All Forum Posts by: Jim Bear

There might be  a creative and ethical way to approach the situation, perhaps there might be e value add that you could do for the property and let your tenant help with the choice of what they would like i.e. a new fridge or new paint (let them pick colors) and let them know that you will be increasing the rent. it might backfire if they tell you they would rather not change anything but if they do then you can raise rents cover the cost of a minor renovation in a couple months and proceed forward from that point with a higher rent and happy tenants and you will have the added benefit if you do something that with increase your property value like new flooring for a small room. I run into the same problem almost every month with a single mother who houses her 2 sons 9 & 13 whos rent is about $250 below market and it's hard, just FYI I have not done so and if I am being honest I probably never will. Best of  luck.

he was completely opposed to any seller financing. He said is was not an option, I was confident that he had not heard the whole story.

@Jonathan Safa, I would love to share the broad strokes, I will however wait to post details until after closing.

The basis of my presentation was being honest and up front. I talked directly to the seller and poured out my situation and aspirations, This will be the biggest deal that I have done by a long shot and that I was looking to be where he is now. I talked about my plans for the property, laid out our 36-month renovation plans and had professional design renderings for the interior and exterior, let him know that I would care for the property and tenants as much as he had. I spoke to the strength of my team, designer, CPA, Contractor all of which I have worked with and known for years. Designer=Wife, CPA=Business partner and best friend, Contractor=local area contact that I have known for years. I spoke to how his seller financing makes him part of the future of the property and the area as a whole. I spoke to and applauded his contributions to the neighborhood and the property to date. The presentation took about an hour all together 

I negotiated with a seller and got him to finance 20% of the purchase price on a 12-unit building and had the Bank do an 80% LTV which allowed me to retain all of my operating capital. It was a little nerve racking but I am really excited about it. It was just confidence and mindset going into the deal coupled with an outside the box financing structure executed with a great presentation plan. Couldn't be more excited about it.

Rik, There are great ways to add value to a unit that will lead to higher rents, external storage for an additional monthly charge or not including appliances as part of the rent and rent them for a monthly charge, really being creative with your investments and letting people ala carte their individual rental experience. I have a 4-plex currently and have 6 available parking spaces for those units so I give each unit 1 parking space and then make the other 2 available for additional rent at $25 a month, I only have 1 rented currently but it is an additional $25 with no additional effort. Just make sure to structure your additional perks in the lease agreement and read it with them in detail prior to signing.

Chris and Gustavo, I am in front of you guys by about a year in the 4-plex FHA route. If you want I would love to talk to significant others about the benefits and drawbacks of multi-unit house hacking. remember that biggest advantage of going from FHA to Conv. is the elimination of M.I. and the ability to transfer the ownership into an LLC, that later of which is not possible with an FHA.

Just wanted the throw out there, currently I am a small time mom&pop investor that is breaking out of my second house hack and on the hunt of my next deal that will take me out into the bigger pastures. I have done all internal Managing and have had a perfect record for occupancy rates. If anyone out there is looking for extra vetting of tenants or a second pair of eyes for a deal I am always looking to network and help. I am a true Real Estate nerd.