All Forum Posts by: Kathy Henley

@Jim Davis Water leaks must be seen to as water damage rots wood and ruins wall board. I would start start there. Tenants don't notice things because they don't want their rent to go up.

@Cedar Wood So the adjacent property is for sale and you are considering buying it to preserve the views? That would tie up money, how would you re-coup the investment (make a profit)? 

Their marketing material may suggest its development for a prefab cabin, but what are the local rules for development? Can the plot be tied into the city sewer, for instance, or will a septic tank be needed for the new dwelling? These and other permit issues will be faced by any new owner. Some jurisdictions make a fuss over cutting trees down. You may have time to complete your project, market your cabin and make a success of your business plan. Spend time listening to the prevailing talk of the area. You might be part of the new trend (small cabins for rent) or, you might be a spokesperson to save the trees.

@Vilner Labranche Banks sell different kind of loans. Find a bank that offers FHA loans for owner occupied duplexes. Realtors don't know everything about bank products.

@Jason Jauregui  This would be a good question for your agent since it depends on the local county tax law and how the values are adjusted over the years of ownership. In general, county tax multipliers go up a certain amount each year, or each time the property is reassessed, set by statute. (In my county, properties are reassessed every two years.) The current owner may have held the property for many years. During ownership, the county assessment amount my have risen at a slower pace than market value, because of the tax statute, not market conditions. This might be what you are seeing. There are also special assessments 'voted in' by cities, for a new library, or more emergency services, that appear annually on our property tax bill. They come and go.

You could ask to see a copy of the most current property tax bill during due diligence.

The market value of a commercial property may be based on the market cycle of current rent rates, not assessed value from the county assessor's office. 

A better question for estimating the future property tax expense, does the county use this year's purchase price to re-set the assessed value, or does the value carry over from last year's county assessment? It varies by state and county.

@Domenick Booker-Pomata Contractors know how to rehab, but not sell. You would benefit by having a real estate agent on your team. Recent sales are tracked on the MLS. This address is not in south city, where the young people want to eat and live, as your headline implies. This is the Carondelet neighborhood, right on the border of the Mount Pleasant neighborhood; much rougher turf. The google 2011 street view is better looking than today's zillow listing.

Successful hard money lenders know the pulse of the market. They don't take risks and you shouldn't either. Dig further.

City-Data.com tells us that the median HH income of this area is $34,200. My leasing experience tells me area rents are $450/month for 1bed units. Consider this when deciding what you will to do with the property.

A house may be unique, but the neighborhood speaks louder. Ask yourself, will the upgrades pay for themselves? Is this the best use of your hard earned money? Or, ask yourself, how little of money I need to put into this to get area rents? A local property manager would be a good member of your team too.

@Robin W. Go shopping. Reach out to other lenders since each has their own underwriting check list. This might be a small local bank or credit union that could keep it in house and work with your situation. You have strong qualifications, don't give up.

@Cecilia Arnulphi Where is the rental property? I can recommend one in city of St. Louis. Send me a personal message.
What does it say in your lease about abandoned property? Your property manager may be able to take action.

@Jared Godoy I started investing from out of state. After figuring out 'where' I gathered a team in that location. Locals know the market and area expectations. I absorbed their wisdom. The team included a local lender with gray hair because an experienced lender approves the loan the knowing local market trends and the path of development. Lender recommendations came from my agent (also a investor in real estate), potential property managers (who had their own investment properties) and other successful investors that lived in this out of state area. 

@Brandon Malone Read the books by Garrett Sutton about setting up LLC's, this will give you an overview. Then work with your real estate attorney to map it out. Your CPA should also approve the structure so that you are a team with the same goal. I did it once myself and made it too complicated. Started over a year later with professional help. My lawyer is my registered agent and the law office address is the registered address.

@Andy S. Sometimes parts take time to arrive. Ouch. I do know that eviction is costly (time and money.) It should be be close to renewal time. Do not renew. Follow the language in the lease on giving the tenant notice of not renewing. Or if negotiating a renewal, add a few points to the 'Amendment to the Rental Agreement' (after the new dates and new rent is called out):

-Maintenance requests or repairs will be scheduled for repair within X days of their request. LL will make every attempt to complete the repair as soon as possible.

-No repairs can be made by the tenant without the LL permission. Should the Tenant make a repair without permission, the expense will not be reimbursed.

-A security deposit of X will be paid with the signing of this Amendment. It will be held against any damages that arise during the tenancy. The security deposit WILL NOT BE USED TO PAY RENT. Deposit will be refunded according to the local statute.