All Forum Posts by: Jill F.

I have found that I too am also in a place in 3-7 years where I would meet the @Joe Villeneuve criteria to sell. It took me a while but I do finally understand why that makes sense. But I have questions I'm hoping you'll entertain.

I have a group of properties that I've held for five years and my low interest rate is resetting this month and I'm planning to do a cash out refi prior to a sale for a couple of reasons:

1) Its easier to get a deal under contract if you don't have to make it contingent on a sale or if you don't want to risk paying capital gains on the sale if you can't find something suitable to buy. In this case I've found a 20 unit to buy and I wont be able to do the deal if I try to sell first.

2) I want to invest in a new company with different ownership with part of the money from the refi/sale property and if I sell straight out I can't do that without paying capital gains. So I am planning to take out as much as I can with a refi and then I'll sell in 9-12 months when the new property is stable to get out the remaining equity.  The plan is to trade my appreciated, nicely renovated one bedroom properties up to newer (still value add) two bedrooms in a better neighborhood with higher rent potential (in the original company)

3) Because we renovate well, the appreciated, renovated properties that I have to sell are going to have lower maintenance costs than anything that I can buy so a split refi/sale with two purchases buys me time to stabilize in renovated in chunks.

Do you think this is a reasonable thing to do in this case or do you think this is a bad idea (and why)? Also, where do you find these 20% DP loans? I always ask and sometimes the banks say yes but usually the small banks that will lend to us want to do 25% down with 20 year amortization. I've looked into the Freddie/Fannie multi-fam financing but with a 20 unit deal I'm just on the boder of qualifying on loan size and cash reserves.

Right now I've held my longest tenure properties for 8 years and I'd like to sell but I really would like to first have something else to buy plus I still have two years with more favorable interest rates than I can get right now. Do you recommend selling and just risking the capital gain tax if I can't find something good to buy?

@Nathan Gesner I know! This morning I evicted an inherited tenant in a building that I"ve now owned for just over a year.  I did public record searches on all the tenants while I was in the process of buying the building just so I'd know who I was going to be dealing with. The guy I bought the building from rented to said tenant WHILE HE WAS IN THE PROCESS of being evicted from another property.The tenant was a borderline hoarder that quit paying rent in December and then left the place a mess. The landlord across the street rented to him AFTER I was granted a writ by the court and just two days before his move out date with my eviction easily viewable in court records???!!!! It's baffling. It's probably not going to end well for that landlord.

For me, the time to buy is whenever I have the money and can find a deal in a decent area that I can make cash flow in the relatively short term. I bought my first investment property in August 2016, closed on a property Jan 10, and have another deal under contract now. Moving forward.

 made me laugh. 

@Marcos Carbi  If you want to allow a payment plan, Tell them this is the best I can do:

Pay $xxx cash by tonight at 8pm for November's rent. and then beginning Monday Jan 20, pay $450 each Monday (in cash? deposit to account xxx? by money order? cashiers check?) until past due balance is paid off. I wouldn't take checks, zelle (or similar) or epay in this situation.

You are unlikely to get your money back. Cut your losses the first time they miss a payment and start the eviction process.

You'll probably need to start the eviction process Monday morning.

Unless you get a summons from the court, you don't have to address whining. Decide what you are going to do then tell them what YOU are going to do. Then they'll do what they're going do. Since they say they don't want to leave, I wouldn't try to force them out until the end of lease term if they are paying (it might look like retaliation) but if you really don't want a cat you could.

Here's what I would do:

I would tell the tenants that they need to address their issues with the renovations with their own insurance carrier not yours. Their insurance will call you if warranted. Also get rid of the cat or you'll be charged an additional $xxx fee and an extra $xx/month. Have a nice day.

If they get a lawyer, direct the lawyer to your insurance agent.I'd be really surprised if you got a summons or heard from your insurance company.

ALSO, i would non-renew at the end of their lease term.

We just this week bought a 6 unit building in a top notch suburban school system for $615,000 with gross rents of $4615, but to make the deal cashflow (barely), had to raise the gross monthly rents to $6570 on 4/1. We'll lose money for 75-90 days but the new rent is market so some will stay and not forcing people that can't afford it to move in the middle of a very cold winter I think buys a tiny bit of good will and is the decent thing to do. We will then, as the units turn over, get rents up a good bit further with additional design improvement renovations and hopefully reno into lower interest rates when they drop or at the very least in 5 years on our 20 year we'll have paid off enough to refi into a smaller loan.That is the only kind of smaller deal we can find in neighborhoods where we want to buy now.

Most people suck at painting.