All Forum Posts by: Jonathan G.

@Theresa Harris, 

@Jim D., @Michael Ablan

1) My question would be, can I keep her holding deposit on top of what was said above?

I will start searching for a new tenant but she will be responsible for rent and utilities till a new tenant is found and she also needs to keep the premises clean for showings.  

2) Do I tell her, and am I allowed to keep the security deposit?  It is $2,000. I believe that my lease states I can still keep her security deposit. For breaking a lease.  Or is by stating the above/letting her out of the lease constitute that she has finished the lease and I owe her the security deposit?

3) She has a dog so it would be hard to do a showing unless she and the dog were gone.

4) I want to email her something so I have a paper trail but I am trying to make sure I know what I can do before I begin to respond.  Thank you for your help!

@Albert Hasson thank you for that info.  My question wold be, can I keep her holding deposit on top of what you said.  If I find a tenant and she has to pay for rent and utilities until a qualified tenant is in, I believe that my lease states I can still keep her security deposit.  Thoughts?

I just received a text from one of my tenants and I need to know how to respond!

She said, “Any chance you have someone wanting to rent? I wish I taken the 6 mo instead of 18. Things change so much. I’m starting a new job in rusk. Pay decrease. I’m not gonna break lease but if we can work out any way out of it best.”

How would you respond to that?

Background- The property is in TX. She just paid her rent for this month today. She is 6 months into an 18 month lease and this lease is super tight. I will attach some pics of some of the language below.

She hasn’t proved to be the best tenant so I don’t really want her but it could take 1-4 months to rent AND we are in the process of doing a refinance. All the leases have been turned over to the bank. I know if I took her to court I wouldn’t get all she would owe me for breaking it.

Our lease says that she would NOT get her security deposit back for breaking the lease. Should I give her an option to leave early if she paid 2-3 months rent? If I do that does that substitute for “satisfying” the lease and then I can’t get my security deposit from her or can I take both?

Also, since I have received it in text, do I ask her to send the request via email? Do I respond via email? Do I talk to her in person? 

I have attached images of pertinent pieces of our lease below.

Appreciate your advice, thank you in advance! 

@Simon Lopez have you had a chance to check out Bigger Pockets rental calculator?  It is located under Tools, Calculator, Rental Properties.  It is a tremendous resource.  Hope you enjoy it!

@Juan Mendoza  Congrats on getting started in your real estate journey and welcome to BP!  I love this site because there is so much that you can learn from if you are willing to push through and apply yourself! 

In regards to your current deal, I would be hesitant because even though you will be able to afford the mortgage payment and it looks like you have a renter already in place, there is still a lot more that would need to be figured in.

1) Taxes ( Not sure in your area, but you could find out very easily or this may already be included in your payment)

2) Cap Expenditure (Figure at least $100/mo)

3) Repairs (Figure at least $100/mo)

4) Property management (8-10% of current rental rate roughly $150) - I know you may manage it yourself but if you ever decide not to, you want to take that into consideration so you can plan for that.

5) Vacancy Rate (5-10% of current rental rate $75-$150) - even though you have a renter you have to plan for the worst case scenario if something happened to him and you were unable to find someone to rent to.

So if you add the above that is an additional $425-$500 not including your monthly taxes.  So if your payment is $1,100 and you add the above numbers to that, your cost to properly maintain your asset you and your wife worked so hard to acquire, it will put you in a negative cashflow.

Most investors look for at least $100-$300 cash flow after figuring all the above.

I would encourage you to check out Bigger Pockets Rental Calculator and do a little more searching before you jump in to the above deal!

Don't get discouraged and keep on looking at deals!  You will get there!

@Account Closed great info! Just a few things you may want to consider... I have noticed that a lot of successful investors on BP try and shoot for a minimum of 11%-15% Cash on Cash ROI and try to get anywhere between $100 to $300 per door. With $415 for a triplex that would give you roughly $105 per door which is good but I would be a little concerned with your Cash on Cash being as low as it is. You are definitely on the right track when it comes to counting the cost and calculating as much as you can and utilizing the BP calculators and tools. My only advice would be to look at some other deals where your Cash on Cash would be better.

Also I try to budget close to $200 per unit for Cap Ex and Repairs.  So for a triplex I would make sure that I would be putting away a minimum of $600 a month for the 3 units.  You may find that after you make those adjustments this property will not cash flow what you think or need.  It is always best to err on the side of budgeting too much then budgeting too little!

Don't give up and keep looking for the deal!  Good work!

@Khemaro N. not a problem at all.  Good Luck!

@Noah Wood great start!  Being hungry and out of debt is a good start.  I would listen to every podcast bigger pockets has to offer.  This will help get ideas rolling around in your head.  I would then begin to read any of the books that @Brandon Turner has suggested!  https://www.biggerpockets.com/renewsblog/2013/04/14/best-real-estate-books/  Begin to save as much as you are able and maybe begin to look at getting into a duplex and live in one side and rent the other out so you are basically living rent free.  During this time you can continue to learn but also start playing the real estate game.  Then when you are ready you can move out and rent your side out and have a property already cash flowing.   The most important thing to do is LEARN and stay teachable.  Look for a mentor and when you find one, do what he says.  Good luck!

@Marco Marchitelli What are you looking to do with the deal after you acquire the lot and build?