All Forum Posts by: Lauren H.

We are building cash flow right now. Other than considering location I want properties where the Gross Income is double the amount of the expenses. This is our minimum. If you don't have good margins then you may have a more difficult time with economic swings.

But, our strategy is also very aggressive. We bought our second 4plex six months ago and are now under contract for our third. We can't afford to work 40 hour a week jobs and make only $100 per door. The time spent doing management would kill our lifestyle. 

Location is a consideration. 

Rehab is also a consideration. If the after-rehab ROI is too low compared to the amount of rehab required I run the other way. I'm looking for 22% cash on cash or higher after rehab. Even in the hot Colorado market, persistence and patience pays off.

My husband and I just met with a broker at Wells Fargo 2 weeks ago. 

For commercial lending no reserve money is needed. 

Minimum down is 20% (for us this is a good ROI balance)

Income:expense must be $1.25:$1.00 (your standards should be more like $1.75:$1.00 before maintenance, management, etc.)

They will not qualify you based on your income, but the underwriters do need to be impressed with your management history. Give them solid leases and be very organized with your record keeping. 

Terms varied but were all 4-5% based on 25 year AM. 

Also, HELOC rates here are at 2.25%. Easy money for HELOC and commercial here in Colorado.

I use the state Bureau of Investigation for the last place the tenant lived. I've used Texas BI and Colorado BI so far. It's cheap, reliable and instantaneous. If the tenant lived in-state for 7-10 years I don't even ask about previous history. 

Be wary of past DUI offenses, it speaks to personal responsibility/life choices. My only eviction in 5 years was a guy that had multiple offenses and was still driving drunk (I witnessed it personally) after he moved into my building. 

I suggest serving a Notice right away. In Colorado it is called "Demand for Compliance or Right to Possession". I can't give legal advice, but this is the notice that I use for late or nonpayment of rent. Colorado has a built-in 3-day grace period, so I do not allow any extra grace period in my lease. 

It sounds like the tenant's "I don't care" attitude puts her in the category of people that are NOT your customer. Make sure she has the right motivation to move at the end of the lease by serving Notice of Increase in Rent (use your state's Demand for Compliance and modify it in Word). If she complies on the dog issue, give her a substantial rent increase per your state's timeline. If she doesn't comply on the dog issue, serve Notice of Nonrenewal, basically telling her that she needs to move when the term is up. 

That's just what I would do. A few paralegal classes at your local community college can do a world of good in figuring out the court system and navigating the legal mumbojumbo! 

My husband and I house hacked our first fourplex 3 years ago. The unit we moved into was chain smoked in up until moving day. We put down several layers of Kilz and two coats of paint before the carpet install, then I painted the cabinets inside AND outside! We just moved into our second fourplex (another house hack) and the smell is totally gone now. 

We Kilzed it! 

We are in the high desert, xeriscape that! 

For curb appeal, don't just lay gravel, put down some hearty desert plants to break up the space. 

If you decide to paint, which is what I would do in your situation, if you ask for a glossy outdoor porch paint (oil based) it will go on nicely and leave a smooth surface that is easy to clean. I've done this in 2 properties that are B- buildings in C+ areas and the tenants really like the look. I chose a soft blue paint color for the cabinets with a neutral-light countertop, walls are painted Gold Coast White (Home Depot) and installed stainless sinks and faucets. 

I qualify unmarried couples based solely on the person with the most income. If that person cannot meet the 3x rule, then send them the "not qualified" letter. In Colorado eviction is easier with only one name on the lease IMO. 

@Mary Lou l Thanks so much for posting this! I'm in Colorado Springs, Colorado and bought a 4 unit building just a few months ago. I have the EXACT same stone around the fireplace in each unit! The responses confirm what I was thinking- wire brush it with 409 cleaner and hope it looks good after. 

Tell your friend to be patient! The waiting game is the hardest part.