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All Forum Posts by: Mike Austin

Mike Austin has started 8 posts and replied 47 times.

Post: Inheriting long lease on lower rent

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

I guess what I'm saying is that there isn't anything in the lease allowing me to terminate on sale, and the state also doesn't have a code allowing me to do that. I'm aware that there's a lease in place when purchasing, so I'm required to honor it. I can't evict the tenant just because it's been sold in Texas.

Post: Inheriting long lease on lower rent

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

@Account Closed Thanks. I don't think that's going to be an option since termination on sale is not specified in the original lease. I am going to include that in my own lease however so this is helpful!

Post: Austin Apartment Assocation?

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

Hi folks,

Is anyone here a member of the AAA? I'm considering paying the 200$ so I can use the standard Texas Apartment Association leases that are common in my area. Does anyone have any experience with these associations?

Any thoughts would be great...

Thanks

Post: Inheriting long lease on lower rent

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

Thank you. I am going to gently ask them if they'd accept a cash for keys deal at some point, but will plan to honor the lease until it expires. I have plenty of rehab to do to the exterior and to the unit I plan to occupy so I'm not in a huge rush to take on more rehab costs.

Post: Inheriting long lease on lower rent

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

I just had my first ever offer accepted for a duplex that I planned to owner-occupy. I got a discount on the price because the property has been neglected and needs some rehab work. 

The property was listed on mls as having an active lease that ended on 07/2017 which I foolishly believed but when I received the actual lease which shows the tenant renewed until 07/2018. I'd have to inherit this tenant for 1.5yrs instead of the 7 months I was expecting. Their rent is 275$ under market and completely throws my numbers which I based on raising to market rent after rehab when the lease expired.

Assuming they're reliably paying rent, would it make sense to go ahead with my purchase, and keep them for the additional year? I'd lose a projected ~3300$ in rent increases but I would keep their side as-is without rehab and just work my occupied side & exterior. Am I missing something with this path?

Any thoughts would be appreciated since this is my first pass at this and I don't have any experience or much help through the purchase process.

Thanks BP!

Post: Jeff in Jacksonville Florida

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

I'd like to piggyback on Jeff's request and ask that anyone shoot me a line on properties in Jax. I'm in Texas but have family there so I'm looking around at possible buy/hold rental properties.

Post: Just put an offer on duplex with tenants, how should I prepare?

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

I am only one step ahead of you in the process. My offer was accepted so I'm going through inspections next week. I am planning on a separate bank account at least, and not going with the LLC until later.

I will have to notify the tenant I have that is on a M2M lease that they won't be able to renew their lease after Feb. Unfortunately, I am stuck with the other tenant until July. I'm hoping that goes smoothly and I can move in within a month of closing.

I'm running into all kinds of interesting problems like my insurance company may not cover the property since it is distressed. I'm hoping I can find a way to get something until I can complete the exterior renovation.

Best of luck, @Jonathan Perez!

Post: Should I use a portfolio lender?

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

I decided to find a local portfolio lender as well. I read that it's important to begin building relationships if you're serious about acquiring more than a couple of properties. They have been super helpful and very encouraging about my plans for investmenting.

Post: Piggyback(80/15/5) vs FHA Loan for Rental

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

Hi,

I've been talking with my loan officer about financing a multifamily property in my area. She mentioned that I might have the option to use an 80/15/5 instead of a 3.5% FHA loan. This would get my monthly payment lower since there would be no PMI and allow me to improve my cash flow. Has anyone ever used this type of mortgage to finance a rental property?

Are there any drawbacks to this? I will have to take out two mortgages, so would this limit my ability to finance more properties in the future? Any thoughts from an investor perspective would be great!

Post: How to furnish for cheap

Mike AustinPosted
  • Investor
  • Round Rock, TX
  • Posts 50
  • Votes 24

Do you have an IKEA in your area? It's very affordable and in-line with typical apartment quality. If there isn't one in your area, then look for one within driving distance. Just a thought! Good luck!