All Forum Posts by: Michael Masterson

Hi All, 

It's been a few months since closing so I thought I would circle back. Unfortunately CMHA will not adjust the rent to my desired amount even with supporting evidence that my house next door is generating $925 to their $625. I have some time before actually deciding to not renew but thats a fairly large gap so I assume I won't. 

It just so happens to be that this duplex is in Lakewood which demands pretty high rent if fixed up properly, but its just a few blocks from the city of Cleveland so they still base their market rents on that. 

Just food for thought if any of you are working in this market or looking at properties. You can get a distressed duplex in the $100-$125k range and rent out for $600-$700 as is. But with some tweaks (AC, new furnaces, updated kitchen/bath) you can easily get to the $900-$1000 range. Its not unheard of to fetch $1200 per unit but it needs some unique qualities to just the standard duplex. 

@Brian Garlington I've been actively working on this deal for months so I don't foresee wanting to back out pending all goes smooth with financing-however I will definitely connect and when I get my feet wet with the voucher program we should talk. Curious-what PM company are you using?  

In my talks with other CMHA landlords its very very difficult to initially get approval but if you're in the right market there will be pretty substantial waitlists to fill your property. Suggested route has been purchasing a property with a pre-existing voucher much like I'm doing as opposed to trying to pass inspection and meet the timeline requests with a new purchase. 

Good stuff. Thanks a lot for the info @John Underwood

Hi Everyone, 

I just recently put an offer on a duplex in Cleveland area and one of the units is classified as affordable/section 8. I purchased with the intent of honoring the current contract and not renewing next year, renovating once vacant and driving the rent up. 

However looking on the CMHA (Cleveland Metropolitan Housing Authority) website it appears that a 2bed 1 bath unit actually should be paying $250ish more than what the current owner is receiving, and would be right in line with the rent I assume to receive post renovation. 

I purchased the property being content with the current monthly rental income; however of course I would take any additional cashflow-especially if its "free" money and if I can avoid having to do any major or high-end renovations and find new tenants next year. 

Has anyone come across this scenario? Do you have any guidance on what I may be able to do with the current contract or what approach I should take to increase the rents at the next renewal? The current contract is through May 2019 so I assume I'm stuck receiving that monthly amount till then but I'd like to be way ahead of the game at renewal so I know what needs to be done to either increase with CMHA or decline my renewal. 

Hello everyone, 

I am a relatively new landlord (less than 5 years) with a fairly successful duplex that is fully occupied. I recently closed on a HELOC (on this property), and have a fair amount for a down payment in cash reserves. The issue I will likely come into with conventional financing is DTI requirements. I have over 2 years of property management experience, but Sched E only shows rental income for one of the units.

The area I am looking in consists of 2 types of properties. Turnkey beautifully renovated multifamily which demand high(er) rents, or fixer-upper multifamily which are either vacant or occupied by lower end tenants. 

My thought is I would be able to find a loan that would qualify me off what potential rent would be (if vacant) or what the rent is currently if occupied on a fixer-upper. If I can find a lender who lends this way I'd be able to get 2+ fixer uppers as opposed to dumping all my cash to buy the beautiful property. 

I'm capable of fixing the property myself as I did with my current duplex. But obviously as you begin adding liens to your profile DTI gets in the way.

Any younger investors in a similar situation? Or veterans who started out this way? 

Hi NA Waddell I was in a very similar situation as you 6-7 years ago. My personal opinion is going owner occupied MF first, from there you will be able to save significantly more so you can focus on your next deal. Depending on the area you can typically cover your note plus some. Additionally to piggyback off Marcus Hendren I agree with low down payment financing. You can typically put as little as 3% down. But what's golden on owner occupied FHA is "seller concessions". If you find a property at a reasonable price you can sometimes have the seller give you a substantial amount toward your down payment + escrow, closing, etc. If you'd like you can PM me for more info. Most agents should be able to explain to you the power of concessions if you're new to This world. Within a couple years you'll be sitting on several units without changing much with your current investment strategy.

Bryce, If you take a look on Amazon you should be able to find a "filler cabinet" to your exact Dimensions you're looking for. If that isn't cost effective Home Depot & Lowes sell blank filler pieces you can stain to match your cabinetry. It's a good alternative to custom.