All Forum Posts by: Matthew Defore

I read the following blurb in a BP blog/article. Question - can this happen on a fannie mae 30 year fixed loan? (if the property value drops, the lender calls due the difference on LTV):

"But during recessions, when property values slide, borrowers who had been at max leverage (often 75 percent LTV) find themselves having to pay down their loan to meet the required LTV.

What does this mean?

Basically, if you bought a property for $1,000,000, and the lender’s max LTV (leverage-to-value) is 75 percent, they will give you a $750,000 loan. But if for any reason your property value drops to, say, $900,000, your $750,000 loan has now increased to 83 percent of value. So, the lender will require you to pay down the loan to get to 75 percent LTV."

Joe, the point is, right now you don't even have dead money.  You have no money.  So you need to save so you will have money to invest.

Work on your budgeting and get in the habit now of saving aggressively.  The money will pile up quicker than you think and you will have down payment money

@Ryan Deasy

1) What are your suggestions on how to write up the online advertisement so it doesn't sound sketchy, but also sets the correct expectations while making it sound appealing?

2) Do you limit your rooms to one occupant? This is my gut instinct.

3) Do you allow pets? I'm pet-friendly on traditional rentals, but again my gut tells me "no" on rent by the room, for the sake of the tenants being peaceful with each other.

4) In your experience, what is your typical renter like? Are they usually aware that this is the trade off and they are happy to work with the other "roommates" to mutually benefit? I.e., Dont want no problems, just an affordable place? Any red flags to look for on tenants who might not fit this mold?

5) So far, what has been your biggest failure, surprise or learning experience as you mastered this product?

Thanks!

Matt

I have two properties with furnaces and AC outdoor blower units that are approx 20 years old.  They are still performing at this time.  Should I wait until they fail before replacing? Or should I replace them now before HVAC technicians are in high demand during the summer (mississippi) ?  The only consequence of letting them fail that I can think of, is that the tenant will be without heat/AC for the amount of time that it takes to replace.  The obvious consequence is that I might otherwise be able to defer these costs another year, two or five if I ride it till the end. 

Your thoughts? C-class properties in a college town FYI

Matt
 

Thanks.  I just cancelled buildium.  I had it for 2 months and couldnt figure it out.  I got on cozy and had it running right away.  Buildium is great if you have lots of properties under various LLCs or if you manage for several ownvers.  But for single dimensional situations, it's kind of overwhelming

@ryandeasy Yes, let's connect if you don't mind.  I'll PM you shortly.  Last thing, I'm curious exactly how you word/structure your advertisements to make it sound attractive, yet accurate, as well as how to distinguish this from some dude who needs a sublet roommate.  

Hi @Ryan Deasy!  Before you responded to this thread, I actually had two of your articles open in my browser.  I'm really interested to do rent by the room.  No one in my market offers it, except for a few of the larger apartment complexes in town. 

The options that I've come up with on utilities is one of the following:

-Chop up the bill each month and charge it back to them (although I'm curious if this will be a source of conflict among the roommates if they start fighting about one tenant using more electricity than the others)

-Just assume that they will use lots of utilities and build a flat rate into the rent price.  Possibly install a nest thermostat that I can monitor remotely to ensure that AC use reasonable  (with language in the lease that temps must be between 70-74 summer, 68-70 in winter OR SOMETHING)

-Charge rent, then charge a more reasonable flat rate for utilities and charge back to them for anything more than whatever "reasonable" amount that I define (this may give incentive for them to not abuse utilities)

My other obstacle is how I pair up compatible roommates without discriminating on Fair housing laws; I.e., how to not pair up a 60yo with a 20yo, etc.

Furnishing - Common areas only?

These are the thoughts running around in my head right now.  But I'm willing to try it on one of my units as a pilot run since it's double the cash flow. 

Matt

I'm interested to know more about the concerns between roommates; sex assault, theft and just general bickering/fighting.  Do you find that most rent by the room applicants are low impact since they are in the situation where renting by the room is attractive to them?

On the fair housing laws side - Is it possible to try to pair up same gender and similar age range tenants without violating fair housing? Any lawful strategies here?

Matt from Oxford Mississippi

For those of you who are familiar with each software, what does Buildium do that Cozy does not?  Buildium for me is $50/mo, whereas Cozy is free.  The main thing that I am interested in doing is online ACH rent payments.  It is beneficial that Buildium can track which appliances are in each home etc, just not sure if it's worth $50/mo.

How long does it take to get the ACH payments set up on Cozy?