All Forum Posts by: Jennifer C.

Following back up on this - thank you to everyone for the advice.  Truly appreciated.

I decided against the corporate rental as I felt like doing this from afar just wasn't smart for me.  I talked to the owner who decided he would like to rent it personally and we were moving through the final stages of the process and now he has gone dark on me.  I think it may be for the best!  Now just fingers crossed for a good applicant in this next round.

Thanks again everyone!

I am a newbie to anything other than single family and I need advice on analyzing a potential buy that I just saw this morning.  Here is a general summary:

- Fouplex built in 1920 in Maryland

- New siding, windows, gutters in last 3/4 years

- Roof in ok shape.  Plumbing and electrical seem ok.  More on all of these to be determined at inspection.

- No noticeable leak/plumbing issues (from visible inspection of each unit)

- 3 - 2 Bedrooms

- 1 - 1 Bedroom

- In a rough part of town so top rents are not an option for this place regardless of condition.  Rent could be raised some however and with reconditioning the inside they could be raised a little bit more 

- All units are currently rented and there is a good setup of automatic payment and none of them have been late on rent.  There are a range of tenant lengths:  several years, a couple of years and two less than a year.  She has very short time in between renting and re-renting because she has kept the rents relatively low.

- Inside needs works… Two of the 2BDR units need cosmetic overhaul… kitchens, baths, flooring, paint.  The other 2 units need mostly fresh paint, maybe upgraded kitchen/bathroom floor and upgrade bathroom vanities and toilets.  My contractor told me $20K - $30K to completely overhaul each 2 Bedroom.  This seems high to me but what do I know?

Numbers:

- 2016 Assessment $213,800

- Total Monthly Rents $3,380

- Tenants pay electric and water (baseboard heat)

- 2017 Taxes $2,800

- Current Insurance Paid $1420 which includes a $1M umbrella policy for any accidents etc… 

- Has Lead free certificate and has existing city certificate for inspection for rental properties

- No HOA

- How much should I build in per year per unit for expenses?  Including outside yard maintenance of $90 a month, I was thinking $10K total ($2500 per unit per year) just to make sure I am covered.

-   I would probably do a 30 year mortgage on it… I can put whatever amount down I need to.  Less is obviously better.  

My question is… what is the MAX I should pay and any ideas on a good strategy for the offer?  I have run different calculators and spreadsheets and I am getting hung up on improvement costs over time and how that will impact my overall investment return.  

The seller is an older woman who wants to get out of real estate… I know she is willing to cut a deal and she knows she is asking way too much for it.  

If I have to sink in $20K - 30K per unit to really upgrade them, I am having a hard time offering more than 300K at the very top end for these.  I would love to walk in with a firm $250K.  Am I crazy?

Appreciate any and all inputs.

Thanks!

Thanks for the great replies everyone!  A few comments after thinking through all of your suggestions:

- I am going to try and have an honest conversation with them.  I am using a local property management company (that I have had good experience with) to find the tenants and to manage the showing/screening process for me before they hand it back over to me to manage.  Charging a higher rent is definitely something I will pursue.  Any advice on what % more I should target?

- I have a dependable local handy man that will check on the property and I go there about twice a year.  My lease has a quarterly inspection clause in it.  

- I love the short term lease idea with the automatic renewal idea… I had not thought of that idea!

- Assuming they would be dependable and good tenants, my only hesitation with the company Airbnb idea is that the neighbors may not be very enthusiastic about it. There is a HOA for the neighborhood and they are a bit of a watchdog to say the least. Although it isn't against any of the HOA rules I also don't want to become 'that house' in the neighborhood if I have another option.

- Question - if an eviction process were needed for some reason, how does that work in evicting a Corporate renter that isn't physically in the property?  Do I ensure that each resident is on the lease and not the corporation?  And then the eviction is just on that tenant?  I have zero experience with evictions.

If all else checks out, I may pursue the short term lease with automatic renewal idea and tighten up my lease language as much as possible to guard against whatever situations I can think of.  

Thanks for any other feedback you can think of!

Hello!  My name is Jennifer and I am new to Bigger Pockets.  I look forward to learning from all of you!  I live in Maryland and look forward to connecting with investors in the area.

I own two properties currently and I am getting ready to re-rent a single family home.  This home is 600 miles away and I manage it remotely.  I have had great success with it for the last 10 years of ownership.  The rent is $2100 a month and it is a high quality property in a nice quiet neighborhood.

I have a weird inquiry that I need help thinking through.  A foreign company has approached me to rent the house.  The application is for one person (it is a 3 BD/2.5BA house) but the company wants to pay the rent each month.  The application is in the one person's name that would be living in the unit and I am in the process of doing a typical credit/background check screening on that person.  

The company is a local LLC that owns three stores in the area. My hunch is that they sponsor employees to come and live and work in their stores but I can't confirm this. The location is an island town… it is not a big corporate business type of area.

I have reiterated that if one person is on the lease that only that person can live in the house.  I also have a clause (lifted right out of Bigger Pocket's The Book on Managing Rental Properties thank-you-very-much) about anyone staying longer than 14 days is someone who needs to apply and be added to the lease if they meet the requirements etc…

My worry is that the company will pay the rent, have this one person on the lease and then will cycle 'visitors' through the property essentially as a short term hotel.  

Question - am I being paranoid?  should I keep looking or take a chance if it all adds up?  How do I better protect myself with tight lease language around this?

I appreciate any and all ideas.  Thanks so much!