All Forum Posts by: Mike McCarthy

@Osvaldo Benavides depends how quickly you want the cash out to pursue your next deal. Many here want to move quickly, so 6 months (or less) is key. But if you’re planning one property a year, there’s no harm in waiting 12 months. The extra 6 months or rent with no large mortgage payment can be nice.

Long story short, depends on you and your goals!

@Vlad B. Need to check local codes. Some areas require permits and zoning for sheds and/or fences. Some areas get picky on set backs and such, while others don’t care much.

As long as it’s a purchased shed (not built from scratch), I don’t see too much issue. Worst case, you need to pay to have it removed when they move out. Fence, I would need to have installed by a reputable company.

I think for both you need to have a discussion on specifically what they are planning. A Rubbermaid 6x8 she’d purchased at Costco is different than a 10x12 wood shed built in place. Same with the fence, is it a 3’ chicken wire fence, or wood, etc.

Lastly, what kind of feeling do you have about these tenants. Long term, good tenants? Or pain in the rear? Feel free to tell them that you need to get everything settled out from the sale first, let’s re-discuss in February.

@Jason Sensi I’ve used Cozy (now apartments.com) for the application and screening process (and rent collection too). They make it easy, and the cost is paid by the applicant.

I tell my applicants to not pay for the background/credit checks at first. We review their application, then use the checks as a final double-check after we’ve almost approved them. I hate the idea of a tenant paying for those checks if they were going to end up 2nd or 3rd in the tenant process anyway.

@Mary Jay big difference between a refrigerant leak vs a water/condensate leak.

I’d definitely have the same contractor back once or twice to fix an issue... but after that, I’d get another company in and pay them. Then go back to the original contractor and the manufacturer for reimbursement.

Keep records of every email and phone call. Take pictures. If you decide to do the small claims court to recoup your money, you’ll need it.

@Will Fraser what is the issue? What does the lease say?

@Jeff Scully what helped you decide on a property in Florida? Most investors invest out of state when they are in exceptionally high priced markets (NYC, Cali, etc). I’d think there are lots of $150-250K options right around you which would give you more flexibility to view it, manage it (if you want), and handle bigger issues if they come up.

Similarly, have you considered house hacking a 2-4 unit place? There are definitely more loan options for your home rather than a rental.

Lastly, before I buy a place I always ask myself why is this person selling. If it’s a fully furnished rental in good condition, making the owner lots of money... do you think they’d be selling it? Most rentals are sold because the owner is sick of dealing with it - tenants, repairs, expenses, etc. of course there are occasionally exceptions, but they are exceptions, not the rule.

@Mark Ross I use Cozy (now Apartments.com) for screening and rent collection.

@Stephen E. with a few rentals, you can definitely look at commercial or portfolio loans. The underwriting is more focused on the asset rather than you. You won’t get quite as good terms as Fannie/Freddie backed loans, but nowadays, the terms aren’t half bad.

Absolutely get another estimate and inspection. I have a quote for about 4K to install a stainless steel liner with firebox cap (whatever it’s called) for a 3-story chimney. Waterproofing brick is usually considered a waste. Of course, I don’t know how degraded the mortar is on your chimney... but yeah, it all sounds way too high.

@Brendan Done when you refinance, you’re going to sign some docs stating that you’re planning on continuing to use your home as a primary home for at least a year. If you are planning on less than that, your rate will go up 0.5-1% as an investment property. Keep that in mind as you plan.

Definitely crunch the numbers. Make sure you’re including repairs, capex, vacancy, etc etc. but even a couple hundred $$ per month cash flow is worthwhile.

It’s also important to remember, as soon as you turn the keys over to your new tenants, they won’t treat the house the same way you probably do. It drives some people crazy since it’s not as clean, well-kept, etc as you kept it as your home. You need to make sure you (and family) can emotionally distance yourself a bit - it’s now a business and no longer your home.