All Forum Posts by: Logan Koch

@Marc Winter, @Theresa Harris, @Anthony Wick, @Nathan Gesner, @Mike Franco

Thank you all for your input! The reassurance that we do not have to get involved in this matter, and to stick to the lease is very appreciated. Getting started as a Landlord this was not a situation I thought about having to be in the middle of. 

Great Learning experience on how to handle these types of situations in the future with less stress haha. 

Dealing with an issue of one tenant within a student housing property wanting to break the lease and move out. I had a parent call me saying their student and another student living in the property were in a verbal argument, where the parents student was threaten by the other. They are moving him out breaking the lease and asking for a full refund for the fall semester. 

We have in our lease the ability to evict a student causing a hostile environment. Which based on the story I'm getting, this would be a good option. My question is since they have already moved their student out and are asking for a refund what is the best course of action? Legally is this a situation a lease can be broken, and returned the rent they have paid?

We do not want any hostile situation to come about in our properties, and would step in and evict a tenant causing a hostile environment. However, it seems they are set on getting a refund and not returning to the property if an eviction would occur.   

Hello BP members ,

I am writing this post to ask to double check if there is any important things to consider when analyzing deals in the Pittsburgh area. My family has a few properties under our belt in the Central PA area. I moved to Pittsburgh a few months ago, and am looking to expand our portfolio in this area. I just wanted to present how I generally run my numbers before diving deep into a specific deal, and see if there is anything that would be edited for this area. Thanks!

Vacancy 8%

taxes: given

Insurance $800 for 2 units or cheaper property and upwards of $1,500 for 4 units and more expensive

Sewer/Water: $1500 for duplex and I add $500 per extra unit  (ex; 4units+$2,500)

Garbage: $500

Electric/Heat tenants responsibility if sub metered?

Repairs/Maintenance: 8%

Cap Ex: 7% 

Property Management: 10% 

What would be a ballpark estimate for lawn care and snow removal on an average size lot for small multi around the city? 

Thanks!

Hi everyone,

I have a current scenario i'd like to get feedback for, if you wouldn't mind.

So currently we are under contract on a 4-unit property we are waiting on underwriting to either approve or deny the conventional Loan we applied for. This would be 30yr fixed, 75% LTV. There is some knob and tube wiring in the property that if shows up on the appraisal report (which i'm certain it will) will need to be upgraded right away based on banks guidelines. Should received that back within next few days. My main concern is the loan falling through at this point. My wife ended up on workmen's comp after a work related injury, so they do not want to qualify her income.

We currently own another property which we are in the process of refinancing after we used a HELOC and rehabbed last summer. This will be into a 25yr commercial loan (bought the property under LLC name, and was told it was good to keep in business name to create business credit history). Now, i don't believe the refi will be done before closing on the current property.

My thoughts was if need be ask for extension on closing, put our 25% down payment, and when refi is done, turn around and use HELOC again to cover portion we were going to finance. At that point plan would be to let both properties stabilize little while so we can better qualify for financing.

Does anyone have any other options? or does this seem like a good back up plan?

Hopefully the normal conventional financing works out the first time. 

Thanks,

Logan

I'm Looking into Getting an automated payment option for tenants to pay monthly rent. I stumbled across Cozy.Co on these forums, and was looking for feedback from anyone that has used this service. 

Or, if anyone has any other options that work well for them. 

Thank you.

In February 2018 we found a large SFH in the town I went to College at. We closed on this property mid April, and our family rental business was born.

Purchase price: $113,000 SFH 5bedroom

appraisal value was in the ballpark of $130,000 based on the condition. 

We used a HELOC from my parents home to purchase this property, the loan amount on the HELOC was $140,000. Part of the pitch I used to get my parents on board with this investment, was they wanted to build a new garage at their own property so 20K of the HELOC was dedicated to this.

We put $11,000 into our business checking account to start up, and fund part of the rehab. Also, from May-Aug. we paid a total of $4,000 in holding cost to cover the HELOC payment. From September-April of 2019 we will be making a payment out of pocket toward the principal that will pay down an extra $4,800.

Our cash out of pocket will total at $20,000 mainly to fund rehab and holding cost. 

The total cost of rehab for this project was just under $16,000. 

major rehab break down:

-unfinished attic was broken into 2 large bedrooms 

- new attic window to meet egress

-upgrade electrical 

-carpet second and third floor

-laminate flooring kitchen/bathrooms

-created a new bathroom on first floor. (house only had one bedroom total before, on second floor)

-painted entire house/ kitchen cabinets

We hope to have the new appraisal of this house at $156,000 or above, based on the principal of our HELOC will be at $125,000 in April of 2019 which will be one year after the closing an will give us 20% equity in the property.

Closing on this home in April is usually a bad situation when trying to fill a student rental property. most leases are signed in October the year before hand. Luckily I am rented to brothers of the fraternity I was apart of during school. It takes a lot of stress off of me trying to fill the house each year, and I am able to keep a better eye on the property since having a connection to the guys living in the property. For this Coming school year we have 4 tenants on year long leases, and 1 one a one semester lease, I was very happy to have it this filled at this point in the year. I will also be having a new group of 5 sign for the next school year in a month. 

Rents on the property $26,000. The next school year it will be one lease that all tenants are responsible for the total amount. but it is broken up at $2,600 per semester per person. This also doesn't include any summer leases at $500 per person which will be directed to our CAP EX fund.

A break down of the estimated first year PL sheet

Gross Rent:$23,400

taxes: $1,560

insurance: $590

Water/sewer: $2,000

Gas: $1,900

Electric: $1.500

Maintenance: $1,000

expense total: $8550

NOI: $14,850

Debt: $1080x8months= $8,640

Cash flow (paying toward HELOC principle) $6210

(yes I'm not including Vacancy for this year, I'm also not including Cap Ex this first year either)

utility estimates are based on previous averages, and also our first 4 months

Year two

gross income: $26,000

taxes $1,560

insurance: $590

Sewer/Water: $2,000

Gas: $1,900

Trash(year two electric will be on tenants and we take over trash): $300

Repairs/Cap EX fund: $2,500  (summer rents will be added to this)

Expenses: $8850

NOI: $17,150

Refi Debt (125,000 loan @5% estimated): $8040

Cashflow: $9110 45% COC

Overall this deal is turning out very well, an seems to be an awesome first investment property. Can't wait to Refi and get rolling on the next one. 

IF you have any questions, Comments, or advice please share! Thanks for reading. 

P.S. will post pictures next weekend. 

Looking for feedback on My First Real estate Deal.

Currently working to buy a Property in a college town that I am an Alumni from, in Western PA.

Smaller University about 6,000 undergrads. THis will be a student Rental

Purchase Price 113k

Rehab 15K

5 Bedroom, including third story finished Attic (2800 Sq Ft)

Rent $2,600 per semester $5,200 for year. $500 summer lease

-this is around average rent for off campus house with Utilites included

Expenses

taxs- $1,700

insurance- $2050

gas- $1,900

Electric- $1,200

Water/Sewer- $2,000

Yearly maintance- $1,000

total= $9,850

NOI based on Semester Rents Without Summer leases and late fees $26,000

($16,150)

Purchasing Home with Primary Home Equity.  All profits will be dumped into Equity annually until Loan is repaid. 

Any Cap Ex funds needed will be pulled from equity as well.

FeedBack would be great! again this is my first investment property. Exit is to hold house for 10 years and sell to 1031 into larger multi family deal.