All Forum Posts by: Leeling Chew

New landlord here. I recently purchased a fourplex in Killeen, TX. Asking price was $350K, but after negotiation, it went down to $333K. Down payment $87K. Each 2/1 unit is close to 800 sq ft. The neighborhood has about 30 other fourplexes, and is a safe neighborhood. My For Rent sign drew many inquiries from people with under 600 credit scores, and a few are section 8. The rent comps nearby range from $700 - $985.

Unit A has an existing tenant, and I increased the rent to $830 with only newly painted wall and vinyl floor.

I spent $16K renovated unit C to STR standard except without changing the existing appliances, and is currently renting for $950. Contractor worked fast, and he only took two weeks to finish.

Unit B will be vacant starting in Nov, and I am needing help in deciding if I should renovate or not, and if I do, how much renovation to do?

Unit D will be vacant starting in mid-Nov, and original plan is to renovate it to STR standard and to do STR for an experiment.

The pictures in unit C came out stunning and I listed it for $1000 just to see if there's any takers. Many people inquired on Zillow but none panned out after one week. 

It takes $16K to renovate each unit to STR standard (rent $950-$1000), but around $11K to paint and have new vinyl floor (rent $830-$900). How do I go about determining if I should put $16K or $11 into unit B?

I did some calculation below (assuming all four units have the same renovation). (Did I even do it right?) Should I do another calculation with partial renovation and compare the cash on cash return with the return of the full renovation?

Hi all,
I am relatively new to BP. I am looking for an accountant who is familiar with real estate STR investment. I tried searching on the forums for accountant recommendations. How crucial is it to get an accountant who is local?
I am based in Austin, TX. Any accountant who serves this area, please reach out to me.

Leeling

Hi, has anyone used PM services offered by TX Vacation Rentals? They charge 16% to 18%. When I tried googling, I couldn't find any reviews.

After reading up all the negative reviews on Evolve and RedAwning,  I am reaching out to companies more local. The owner is also a real estate agent and I am in the process of reaching out to him.

Leeling

We were given these two options when we refinanced our house recently: 5.25% with $8000 cost OR 5.875%. My husband chose 5.875% with the following reasoning:
"If I had applied for a 5.25% rate for a $401250 loan, the loan would cost $8000 more and the payments would be $158 less per month. I applied for a 5.875% rate for a $401259 loan. i will take the $8000 extra, apply to the principal after closing. That will save $35k in amortized interest paid."
My 17 year old son, who has recently began to learn about real estate investing, didn't agree. His reasoning is as follows: 
"By paying $8000 toward the remaining principal, we would be left with $393,250. The interest isn't saved, it is merely avoided by borrowing less money on the first 19 amortized payments. Even if one considered the $8000 gone with closing costs for the 5.25% option, its $158 cheaper per month. Now that we are borrowing $393250 on both interest rates, we are just paying extra for 5.875%. If we were to refinance after 5 years, the amount saved in interest would total $9480(12*158*5), which is more than $8000."

We had spent several hours on this debate already. Who is right??

LL