All Forum Posts by: Matthew Dennehy

I represented a seller during a transaction where the buyers used quicken loans. There were delays and problems throughout. Definitely use a local lender or someone recommended by your agent. A good lender can make a huge difference.

Echoing what others have said, always strictly hold the tenant to the terms of the lease and collect rent from them. There are two main reasons for this:

1. You must treat all tenants equally. If you let one slide and not another, it doesn’t matter what different circumstances there might be, you are opening yourself up to a fair housing complaint.

2. $37 isn’t a big deal, but like others have said the tenants will start to take advantage. What happens when they damage the property and you try to collect? If they don’t pay their rent, they certainly won’t pay for damages.

Are they original windows? Being a 1935 house, if they are original windows, they are probably covered in lead paint. Approximately 86% of lead dust in homes come from windows. Lead paint has been gaining more and more traction as an issue recently, and windows are the biggest offender of lead hazards. Vinyl replacements are the easiest way to resolve that issue, but often not cheap all things considered.

I’m not sure if this is the reason for your feedback on the windows as I don’t know the climate of your market. But definitely sometime to keep in the back of your mind.

Check your state laws. In NH an owner can self manage without a license as can employees of an owner. At that point it comes down to your structure. It would be best to contact an attorney to make sure you’re within the legal limits.

Appraisers can be funny sometimes, you don’t always know what their going to do. It’s always a big question mark. As an agent, when I represent a seller, I always meet with the appraiser when they do their property visit and I always hand them comparables. They probably don’t look at them half the time, but sometimes they are grateful I made their job easier.

I would advise seeking a great real estate agent to help you assess the after repair value prior to your refinancing. They can help make recommendations on getting the most value out of your property and give you comps to help you evaluate when to refinance. Just make sure to make it worth their time.

Congrats on getting paid this month, just be prepared for future months when a little bump in the road could cause you tenant to stop paying, especially is she believes she is owed something.

It’s always important to have a process for dealing with late rent, and always sticking to the process. A good practice is to issue the demand for rent and eviction notices (or whatever your state requires) the day after rent was due and became in arrears. This always gives you the ability to go through the full eviction process should you need to.

It’s also important to have some compassion and realize that everyone has hard times every once in a while. Now the tenant’s problem should never become your problem, but if you can make some modest and reasonable accommodations to get them back on track, it can go a long way toward helping them. An example is a payment plan or agreement (signed by everyone) getting them back on track. Two very important considerations with this, never let them get so far behind they cannot get back on track, and always have the agreement in writing and signed by everyone. The agreement should specifically stipulate what will happen and when should the tenant fail to make the payments as agreed.

The nice thing about the line of credit, as others have mentioned, is you can use the money as you need it and aren’t forced to take it lump sum like a home equity loan. So you can pay for your half of the deposit, any repairs, have a nice reserve, and etc.

Just keep in mind that even though you get approved for the HELOC, you still have to get approved for the loan on the investment property. Make sure to talk with your lender (the one for the investment property) about your pre-approval, and sourcing your down payment from the HELOC, first, before getting the HELOC. You don't want to get in a situation where you exceed the debt to income ratio. Also, some lenders might have an issue with you sourcing a down payment from debt. So just make sure to ask up front.

It definitely depends on the existing leases and state laws.

I'm an agent in NH and when I assist new investors using FHA or VA financing on a small multis (very common) we typically find properties with a unit vacant or tenants on month to month leases. Listing agents and property owners around here are very good about making sure this is the case prior to listing to make it easier for an owner occupant since they get more money from an owner occupant.

If tenants are month to month, it’s always best to have the seller give them notice and get the tenants out by final walkthrough. If they are still there, extend closing until they are out. If you don’t do this, you take the risk of a holdover tenant remaining after closing and now you have to evict to get them out. Not a great first month. Just make sure it’s in the purchase and sales contract that the seller gets the tenants out and delivers property with vacant unit. They will be out of there before closing easily.

If tenants are on longer lease, again make the contract contingent on the seller getting a tenant out (cash for keys?). It alleviates the burden on you. A skilled agent can negotiate it for you.

Typically Lowe’s. They generally have good prices on appliances and I try to use the same appliances in every unit, replacing them as they wear out. Best time to buy is around a major holiday weekends. I have furnished a number of freshly renovated units with all new stainless steel appliances very cheaply that way. Of course when the dishwasher goes you can’t necessarily plan for that, but they are still reasonable.

Hold over tenants can be very challenging. You often don’t know if they were good or bad tenants under the previous owner, paid their rent on time, and etc. Often the change of ownership, coupled with a change of lease terms can make the transition difficult. They often try to teach you how things have been managed at their home, which is never good.

When deciding on new rental rate, definitely review state laws, but it can be best to raise the rent all at once. It may cause them to move out (which could be a good thing anyway), but if you get caught trying to play catch-up and keep pace with rising rental prices, it may be more than they can handle anyway, better to know that up front.

A couple other tips, get them into your lease as soon as possible and don’t rely on the previous owner’s lease. Also, if you don’t get a thorough application and credit/background from the former owner, make the tenants go through a full application process so you have all their info on file. I typically pickup the screening fee for holdover tenants, but the info will be invaluable if you need to evict later on.