All Forum Posts by: Matthew Lessard

Hi All,

My tenant of 3 years has given me his 30 day notice at a rental property that I (and two partners) have had for 7 years. When I first bought the place I was living in it and renting the rooms out. Things changed and I ended up moving out of state and continued renting the property. Admittedly, I did not know much about real-estate investing at the time and just bought the house to live in with no plan to leave. It has worked out well from an investment standpoint (decent cash flow) especially considering the initial intent was to own and live in the home. 

I have been education myself on real-estate investing for some time now and have a completely different point of view. Unfortunately, my partners don't see eye to eye with me on certain investment strategies and for that reason I think it is best to sell so we can all move on to other things.

Does anyone have suggestions on a graceful exit? What I mean is, is there a way to sell it without the money we make getting taxed multiple times (sales tax, capital gains tax, etc.)? I would love to 1031 it into another property but that doesn't disconnect me from the current partnership.

We also considered a cash-out/refi and then selling, but I am not sure if that makes sense. 

We have equity in the home and it is a great time to sell. Any insight is much appreciated.

@Cara Lonsdale thank you for much for the insight, it is much appreciated!

@Jon A. and @Chris Mason Thank you both for the insight, I really appreciate it.

@Jon A. It sounds like we are in a similar situation. I have been looking into VRBO as well. It seems like it can be lucrative but also requires much more time. 

Hi All,

My tenant of 3 years gave me his 30 day notice. In the past I would use the local real-estate association lease template as my lease along with a background check. I think its time to re-evaluate my lease and tenant screening process. However, I need some input. Please see below.

• 
  Should I have a local attorney take a look at my lease and make adjustments to it based on the laws of my state?
  
• Is there a good rule of thumb for the monthly income requirement of a tenant?
• Are there other forms/addendums I should include in the lease such as tenant utility startup, house/neighborhood rules, pet agreement etc.?

Any other input would be much appreciated. I want to make sure I am doing this the right way for my next tenant.

Thanks!

Thank you at @Jon A. and @Chris Mason, this information is very helpful. It is hard to see the value in doing a refi/cash out for a rentl as it almost seems like a penalty. I also thought about doing a 1031 and selling, but I would like to keep the current rental as the cash flow is good. 

The thing that doesn't sit well is I have all this equity sitting there doing nothing. Any advice on how to proceed? I almost think its best to stay where I am and continue to pay down the current mortgage. Although it would be nice to do something with that equity. 

Hi All,

I am looking to refi and cash out on an investment property. It has built equity over the years and I would like to use the cash to purchase another rental property. My mortgage broker informed me that since I am refinancing/cashing out on a rental property my interest rate will be higher (about 1%) compared to if I actually lived in the home. 

Is this correct? If so, it may not make sense to cash out if the monthly mortgage payment on my current rental will increase due to the higher interested rate. Is there any way around this?

As always any input is much appreciated.

Thanks!

These are all good ideas, thank you all for the insight, this is super helpful!

Hi All,

My tenant is getting passively harassed by a neighbor. I do not know who the neighbor is but they seem to be targeting him. He has been a great long term tenant and I am confident he isn't doing anything to provoke such action. 

The latest incident was the neighbor dug through his trash, found a few bags that weren't tied all the way and reported him to the city. The city eventually hand delivered a letter to him that he needs to tie his trash bags. If you are thinking that this is a joke I completely understand. Unfortunately it is not, this actually happened.

I feel terrible that he is going through this and also frustrated that I cant take any action as I don't know who the culprit is.  Also, I do not want to lose a good long term tenant or have the same thing happen to future tenants. Does anyone have advice on how to handle this? I thought about speaking with an attorney but I don't know what good it will do since I don't know who it is and have no proof. 

The house is located in a good area with an HOA in Tempe, AZ. Any input would be much appreciated.

Thanks,

-Matt

@Kalpesh Gada

This is all good advice. As a native to Tempe I can tell you that I have never seen an above ground pool. I am sure they exist but its really not a thing in the general PHX area, so like @Melanie Johnston suggested - forget that idea. 

I have a single family home in Tempe that has a community pool. My tenants love it in the summer time (as most residents in PHX do!), its an added benefit to my rental and I don't have to worry about the problems that come with a pool.

I know other investors that have properties with a pool and it can be an expensive proposition. 

Here are some things to consider:

• Maintenance costs - especially during monsoon season. If you are not familiar with this season I suggest doing research. While its my favorite time of year, the storms can be quite volatile which will require a much more frequent cleaning schedule. Also, algae can grow very fast in the summer, especially if the pool is not properly maintained. You will also go through more chemicals in the summer.
• Monthly electrical costs - the entire pool system needs to be running at least once or twice a day which will add to the electrical bill. Between that and the normal electricity costs in summer (mostly from running the air conditioning) it can result in a very high electric bill.
• Repair - resurfacing the pool deck, the inside of the pool itself, and also system repairs can become quite costly.

I understand that the tenant will be required to pay for some of the monthly costs (such as the electric bill), but keep in mind that it could deter some tenants. 

This is why (as @Wes Blackwell mentioned) finding an investment property that has access to a community pool is a win/win. Your tenants have the luxury of a pool without the hassle.

If there is a community pool there is also likely an HOA, so as Wes mentioned it is important to ensure they allow short term rentals, or rentals at all.

I hope this helps, good luck on your investment journey!

Thank you for the post @Joe Scheffold. I rent a single family home in AZ and I am now looking to get into the small MF space. I was looking into Jacksonville and Indianapolis as well. 

After doing some research I found that some of these other cities may be worth looking into:

Kansas City

Cleveland

Fort Worth/Arlington, TX

Atlanta

Vegas

Have you looked into these? Also, if anyone has insight on the above cities it would be helpful. I am trying to narrow it down as well.

Thanks,

-Matt