All Forum Posts by: Jonathan Dempsey

@Kavin Kuykendall

@Marcus Auerbach makes some fantastic points. It is definitely important to hone in on a property class and price that makes sense. It is easy to get caught up in the hype and want to get started right away, when you may not be in the best financial position to invest in quality investments. Theres a sweet spot for cap rates vs. tenant class in markets (at least in mine in Philadelphia).

On the other side, I’ve noticed investors be too picky with property class. Unless you are going to live in the property, there’s no need to pass on places because “I wouldn’t live in there (the home quality or area)!” Just because you like to live in A class neighborhoods does not mean this is the case for every tenant. The B and C classes seem to be the sweet spot in terms of cap rates and tenant quality (its possible to do well with D class just not recommended for beginners).

My mentor luckily guided me in the right direction when I started. I cannot imagine where I would have been otherwise (probably owning several 40-60k homes in a much different area than my current wheelhouse).

Lastly, get a mentor and ask them whats needed. Don’t ask them every little thing, do your own research first, but when you are stumped or need clarity, they are a great resource.

Best of luck,

Jonathan

@Max T. How much cash did you put down originally? I saw 25% down on the purchase. What about on renovations? Congrats on successful renovations/renting.

@Timothy Crawford

From my experience in a competitive market where master bathrooms are sizable and walk-in closets are almost expected, the bathroom is the wow factor. Given that you will still have a walk-in closet to offer, the bathroom would be my choice to enlarge. Of course this is with the limited information provided and generally speaking.

Of all the houses I’ve toured, many bathrooms stick out in my mind due to the size and luxury, but I can’t recall one closet that made my jaw drop.

Best,

Jonathan

As crazy as it is to see Philly on the list twice, the crazier part is how much room there still is for improvement.  Both still in those areas and in others as well.

Hey @Stephen Betteridge, congratulations on your upcoming wedding!   Househacking is a great way to start your investing journey.  You should analyze deals as if you were not living there.  Any deal that is solid with these terms should also be solid as a house hack.  One reason I am a fan of house hacking and the low down payment is how strict it makes the deal requirements.  If you can find something that cashflows well at 3-5% down, it will certainly be a cash cow with 20-25% down without having to buy the additional cashflow.  

@Jay Hinrichs Completely missed op stated it was cancer. You can retract my statement about tenant seeing it coming then. Thats a different and unfortunate scenario as far as tenants responsibility to make arrangements. Glad to hear you caught it and got through it @Jay Hinrichs.

@Dane C Allen Loaded question and you can see how the forum is handling this. Some people on this thread go into every single post and say tenants should get everything for free in every scenario, so do not sweat their shade. You came on and asked because of your conscience. Imo, you should get it rented as quickly as possible. Maybe drop the ask a bit so you can rent it quick, and eat that drop for a period or ask the family to pay that difference and walk away. If they say no, not worth chasing them as others have said. If you cannot get your rental rented in 0-2 months, your rent is too high or you chose a bad market. A business decision you have to leave with. The tenant/family pays you in these 0-2 months. A contractual decision they have to live with. I cannot imagine this tenant went from zero to hospice overnight. And if not, then the tenant should not have signed a 12 month lease and should have arranged month to month with you or somewhere else as the situation unfolded. It was irresponsible for this to be sprung on you and they need to pay for the time being. At the end of the day, sure this is a business, but as an investor you have responsibility. Tenants will be irresponsible and sometimes out of their control. It is your job as an investor to be the creative solution finder you are and be empathetic without being a charity.

@Joe P. I had something very similar to this happen to me once. My tenant ending up finding the missing item within a week and wrote a huge apology to me and the subs. Have not had any problems since. Give it time, handle it properly and you could end up with a tenant even more mannered than before the incident. Regardless of how it unfolds, keep us posted!

@Douglas Gratz

As each neighborhood has its own little market for pricing, it is probably best to look at comps renting/for rent in each area.   This is truly the best and fastest way to arrive at the answers you desire.

Another thing to keep in mind would be trends in the area.  

Lastly, and I could be wrong about this but have read about it happening elsewhere, but it is possible that you can rent at a higher rent to section 8 tenants than you would be able to at market rates in some of these areas.  

Best,

JD

@Bobby Lister III I’m not a lender nor is this any sort of advice or advisory, but typically for multifamily investments minimum is 25% down. Single family investment 15%. Owner Occupied SFH 3% You could try to find another duplex to Owner Occ, or maybe check the expiration on leases of current tenants. If either side is up soon, maybe you could owner occ within a time period approved by your lender. Might not be possible but maybe worth checking.