All Forum Posts by: Mark Trebor

@Zachary Trigger How much does a 60-80K house rent for each month on average?

@Zachary Trigger @Trevor Cox 

In the 11 years I have been renting houses to college kids only one time have we taken the entire $2000 security deposit.  We have taken small amounts, typically $100-$200 broken windows, holes in the wall etc.  As for having the parents co-sign it opens the door to a hole heap of ****, now the parents what control of the rental situation.  I can't tell you how many times the tenants call us up and say there is pink stuff growing in my bathroom shower, we tell them you need to clean the shower on a regular basis to not have pink stuff growing.  Then mommy and daddy call and threaten us that we are renting an unsafe house, but since mommy and daddy are not on the lease we get to say, " your adult child signed the lease with us and since you are not on the lease we will not be discussing this issue with you".  Yes of course it pisses the parents off and they threaten all sorts of crazy stuff.  Eventually the parents calm down and the kids get told that we do not talk to their parents.  We're helping them grow up and we're helping their parents let go, its part of renting to college kids.

Even if you have the parents co-sign and they decide to stop paying it would be such a hassle to get the money from either the kid or the parent.  Small claims courts, then a judgement, then find something to repo (because they're not willingly going to pay) find the Sheriff to get the repo order authorized, find a repo man, have him sell the stuff take his cut and then some day maybe you get a little bit of your money.  People just don't want to deal with this and both parties know this.  Most college kids want to focus on getting a degree and then getting on with life and then trying to have a little fun in between.  We seem to always have a great group of young adults renting from us.  We've only threatened to kick one group out after they had 3 large parties in two weeks and the cops and University got involved.  Maybe we're lucky the University that we are next to has a policy that if students have off campus infractions they can get kicked out of the University.

As for lease we always rent from June 1st to May 31st.  That way when people graduate their lease is up.  They pay monthly and are responsible for all utilities but we provide lawn mowing and garbage.  Never pay for utilities, they will leave the windows opened and the house turned up to 80 (again helping them grow up).  Glad to answer more pointed questions if you have any good luck.

How much is your home worth? Trying to figure out what percentage of the 30K is your homes value. My experience with banks is that they still want you to have equity in your property after giving you a HELOC. Unless your house is worth 50K I'm not sure you will have an easy time tapping into that 30K in equity.

I have done both. The ones in my name have the lowest interest and longest term. The ones in the LLC are with banks have higher interest and 5/1 ARMS. In theory you are better protected with the LLC, I'm speculating but if you screw up really bad and somebody dies on your property due to your negligence the LLC or individual ownership is not going to matter, you're going to be in a world of hurt either way.

I have 18 SFH near a University I have never had a house trashed and I have never had a house vacant either. The houses rent themselves, friends of friends line up to rent the house for the upcoming year. We have a very simple model keep the houses in a condition that you would live in them yourself. Fix the small things if somebody sees a hole in the wall what's the big deal if they add a second or third hole. Broken window? Why not two broken windows.... you get the picture. Some simple advice, rent the house not the bedroom, make the students sign the lease and keep their parents out of it (in other words don't have their parents co sign) we really never have a problem with late rent. Occasionally somebody gets lazy but that is rare. We rent for all 12 months and have a very generous sub-lease arrangement. We discourage pets by having a pet fee. If the cops get called let them know you know about it and that you will kick them out of the house if needed. Treat them like the adults they are, behaviors have consequences. Don't speak to their parents when they call complaining about a feature of the house they do not like. Have them meet the neighbors. I could go on and on. ..

Hate saying it but you might be biting off a little more then you can chew right now.  Not having a concrete plan and the dragging the girlfriend into this might be a bad move???  One and done, so are you doing the work yourself or going to hire a general contractor to update it?  Are you getting your confidence from HGTV? Be careful if you are :)  Contractor = extra money out of your pocket, doing it yourself = extra time out of your life, do you have the tools and know how to do this stuff?  Does your girlfriend have a good job that she can float the mortgage by herself on the note.  Have you considered all of the carrying costs (utilities, mortgage, etc.) 

If you flip it and don't hold for more then 2 years then yes you will have to pay taxes on any of your gains.  Paying taxes are probably unavoidable maybe you could meet with a real estate accountant to do something fancy like a 1031 exchange with the fix and flip and 1031 with your current house take the equity in both properties and roll them together into a new bigger house? or a similar house that would be closer to paid off?  Just some ideas.  Let the GF make the decision that way if it fails its not your fault.... good luck!

I have 18 houses near a large university all of them are within walking distance and by walking distance I mean a couple of blocks away from the outskirts of the campus.  The houses rent themselves just from friends of friends never have any vacancy issues.  A very interesting phenomenon is happening around campus the young hipster families are starting to come back to the town they went to college and want to raise a family which are driving up the values of all the single family homes.  Great position to be in since I bought 10 years ago sucks for a newbie starting out, margins are much smaller when paying these premiums that the single family houses are getting.  Still good money just not crazy money. 

Hi Richard I think you need to add some more information to your question.  Having a paid off rental property vs one that has a debt against it shouldn't change the amount depreciation you can use as an expense against it.   Depreciation is set at the beginning and does not change when the house becomes paid off.  Not sure what you mean by taxed more or less vs a rental with a mortgage.  Are you still talking about deprecation?

I am speculating you are saying that the house is now paid off and you're wondering if you can still continue using your deprecation schedule even though there is no mortgage.  The answer to that question would be yes.

I think this is a common tactic used especially in a hot market.  But.... you can only back out of so many deals before the realtor you are working with might not want to help you anymore.  You're now wasting his/her time as well as yours so tread lightly.  I have a good working relationship with my Realtor she knows what I want sends me the listing and if I say I am interested she ask the seller for permission to video tape the property she share the video with me and then we decide if we are going to make an offer based on that info.  I buy houses 100+ miles away from where I live so checking out every house in person is not feasible. I think the last 6 houses I never set foot in until sometime after owning them.

Cash is king they are going to look at your finances.  If you have the down payment money, good credit and job you will get the loan there is no secret.  Real estate is not rocket science, its the number one way for the average guy to get rich.

But if by lender you really mean private money lender well then you're going to have to be lucky.  Because I would not give a guy one cent that told me about a great deal but didn't have any money, but some private money guys have figured out how to make this work.  They run their own numbers then do a character assessment on you then make you sign a bunch of legal documents that basically say if you f'up the house is there's.  Because the big guy is not going to lose money to the little guy, how life works 99% of the time.  Good luck!