All Forum Posts by: Logan Zanki

So heres the letter i've typed up, after reading what everyone else has done on here:

January 2st, 2014

Dear

Thank you for being long term tenants here at ___________. We appreciate that you have decided to stay during the transition from one owner to the next. As you have seen we are working hard to respond to your repairs and to make your stay as comfortable as possible.

A crucial part of maintaining ______________ is the maintenance and purchase of building materials. Unfortunately the costs of maintenance, taxes, insurance, mortgage and future repairs are very costly. In order to keep up with those expenses we will be increasing the rents to just below the fair market rents.

The state of New Jersey requires you to be served a 30 day written notice about any change in your rent. This document is that required notice, but we are giving you a 60 day notice. According to your one year lease that you signed on June 2st, 2012 you agreed to pay $825.00 per month to rent your apartment. Your agreed lease has been fulfilled and according to that same lease the agreement converted to month to month lease.

The Fair market rent for 2 bedroom apartments in North Plainfield range from $1,300-$1,500 a month. We will be raising your rent to $1,300 a month but in stages. As for March 1st 2014 your rent will be $1,050, then June 1st there will be a final raise to $1,300. On June 2nd you will be offered a 12 month lease.

If you do not wish to pay the increased rent you are allowed, by New Jersey law, to vacate the rental unit. If you intend to vacate, the original lease agreement states that you have to provide 30 day written notice of your intent to move.

We do understand that this increase will cause you to consider moving. We also want to emphasize that we consider it an honor to do business with you and would like to continue to do so.

By signing below you acknowledge that you’ve received this notice:

Tenant 1:

Sign:______________________ Date:_______________

Tenant 2:

Sign:______________________ Date:_______________

Landlord:

Sign:______________________ Date:_______________

I purchased a house that has two people paying under the going market rental price.

The one bedroom tenet has been in the house for 24 years and is paying $600 when the going price is $900-$1,000.

I was going to raise the price to $700 because he takes the trash out and is always cleaning up around the property with out me asking him. Plus he's on a fixed income and the unit is not in the best shape.

The two bedroom tenant has been in the house for 8 years and is paying $825 when the rent should be $1,300-$1,500 and I'm paying half of his electric because the hallway lights are hooked to his unit.

The unit needs some work like, new floors and the electric to be looked at. I was planning to increase their rent to $1,000 then start the work on the unit, then in three months raise it again to $1,200 which I would then allow them to sign a year lease.

Has anyone done a large jump in the rents like this before and how did it work out for them? I would also like to see a sample letter to see how I should word mine.

patrick,

It looks like your on a good start. You have rental income thats been reporting for more than two years, which will help you qualify for investment loans using future rental income versus being based off of your primary income.

As for where to start, you currently have experience from buying and holding, and it looks like you enjoy it. I would stick with what you know and enjoy at first, at least until you get a few more properties under your belt. Once you get a few more properties under your belt, and you feel comfortable then possibly venture out into buying and flipping.

I'm starting out and buying and holding myself for the cash flow.

Here's what I'm doing:

1) created a keyword on biggerpockets.com for "Jersey", so that I can find networking groups in my area.

2) searching for networking groups on Meetup.com

3) Had a real estate agent put me on the alert list for any more Multi families in my area.

4) search craigslist.com everyday for new Multi families

5) analyze the new listings by using the analyze tab on biggerpockets.com and an app for the iPad and iPhone called "evaluator".

I look forward to seeing what tips other investors have to give and to see what they have to say about my advice.

mark,

I just realized your from Jackson, I grew up in Jackson but I'm 7 years older. Do you have any older brothers or sisters?

mark,

I'm a new investor also and I'm in New Jersey. $4,430.16 a year for taxes in jersey is awesome, especially because it's a two family. As for the 2% rule, you really can't go off of that in our area. But from the way it sounds, it could cash flow but I don't know the terms of your loan. What you might want to do is check out the tab above "analyze". Using the analyze tab can help you determine if it's a good purchase or not.

Please share the results after analyzing the purchase.

What town is the two family in?

Wayne, I never said I was looking for business credit to fully buy the real estate on its own. What I said I was looking for was a line of credit that I can back with my personal saving to do a fast purchase on a house.

Example:

Purchase price 50k including title, and inspections. Business credit card/line of credit for 20k and my personal savings of 30k then I would be able to do a fast purchase and not have to wait for a bank approval. For this example lets say the house is valued at 80k. Then after 6 months do a Heloc backed by my personal credit to pay off the credit and recoup my personal savings.

So Wayne I would find this relevant to purchasing real estate.

I love how much activity were getting on this post and I'm glad to see an accountant chiming in to give advice.

He's a post I found on another site that walks you throw the process of how to get the company credit card with no GP and then tells you which cards you can get.

http://www.infinitecredit.com/forums/business-business-credit/271-smithdesign-how-establish-business-credit-aoc.html

@duncan aren't I able to do a HELOC in the business name backed by my personal credit?

@bill your right it does need tenants, but I thought the goal was to find income to cover the expenses before having to dip into the rental income. Which would make the rental income and extra added bonus.

well the lady I spoke to said that I can make payments over five months as she's building my credit and getting me the credit lines. At the end of the day it will cost me around 800 over the 5 months for her to build my business credit and get me the credit lines of 50 to 70k.

Here's the lady's information:

Justine Sundeen | Business Credit Consultant

TrueBuild Corporate Credit Program

Has anyone heard of her or her company?