All Forum Posts by: John Gach

@Harish Verma

Here’s a BUMP to this thread.

She provided her w2 and makes 39k/yr, but her benefits are good as she works for the government as a nurse aid.

So it’s roughly $19.50/ hour

She should be able to afford the rent with 1.5 pay checks.

I think she provided the w2 because she figured it would be harder to figure out her wage maybe.

@Bud Gaffney

The mortgage is very cheap and low, but I plan to keep buying properties. So I want to renovate, get market rate rents, so I can talk to the bank and cash out refinance.

@Sunil Kurian

My main goal with the property was to renovate it, have close to market rate rents, so I can talk to my bank, and refinance the loan.

So even if she decided to agree to the new $750/month rent, it would be soo hard to renovate the unit, she has a lot of stuff as she lived there for so long.

I would also be converting the attic which is mostly finished, to a 3rd apartment. So by the time the building is mostly renovated, I bet it would be almost worth 200k. I can talk to my bank, refinance and pull like 100k out the mortgage to buy more properties.

So she’s in the way, and of course I’m trying to be understanding.

@Wai Chan

Well I’m in an area that doesn’t have rent control yet, and if they do change the laws, it will take even longer to get market rate rents. That’s why the large jump in rent.

But still probably better off getting rid of her.

@Russell Brazil

Yeah I understand it’s almost doubling her current rent, but at the same point she’s an adult, she has to know her rent is literally the lowest you could find anywhere, eventually it was going to go up. And it should have been increased even 20 years ago, not probably to $750, but more than $400, maybe the $500 she’s trying to negotiate.

So I bought my dads property, it came with a tenant who has lived there since the day he bought it 30 years ago. He never raised rent, it’s at $400/month. The unit isn’t very nice, she’s a smoker and there’s nicotine on the walls so I can’t even slap some paint on the walls to make improvements. Besides that it needs a lot of cosmetic repairs. Not a huge deal as atleast the property was bought at a good price.

Luckily the tenant is month to month, she supposedly is a nurse, which she should easily be able to afford more rent. I figured fully renovated apartments around mine would be around $1,000/month. So I sent a 90 day notice stating the rent will be $750/month. Would be hard to find an apartment for less than that around my area now a days.

She replied that she can’t afford that much, and that she lives here for a reason, and that she could do $500/month.

I haven’t replied yet because I’m trying to figure out the best response.

I know she has a boyfriend, so maybe I could tell her to have him move in if he fills out a rental application, and passes background checks.

Or maybe she could apply for Belmont or section 8, I’m not sure, although I imagine she makes plenty of money if she is indeed a nurse. Even if she is a nurse and is bad with her money, that’s her problem to figure out.

Any tips on handling this type of situation?

She has a lot of belongings in there, it’s not very neat, and I can’t renovate properly with her living there, so it kinda ruins my plans. I was planning to renovate, get market rate rents, and cash out refinance.

Thanks

@Erik B.

Are you asking more about low flow eco shower heads, faucets, and toilets?

I thought you were asking about that but no one else mentioned what I just mentioned.

But if there are investors who have done these upgrades to save water, I’m curious if the toilets have issues plugging up from less water???

Any experience with that problem from eco toilets?

Thanks

@Tyler Fox

Definitely depends on what you’re needs are as far as living conditions you’re ok with.

Starting off with a duplex or even a tri or 4unit, you can live in it, and probably live for free.

Then you can buy another down the road, and either move into the new one so you can have a smaller down payment, and start cashflowing the first property.

If you start off with a single family home, and plan to live in it and continue living in it as you buy rentals, that would be harder as you need 20% down for a non-owner occupied rental, and also they’ll probably look at your debt to income ratio, which the single family home would be against your debt to income ratio.

I did personally start out with having my own home and buying rentals, which is more expensive but I like to not have tenants living above or below me. I also run a business out of my house so that wouldn’t be good for a tenant potentially.

Hi there, so I own a duplex, a tri-plex and a 4plex.

Some are value add so they tend to have a better cashflow, and then my tri-plex is mostly turn key.

My plan once I have them at market rate rent, and fully renovated, I planned to cash out refinance the loans, they should still cash flow pretty well and I would have roughly 200k for down-payments to purchase more rentals.

The entire goal of course is the best long term return on my money with cashflow and appreciation. I wouldn’t buy a property that doesn’t start off cashflowing in hopes of rent appreciation and eventually cashflowing.

Option#1

So here’s an example, 200k down payment on a one million dollar 8 unit property which is supposed to cashflow around $1,000-$1,500 per month.

Option#2

Or buy 3 or more 150k-300k doubles/triplex or what not that cashflow probably closer to $800-$1,200 per month each.....

Seems like the option#2 would have a better cashflow return, and given the smaller buildings are more affordable to get into, maybe they have more market demand in the future for better appreciation?

Or would both options appreciate the same?

I just feel like cap rates don’t seem very good, I believe the option#1 was like a 6% cap rate, and of course the single building is worth more and might appreciate 3% or more per year

But so would the cheaper option#2 and it would cashflow better.

So I don’t see the point of the larger buildings.

I heard that the new purchase price of the property causes taxes to go up a lot? Not sure if that’s true or if they can only raise the taxes so much per year?

So if I’m looking at property in Florida on trulia, and it lists the taxes, is that not accurate?

Thanks