All Forum Posts by: Matthew Dunn

I'm assuming out of that $245 - $280k I'd be paying the remaining loan off, leaving me around $45k $80k in actual cash? 

Dear Fello BP Community,

I am somewhat new, we've had our first fourplex for around 6 months now and have just completed rehab on two of the four units, with the plan to rehab the remaining two. We've had some great success with increasing the rents so far, both original units pre rehab were pulling in $675/mo, after remodel we are at $995 and $1,100 respectively. However, they both had a LOT of rehab, we spent $14k on the first one and $16k on the second, with new kitchens, bathrooms, appliances, flooring, paint, lighting, electrical panels. We've also just replaced three complete HVACs for $9k. So far we are at around $43k in rehab including landscaping and exterior repainting. We will be starting rehab on the third unit in January and this needs around $10k-$11k. The last (fourth) unit will be around $7k. This puts us at around $60k total rehab. With all of this calculated with new increased rents, we will be at around 12.7% CoC and $1,365/mo cashflow at a cap of 9%.

We used a HELOC from our primary residence to pay for the rehabs and we would like to pay this off ASAP, so I was considering our options with a cash out refi. We purchased with a conventional loan at 4.8% with 20% down, purchase price was $275k. We owe around $204k, we've increased rents from $2,765/mo to potentially $4,100/mo. With the value adds done, I would predict the ARV to be around at least $350k, but this is being conservative and not factoring the rent increase to the value.

Do these numbers sound feasible for a cash out refi? Any other approaches recommended? 

Many thanks!

Matt

Hi Jd, I originally thought the same, and as you maybe able to tell, I'm fairly new. However having read the BP book on managing rental properties, it makes it quite clear to only use in county cosigners. I guess its very much case by case, but I try to be consistent and this applicant had too many unknowns. So with the out of state cosigner I was concerned that should the renter simply decide to leave, not pay or trash the place, I'm left with a cosigner thousands of miles away that I may not be able to connect with. Am I on safe ground having not proceeded with this application? 

Thanks for the quick reply. She claimed she's a lawyer with 7 figures in the bank. With an attitude like that, should something of happened and I needed the cosigner, it would of been hell. 

Dear Fellow Landlords,

I just had an unfortunate experience that I'd really appreciate some input on.

We have advertised an apartment in FL and did some showings recently. I received an application from a student who goes to school nearby the apartment. I prescreened them and they don't meet the min credit score, or income, they also have no rental history. But they did say their Mom would cosign for them. I get that they are a student, so these items are quite common. They sent in the application and upon reviewing it, his Mom lives out of state, he did not include his Mums employment information or current address. I didn't run his application fee as I wanted to get more information on this situation. I've read in many cases its not advised to use a cosigner out of the county. I spoke with his mother and she was very aggressive towards the fact that I would not allow her to cosign due to her location. I explained that should I need to reach her in the future, being that she is located so far away could make things complicated. She was not ok with that and claimed I was discriminating them on her location. She claims she has other children who she has cosigned for out of state without issue. We debated the point and were not getting anywhere. The call ended with her telling me she would be reporting me. I feel I was reasonable to not take an application fee and do due diligence on this area, would love to hear your feedback.

Thank you

Great feedback, thank you all for the speedy replies! I replied requiring the late fee be paid, but did not make mention of the termination clause. I'll feedback once I get a reply, so you can see what kind of reaction I receive. 

Dear Fellow Landlords,

I just placed a new tenant into my freshly rehabbed 2 bedroom apartment which is part of a 4plex. As I'm new, I feel like I screened her thoroughly and she came back good on all the checks I made following Brandon's screening guide. She moved in on September 1 and since we are based in FL, hurricane Irma came through just a few days later causing us to loose power and I believe she left town for a week. She just sent me a message today stating that, since she was not working for a week, she cannot pay Octobers rent in full. She would like to pay half on time, and the remainder on the 6th. 

I'm in two minds about this. Everything I hear and read states I should continue to charge a late fee no matter what. My late fee is only $5/day after the 3rd so we are only talking $10 in late fees. My lease also states that "if tenant is late paying on two or more occasions, landlord and landlords option may terminate the lease". 

This is what I feel would be an appropriate response:

"Dear ####, thank you for informing us of this situation in a timely manner, it is appreciated. Hurricane Irma was a very bad situation for many of us in the SW FL region, we are all very thankful it was not as bad as it could of been. However, as I'm sure you can appreciate, here at ABC Properties, we also have overheads to pay for and none of our accounts are allowing late payment, we therefore take late rent payment seriously and as stated within section 1 of your lease agreement will need to charge you a late fee of $5/day until rent is paid in full. Please also note that should rent be received late on more that two occasions within a 12 month period, ABC Properties have the discretion to terminate the lease. Regards, Management"

Too harsh? Would welcome thoughts?

Thank you!

Matt

Thanks for the replies. Yes this work isn't in depth enough to require a GC. I have found a guy though my painter that I'm looking to use. He comes with good references. Hopefully he works out as I have a couple more units to do..

Dear BP community, I'm the owner of my first quadplex in Clearwater FL, we just recently completed the rehab on the first unit which came out really nice and is now rented. However I'm just getting started on the second vacant unit and am in need of a contractor that specializes in:

Kitchen cabinet installation

Tile flooring

Drywall and texturing

HVAC

I searched through the forums already and made some inquires, but the contractors I spoke with are all quite far from Clearwater and want to charge for travel time on top. 

Many thanks!

Matt 

Many thanks for the advice, much appreciated! I'll track down a company who can identify the odor and perform the cleaning and get itemized receipts.