All Forum Posts by: Jim Hern

Wesley: great message....that process works the best (in my opinion). Thanks for taking the time to detail it!

The decision you face is almost the same as the one I had about two years ago...right down to about the same dollars involved. I decided to sell and used the cash to go from one (that I sold) into four rentals and almost tripled my net income from what it was with the one. And, in doing this, I traded out a property which was in a 100 year flood zone close to the ocean, for other properties which are in much less risky locations. Mind you, if the property I sold was in a location where I could’ve done well with a vacation rental program, I would’ve kept it. Definitely worth considering that before selling. But in hindsight I’m happy with what I did. Consider too that we’re still in a seller’s market...ask yourself if you think you’ll be ok with having the duplex down the road when the market swings into a less favorable position. Don’t forget about using a 1031! Good luck!

I like having fences at my rentals since it’s attractive to prospective tenants wanting privacy and, since I allow pets at my rentals, fencing is seen by tenants as a plus. I tend to be able to charge more for tenants with pets since it can be hard for them to find rentals that accept pets. Also - the fencing reduces the chances of trespassing into my property. A neighbor has had stuff stolen from his yard (with no fence) and, knock on wood, I never have. Sounds like you might need to find a more economical person to maintain your fence!

Wayne: thx. I’ve been stumbling through the tricounty websites trying to figure how to do thorough searches. I’m getting better at finding liens but not perfect. Haven’t figured out how to quickly locate mortgages. Thanks for any tips...

I have typically paid a vendor to search for liens, mortgages and other encumbrances on properties I’m looking to acquire...but it can get pricey when a lot of properties are being considered. Also I found out the hard way that it’s really smart to redo a lien search the day before (or on the day of!) closing. Advice please: how can I do these types of due diligence searches myself on properties I’m considering? Most of my investing is in south Florida. Thanks in advance!

Kevin: In some ways you sound like my attorney. I very much appreciate your thoughtful advice and am glad to see consistency! I like the strategy and will followup.

Thanks. Well - what you’ve indicated is consistent with what I’ve found so far. To confirm: I’ve found commercial interest rates of at least a point above residential, 25 year amortization, but only for 5 to 10 years (and then I have to refi...yes, I buy and hold for a long time). Though it makes me feel better that I’ve (probably?) not been missing something, it does make me wonder if there simply is no better overall approach than holding RE assets in my name to get better lending terms, and loading up on umbrella insurance. The prospect of getting loan terms that don’t come close to what I can get as an individual in exchange for getting to own through an LLC just doesn’t seem to be worth it. I just really don’t like holding RE in my name (for privacy and risk management reasons). I’d very much value any feedback you might have.

I’m looking for advice on efficient steps to take and what I can realistically expect to see in my process to find a local South Florida lender, for lending to an LLC on SFHs for my buy and holds. I’ve had no problem finding good lenders who will lend to me personally...but that’s not what I’m looking for now. I’ve been talking to a few local banks and it’s a mixed bag of responses: in general, they’ve offered very short (5 to 10 year) term loans for higher rates. Not interested in those. So far, it’s been frustrating and time consuming - several dead ends. Perhaps I need to improve my identification process? Thanks in advance for any advice you can provide!

I’ve accepted marginally risky tenants when they came with a very solid co-signer and it’s worked out. I check out the co-signer as carefully as I do the tenant. Regardless, I wouldn’t accept the tenant if they have a habitual spotty record. Good luck!

Just handled two houses who had long term tenants with way too many cats (I inherited tenants from former owner). I’m extremely allergic, so it was a good test. At the start, I couldn’t be in either house for more than 15 minutes before I was sneezing like crazy. I learned that cleaning the central AC (vents, ducts, coils) made a huge difference (and changing the filter a few times over a week). Next most important was a thorough clean of the tile floors, and all walls and doors about 2 feet up from the floor. Painting the walls, doors and baseboards (Kilz first followed by a good quality paint) ensured the odor was gone and no more sneezing for me. In my two examples I didn’t have wood or carpet flooring....if I had, then probably I would’ve had to address that too. Good luck!