All Forum Posts by: Melissa Hartvigsen

Yes, you should go in the day after they move out. 

Hello @Renee Ward, 

Appraisals are an opinion of value. There is a lot of subjectivity, and two appraisers will value a property differently. With multifamily properties they typically do not use sale comps because the recognize that part of the value is in the revenue the property generates. It is more common for the appraisers to come up with a value using two methods: income approach (based on the lease amounts or their opinion for market rent on vacant units) and cost approach (if you had to re-build the building from scratch).  The property being well maintained will hold minor weight on the opinion.

When you say the value is not that different than it was in 2014, my first though is to ask if rents have increased since then.

The appraisal is for the bank's benefit so they can feel comfortable with their risk backing your loan.  You already have an appraisal at a value needed for the bank to approve your loan, and the numbers still work.  If I were in your shoes, I would move on.

Cheers,
Melissa

Hello @Dustin Le,

I own an manage my own properties in Oregon.  I recommend the following:

1. Confirm that the vacate notice you served is correct. If you have even one tiny mistake, you could lose at the hearing and have to start over.  (In the Portland Metro area tenant attorneys show up to role call before the first appearance for the eviction hearing and offer to represent tenants.). If your notice is correct, proceed to step 2. If not, you may want to consult with a landlord tenant attorney before moving forward.

2. At least 24 hours prior to the end of the expected date for possession, serve a notice to enter. Go to your property and confirm if your tenant is there. There is a chance the tenant will have actually moved out and an eviction would not be necessary. If the tenant is still there go to step 3.

3. File a Forcible Entry Detainer (the FED is the first step in the eviction).

If you are not comfortable navigating the court filings and serving court documents to the tenant, we have local eviction service companies that can handle it for a small fee. 

Please send me a private message if you need recommendations for landlord tenant attorneys or eviction service companies.

Good luck!

Melissa

Quote from @Moises Rodriguez:

@Melissa Hartvigsen, and @Theresa Harris, thank you for responding. It's quite overwhelming the different ways to go about doing this. A multi family property would be ideal to generate some cash flow, but would it just be easier for us to purchase a single family home using the VA loan, (0 down) move in for a year, then rent it out? My wife is nervous about doing a Home equity loan because we worked so hard to pay it off in 8 years, and if something happens we can lose the house.

You are welcome!

I am sure it is very overwhelming! I think you should do a bit more research before making your decision. 
1. Run the BP "rental property" calculator on a couple of single-family homes, and a couple of multi-plexes. That way you can compare the potential returns and weigh that against your risk tolerance. This should help you narrow down the type of property you will get.

2. Interview and find an investor realtor in your local market who can guide you through the process. You will need their insight into your local market and tenant laws.  Make sure they have experience investing in the way you are looking to do it.

3. Find a good lending professional. They will be able to help you run numbers and guide you on the best way to structure your deal. HELOC vs cash-out=-refinance, or move out of your primary and put 0% down on your purchase.

Best wishes for success!
Melissa

Hello @Brooke Gaston,

I have five rentals and use apartments.com. I collect rent from my tenants there, and also track my expenses. It is user friendly and intuitive. The phone app lets you take photos of your receipts and is quick to enter expenses. At the end of the year, I download the income and expense report for each property for doing my taxes.

It has other features that help with managing my rentals like advertising, and credit/background checks. 

If you have substantially more units you may want to look into a paid software like AppFolio or Buildium. (I used these for 300+ units when I was a property manager).

Cheers,
Melissa

Hello @Moises Rodriguez

The banks you spoke with recommended that you live there for a year so you can take advantage of 0% down payment as a Veteran.  If your goal is to get into the investment property with the least amount of money out of pocket this is the way to do it. Ask yourself, is the money you spend to move twice (once to the investment property, and back to your house after renting out for a year) is worth not putting $175,000 down on a $700,000 property.

For conventional loans here are the down payment amounts as an investor.

1 unit = 15%

2 unit = 25%

3-4 unit = 25%

Above 4 units is considered commercial and would have even higher down payment requirements and a shorter loan term.

If moving is not worth it to you, then you should consider a HELOC on your primary residence. Run your numbers to see if the money from the investment will cover the new loan and the HELOC payments.

Quote from @Sophia N.:

This is helpful insight, thank you. Where were most of your properties based?

You’re welcome! The section 8 properties I was dealing with are in Portland, Oregon.  The program is federal, so the guidelines are the same regardless of what market you’re in. The only difference is the rent amount that they will approve.

Quote from @Colleen F.:

@Melissa Hartvigsen  Narragansett is  beautiful We live here in the summer and fall. This house is in south Kingstown which is a similar market where year round rentals are hard to find. Comps are hard for this property and the test listing and research was showing I was on target for rent not nearly this many responses. If I price too high they expect a newer house and all the showings are short timers or looking for something higher end but maybe I should have gone higher but the reality is they have to heat the house too and it is old. I did learn not to do not do showings for some. Too many pets or I got one with 3 goats or several roommates. 

I haven't tried the don't send any more applications after receiving  2. I think I would up my number because I do put long term renter to the top for this property over someone transitional to the area but if I state that upfront then no one tells you anything.  In the past about half who look don't apply.  

I understand your concern about pricing high. I am not sure if this was clear to you in my first response, but that price isn't static. You will literally drop the price every two days until you get to 5-6 leads per day. That means you hit the correct price.  

In your response to @Nathan Gesner you said you did a test listing 2 months ago and got fifteen inquires.  Rental prices are highly volatile, and I would be re-checking pricing no more than one week before I list the property for rent.

I limit applications to two because in Oregon we are required by law to process applications in the order they are received and must refund application fees to any one whose application I did not process. That probably is not required where you operate, but employing this strategy will still save you time. If your first two applications down work out, you will have a few more people that wanted one and you would email them the application next.

Because you prioritize long term tenants who will take care of your property, why not incorporate this into your initial screening questions as a requirement to view the property?  Only make appointments for the people who "pass the long-term tenant criteria" you are seeking.
"How long did you live at your current rental?"
"Why are you moving?"
"How long to you plan to live at your new home?"

Hello Jared,

In addition to looking on Furnished Finder, I would look at rooms for rent on Craigslist in the housing section under Rooms Wanted, or Rooms Shared. On Craigslist, you should use the "Map View" so you can see what rooms close to you are charging (a room across town isn't a good baseline). Then you can see what renters are willing to pay, and way other people are charging for a room.

Another site to consider, since you are in a college town is roommate.com. They have postings for rooms, and people looking for rooms to rent.

In general, if you are furnishing the room, it will rent for more than if the room is unfurnished. The decision on furnishing depends on who you are trying to attract. If you are looking for college students, you can usually rent the bedrooms unfurnished and charge a portion of the utilities. Though, you should make sure the living room, kitchen and dining room are fully furnished.  If you want to attract travel professionals like nurses or contract workers and digital nomads, they want everything to be furnished and utilities to be included in the price.

Best wishes for success,

Melissa

Hello Jean-Marie,

I see that you plan to use full sized beds.  Queen sized beds are more popular, and King-sized beds are rare in MTR which makes them an attractive option. Would either of your rooms allow for a bed larger than a full?

Whether or not you should furnish both as bedrooms, or one as an office depends on what your competition is doing.  Look at the other listings in your area and price point. If there is an abundance of two bedrooms and not many with a dedicated office space, then you should go with the office space. 

Cheers,

Melissa