All Forum Posts by: Kristina Heimstaedt

My neighbors are actually from Saskatchewan and I know the tax situations can be a little messy. I think someone mentioned that for banking purposes in the states that it is important to establish an LLC here so that you can actively bank here.

Everyone has a very different strategy/approach. I think something that appears to be more or less consistent no matter the market is that you can find cash flow, but typically on properties that have less upside or protection from hiccups/corrections to the market. I typically recommend to my clients to look for good products and negotiate down to a more cash flow reasonable price, but of course, that's typically easier said than done. 

Sorry for such a wishy washy answer, but hopefully this at least points you in the right direction. Best of luck!!!

Definitely consult an attorney. My first move might be to just instruct the tenants on how to pay and wait 30 days to see how much they're paying. Then I would sit them down and let them know what your agenda with the property is and then see how they react. For sure, consult the attorney. Next time, definitely get estoppels. 

@Fredie Robinson @Linda S. I wouldn't normally recommend M2M, because like many people, I like not having to think about turnover. 

However, the bonus about this situation is that you know that she wants stability. I would use it as a negotiating tool. "Hi potential tenant. You work at a property management company. You know that you don't have a perfect renter's profile. However, I know you want to do what's best for you and your kids. That being said, I'd like to hedge my bets with a M2M lease. I have no intent of displacing you or your kids. Rather, I just want to make sure that we work well together and I'm more than happy to give you a 1 year lease after x number of successful months". 

This is more or less how I would handle the situation if I were in your shoes and why I would choose to at least start with a M2M lease. 

Not 100% sure about how the intricacies of the market differ from that of Orange County. However, it's easiest on the tenant's part to find and negotiate a better rate in September, October and November. More often than not, the weather heats up in Spring and people get the idea to move to the beach so all of our rentals are set on yearly leases with starts in April, May or June. 

I might try to talk to the tenants and let them know what your plan is (the 25% increase) and say that you would like to work with them to help them find a new spot rather than continue to burden them with rent hikes. 

I might also think about to what extent the property needs capital expenses updates and see if I can't coordinate making some of those happen in time for new tenants and get closer to a 30+% increases on the rent. 

Best of luck @Jane Dang I'm sure it will all shake out!!

@Adam Treboutat there are lots of posts around the site with different strategies on how to increase rents without completely scaring off your tenant. We do 2-5% increases every year to account for the increase in property taxes as well as market rents. At this rate, tenants still typically stay below market and get used to the idea that their rent is going to go up every year. If you have a quality product, they will beg for their lease to be renewed every year even though they know their rent is going to increase. Also, usually 2-5% isn't burdensome enough to want to make the effort to move. It's typically more expensive to move than to take a $50-$100 hit to increased rent. 

It's not always that a property is in disrepair. We have been most successful picking up probate properties or properties sold as a result of a death in the family. 9 times out of 10, you'll find that the kids don't want to deal with the stress/headaches that they saw their parent go through and choose to sell it instead. 

I had a friend who had a client who was going through a divorce and sold two income properties to buy a nice home. 

Maybe someone found an up-leg property that is just that good that they need to get out of their current property. 

You might also find that some people decide that they are far too busy and you might give them a number that is leaps and bounds higher than they could have ever imagined even if it is still a smoking deal for you. People who have owned their homes a long time are rarely aware of the appreciation.

I would be less concerned about why someone is selling and instead work on volume. If you want to be a wholesaler, think of yourself as a real estate agent. You're more or less a matchmaker and you're taking a commission in the process. Now, I'm not so sure about wholesaling. However, as a real estate agent, they recommend starting with about 500 homes. Typically it's a manageable number per expenses and provides ample opportunity to become a recognizable name. Just a thought.

I might take the opposite of my usual approach. I agree with a lot of @Eddie Memphis's comments. For all of those reasons, I'd put her on month to month and let her show me that she knows how to be a great tenant whether that's at her personal residence and you negotiate a deal with her there or she moves in to the new property.

@JD Martin go team!!!

@Steve DellaPelle Depends on your lease. California allows you to differentiate between those that are financially responsible versus those that are residing in the property. When prospective tenants suggest this arrangement, I tell them that the one who is not financially responsible will be more or less like a child on the lease. Nonetheless, I still ask that the tenant contact me in group form whether that is group texting or group emailing so there is no "he said, she said". I would also be very clear that if there is ever any ambiguity, that you will always defer to the one who is financially responsible. GF/BF situations can be a little complicated that way and I've definitely run into some issues. However, if your prospects have kids together, I'm assuming that they've weathered a few storms and probably aren't too bad.

I'm with @Robert C.. Hang on to the property until the next little hiccup/correction in the market and refinance and take the funds to fund your next deal. I might even be more inclined to look at a second mortgage of some sort. I'd say HELOC, but I'm apprehensive to say that they'd give it to you on a non-owner occupied property.