into permanent financing! They wanted 75% LTV and I have a 30 yr fixed rate at 4.875%.

@Eric Dame, you said in your above post you are looking to real estate for passive income! So well said and we all are! But what better way to have passive income, then along with a good fixed rate! Plus your DSCR and cash flow would look so much better on a 30 yr fixed. This extra cash flow could help with your DTI on future deals, rather then hurt you with not enough 🙁.

If your credit is above a 720 or 740 and you have 25% down, you should talk further with @Jerry Padilla and see if he can get you locked in for 30 years.  You may need to buy the rate down for a point but having it locked, and especially not having an interest rate crystal ball, hahaha, I would definitely go with the safer more cash flow scenario!  

Post: Tenant asking to break lease!? What do I say??

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

Just wanted to update everyone!  I renegotiated with her to $2,500 with us allowing the deposit ($2,000) towards the final amount.  She jumped at it and is going to give me an additional $500 and also vacate before the end of the month as well as make sure all is clean and will allow me to begin showing.  I feel that I was very lucky in this situation.  

I believe some of it was luck, but on the other hand it is how you structure your lease from the beginning, how you set the tone with your tenant from day 1.  Do you let them walk over you or do you hold the line on the little things, so that when big things come they know where you land?  Keep track of all paperwork and create a paper trail.  Then the utmost important thing, NEVER show your emotions or get emotional with your tenant.  Yes they are breaking a lease, but always always try to think WIN WIN, walk in their shoes while at the same time do not get walked over.  Stay professional, positive and upbeat and in the end you mitigate your risk of having a disaster!

Thank you for all who chimed in and gave guidance!!  Much appreciated!

Post: Tenant asking to break lease!? What do I say??

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

@Joe Splitrock please see above for her response.  Thanks again!

Post: Tenant asking to break lease!? What do I say??

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

@Joe Splitrock ,@James Marshall ,@Mike Miller ,@Kevin S. ,@Lynn M.

Ugh.... her response.  Any thoughts.... Let the fun begin lol.

Gotcha. Well that certainly seems fair, and I understand how our lease was worded-thoroughly. I would love to take the second option, as I’m not excited to do damage to my credit, but I’ve lost my good paying job and will be making half as much when my new job starts (in two weeks). I could definitely give 27 days’ notice (actually from yesterday, 28) and assuming EVERYTHING in the house is in acceptable shape, forfeit my $2,500 deposit to you. I have no money to buy out up front even though I realize that would benefit me.

My only other option would be to face the consequences of civil court and those thousands of dollars plus court fees would definitely show on my credit. If that happens, I guess I’ll have to put you through the entire eviction process which means I could buy a little more time here, as my rent wouldn’t be late until May 2.

I’ll talk to some friends and see if they have any ideas.

Thanks for the offers,

I Just got that in response to my above link that I sent her via email.  What do you guys think now...   The problem is, she did not give me $2,500 security deposit.  She only gave me $2,000 and I have records signed by her for that amount.  Also there is about $300 - $500 worth of repairs for the house minus any cleaning and normal wear and tear.  So that would eat into that security deposit.

How would you negotiate going forward or would you give it a little more time before responding for her to let what she said sink in....?

Post: Tenant asking to break lease!? What do I say??

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

@Joe Splitrock,@Jim D.,@Account Closed good to see you on here!  Keep in touch!

Post: Tenant asking to break lease!? What do I say??

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

@Jim D. the lease I received was from BP and was for the state of Texas.  So can I negotiate an early termination fee even though there is not one listed in our current lease by simply adding an addendum and having us both agree and sign it?

Post: Tenant asking to break lease!? What do I say??

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

@Ronald Rohde, I understand but If you look at the lease she signed, it is my impression that if we do not agree on an early termination of her contract according to the texas lease she signed see below, 17 a. states..  

Tenant shall be liable for damages to Landlord for all loss sustained, including, without limitation, the balance of the Rent and Additional Rent due for the remainder of the Term, court costs and reasonable attorneys’ fees;

To me I interpret that as, I am going to retain and use your security deposit towards what loss is sustained  as far as money owed to me for her not completing the lease and signed contract.  

Also if you look at section 4. Security Deposits of my lease it states in there ...

Landlord may retain the Security Deposit for nonpayment of Rent or Additional Rent, damage to the Premises, replacement of damaged or missing items on the Premises, and/or cleaning of the Premises beyond normal wear and tear, to perform any obligation Tenant fails to perform under this Lease, or in connection with Landlord’s remedies under this Lease

Again I would interpret that to I could retain the security deposit because of the obligation the tenant failed to perform in finishing out the required lease dates.

What you posted above is true but states... A landlord who in bad faith retains a security deposit.. is liable.  

My question would be, based on what she signed and agreed to, and what I laid out above would I still be retaining her security deposit in "bad faith"?

Now if we work out a deal, that we both we agree to, for example an "early termination", then I WOULD NOT be able to keep her security deposit.

Post: Tenant asking to break lease!? What do I say??

Jonathan G.
Pro Member
Posted
  • Investor
  • Tyler, TX
  • Posts 96
  • Votes 22

@Account Closed

If we were both to sign a texas lease addendum that allows for early termination and I wanted to add a reletting fee $1,245 as well as a "FEE" equal to one or two months rent ($1,465 - $2,930) for letting her get out of her 18 month contract, which she is only 6 months into, would that suffice what she wants as well as allow me to get what I need.  I would think that would be fair because based on my lease, attached above she is on the hook for the other 12 months of rent, which equals $17,580.   Now we all know I won't get that, but we also know no tenant wants to have that following around their credit or having to go through court proceedings.

I am in the process of getting this current property out of a construction loan, this is a new property and trying to get into a Freddie/Fannie product with permanent financing.  It could take me up to 2 to 3 months to get her unit rented possibly.  I am listing the property myself in all outlets for potential renters, I am not using an agency.  

Or ANOTHER OPTION would be for me to negotiate just a reletting fee ($1,245) with the understanding that she is responsible to continue to pay all rent and utilities until I get a new tenant in place.

I know this may seem harsh, but If I were to ask her to leave early and the roles were reversed, she would raise holy hell on me.  If I had a bunch of tenants in the wings I would be more open.  Just that I am in a little of uncertainty with all that is happening at the moment.  

I know the goal here is to negotiate and create a win win, which is what I need.  But she has to put some skin in the game if I am going to give her a free pass on $17,580 (remainder of agreed upon lease).

Any thoughts would be much appreciated and welcomed.