All Forum Posts by: Melinda Ching

Hi all, we are planning on residing our 3-unit multi-family house and also blowing in insulation to help with utility bills. We have asbestos siding in not so great condition... so taking off the asbestos, blowing in the insulation, and residing the house will take at least a week to two weeks to do. Our tenant works from home and has already complained about the loud construction next door (they're adding 3 rooms to their house so lots of construction noises). 

We are trying to figure out the best way to let her know that we are going to reside the house. We want to giver her enough of a heads up. Is a month too soon to give her notice? Or should we plan for giving her a 2 months notice. Also, what is an appropriate rent reduction, since the construction noise will likely bother her. 50%?

We appreciate any and all advice/suggestions.

Thanks,

Melinda

My partner and I bought our first multifamily a year ago. We're house hacking and it's been great working on the property this last year. We are in the midst of deciding how much to raise the rent and we are looking for advice. We include utilities in our rent, and we're predicting that utilities will go up significantly next year. So on one hand, we need to raise the rent to cover those costs. On the other hand, we don't want to raise it so significantly that our tenants will leave.

Does anyone have recommendations on what we should do or look into? Our average monthly utility bill was insanely high this last year. I created a spreadsheet and increased utilities by a set percentage to see what the average per month utility bill might be if the average oil goes up 50%, electricity increases by 20%, gas goes up 30% and water up 10%. These are numbers I estimated based on the current trend from this site. https://www.theguardian.com/us-news/2022/mar/13/us-utility-bills-energy-prices-increase

This is our first year as landlords so we appreciate any honest feedback, as we know we have a lot to learn!

Hi all,

I'm new to the creative financing world of REI. My partner and I are talking with a seller about possibly seller financing a property to us. She claims that because the multifamily is owned by her business (an LLC), she can't owner finance it.

Is this true? I don't think it is... she also has a mortgage on the property, so our hope was to buy it subject to, take over her mortgage and then have her seller finance the remaining equity to us.
Does anyone know if a house is owned by a seller's business, can it still be owner financed? Any other thoughts? We are totally new to this. Thanks in advance!

Thanks for the replies @Theresa Harris and @Nathan Gesner! In the area that we are located, it seems to be a big disadvantage to not have in-house washers and dryers. The laundry mat isn't a convenient walk. The third unit will have it's on separate unit so only the first and second unit would be using them. Nathan, have you experienced a lot of issues with tenants getting upset over laundry?

@Derreck Wells Thanks for your post - I apologize for the really delayed response. In this hot market, we didn't find a house for months. We just closed on a multifamily though and it's from 1870, so most certainly, has lead paint. We are in MA so I'd love to hear about the process and about the liabilities in MA as well.

Feel free to PM me.

Hi BP community,

We are working on a multifamily we just purchased and trying to plan where to install laundry machines. Currently the 3 unit does NOT have any laundry hookups. Our thought was to place them in a common back entry way, behind the door. So basically, when the door opens, it would be able to open and make a 90 degree angle, and then it would hit the laundry machines. Would this be a fire hazard? The door and exit is still functional, it's just that instead of swinging open the 180 degrees, it would only be open 90 degrees because we'd place the laundry machines behind the door.

You can see in the diagram the entry door - again, this is the BACK entry, not the main entry. I'd appreciate any thoughts!

Thank you!

Hi Dan, thank you. I appreciate your response! We didn’t even consider renegotiating by asking our deposit back as an option. I guess my question is, how can you renegotiate the deposit if they have the check? Can’t they just deposit it without going to court?

I should have added some numbers:

Listing price: 270,000
Accepted offer: 220,000
ARV: 375,000-400,000
New Rehab:~150,000
Old rehab: 70,000
Rents: unit 1 with Tenant A garage: 1300 currently and unit 2: 800

Total Rents after rehab: ~2500-3000

We can either walk away, losing our 5k deposit, or resubmit another offer

Hi all,

I'm seeking advice for purchasing a property. This property is a duplex in need of a lot of work. It is a 2 unit PUD, with one of the units with a large garage. We placed an offer after walking the property with a contractor. There's a ton of work that needs to be done including roof, siding, septic, as well as interior rehab. We were unable to see one of the units because the tenant (lets call him Tenant A) is at high risk for COVID, but we were told it was in decent shape. That current tenant rents out the garage as well. We offered a price based on rehabbing one of the units and fixing up the garage exterior (we could not access the inside)

During inspection, we learned a lot. There was an illegal unit above the garage the we initially thought the owner had put in, but it was actually Tenant A who had built it. It was taken apart. Tenant A runs a plumbing and heating company and did some work on the garage himself. He also put an illegal studio in one of the garage bays with a bathroom... I should also mention that Tenant A has a ton of crap on the property. He uses the other 2 garage stalls as storage for his plumbing stuff (almost impossible to walk around) and has several cars (buried in the snow) and even a semi-truck on the property as a storage unit.

Our initial plan was to fix up both units and the refinance them separately and attempt our first BRRRR. We offered with Tenant A staying as tenant at will, thinking it would take him longer to move all of his things since the snow has to melt. We were going to rehab tenant B's unit and rent it out and then ask Tenant A to leave. However, now we are reconsidering because the tenant seems so deeply entrenched in the property. He also did some work on it himself. During the inspection he stayed there, since he was vaccinated and didn't have any other place to go. The whole time he was pointing out things that were wrong with the place, and kind of just talking a lot. It honestly seems like Tenant A was taking advantage that the owner lived out of state and is probably retired, with little cell service. Tenant A seems to have just done whatever he wanted with the property.

TLDR:

• -We put in an offer too high 
• -post inspection our rehab costs are about 50k higher
• -during the inspection, lots more issues came up
• -potentially difficult tenant

We are pass our due diligence period, which sucks. We could walk away from the property, losing our deposit of 5k or renegotiate a price. Any advice would be very very much appreciated. We are eager to start our investing journey, but don't want to be total chumps.

@Elise Marquette that's interesting, I didn't know that. Thanks for sharing that