All Forum Posts by: Ralph R.

@Jonathan Sikes. One thing a person needs to remember. The last crash took a few years to set up and was the worst crash in 70 years. Many lending laws were changed to try to prevent this from occurring again. In short the odds are what may happen is a correction of a lower magnitude as opposed to a major crash. My personal strategy is to make sure my properties are really providing a solid cash flow. I have eliminated all but 1 balloon type loan. It’s a 10 year balloon. I have shifted my loans around putting heavier 30 year loans on some properties (cash out re-fi’s) and paying off others. In a bad time the heavier mortgages could be sold if you can’t hang on to them and you own the remaining ones debt free. By paying off all personal debt, (my car) and paying of my highest yielding properties I increased my cash flow by 600 a month. The car payment I lost was 400 a month. My primary re-fi dropped the payment $200 a month. Total gain is 1200 a month. The total payment increase was 300 a month. That means I gained 900 a month in usable cash. ($1200 minus $300 =$900). That’s not the end of it. After the new loans I have only one property that’s got a pretty close cash flow. It flows about $150 a month after vacancy cap ex management etc. all of the expenses. The rest of the payments went up only a little, 100-150 a month. They still cash flow very well. If I have trouble I would sell the heavy debts first and end up with paid off properties. My idea is the hotter the market the heavier the down pmnt, and the lower the debt. Buy cash if you can. In a slow market buy using more debt and less of your own cash. Just a thought. RR

@Ryan Proffit @Jingwen Dunford. Like the other poster indicated she has established her tenancy by acknowledging the higher rent. She has tenant rights whatever they are in your area. She is month to month. You need to get her out accordingly. You failed to get estoppel agreements signed prior to closing so she has no obligation to sign your lease. If you have to have her signature then your choice is a 30 day notice. This is not an eviction but a notice to quit. If your not able to provide proof of the condition of the apartment when she moved in ( in 2006?) you are going to have difficulty assessing what damages she is responsible for and what may have been pre existing. A land lord that doesn’t raise rent is likely not doing maintenance. This may make it difficult to keep any of her deposit. In Colorado you must provide documentation to the tenant listing all damages and all costs they are responsible for. A savey tenant can get up to 3 times their deposit back if the landlord exaggerates this. I don’t know the rules in your area. It is not the tenants fault the rents are so far behind. I make no judgement on the kind of business you may be running but if you raised rents from a 2003 or 2006 level to a 2020 level at one shot it’s pretty much self evident. RR

@Nick Liddell you need to check the lease you have with the friend and or your local tenant rights laws. As a landlord you need to know this stuff any how. RR

@John Gorbandt. I live in a place with almost no duplex’s because each unit was sold as a town house. It looks like a duplex but in reality it’s 2 townhouses. Check the tax assessor’s web site if it’s one property than it needs one loan. If it’s 2 townhouses it’s 2 loans. That being said you could buy one side live in it for a year then move out and rent it. RR

@Sachin Sharma After reading all the posts I noticed that you rebuked all suggestions, and all criticisms ( traffic noise, neighborhood). No pets usually cuts your tenant pool by 50%. You don’t seem to want to lower your price significantly so that leaves about 1 option. Sit on the house vacant until summer gets here and the thing rents. For all practical purposes You are standing in your own way RR

@Ryan Proffit. She’s gone Dark on you. This never ends with what you want. It ends with what the tenant wants. I deal with 40 tenants in my storage facility. When they stop talking they also stop paying, getting behind so far they can’t pay and you evict or they pay and move out. She has tenant rights whatever they are in your state/area. If you didn’t get an estoppel signed prior to closing you can’t force her to sign a lease with you either. Secondly it’s not professional or good business practice to buy a place and raise all the rents immediately. If you have to do that your due diligence was in error. You will be lucky if they don’t all move out. Your lucky she paid you the increase. She was under no obligation to do so. That’s why many tenants move out when a property is for sale, or is sold. Next time buy the property, cut the grass, fix the place up a little show the tenants you care about the property, then raise the rent. Buying it and immediately raising the rent is going to to be hard to live down. RR

@Katie Turner. The first fly in the ointment is finding a rental in this market that will cash flow with 3.5% down. That’s going to be very hard to find. Most conventional loans are going to want 20-25% down. You can buy a “second” home for around 5% down. Trouble is you cannot rent it out on a regular basis. They also require the house be 3 hrs away from your primary residence. I bought a second home and because I had rentals already I had to sign a notarized affidavit that I would not use the house as a rental. I used the house as a second home. Then relocated to the house, then when I purchased another home in the area I rented it for about 6 months. Then sold it and put a big chunk in the bank. It was a poor rental due to the low down payment but a great appreciation play. I owned the house 2 and 1/2 years. It went up about 70k. I lived in it, vacationed in it,and after purchasing a home close to it I rented it out. In your case tho using a low down payment second home mortgage will produce a poor rental located 3 hrs from your current home. HOWEVER! Your fiancée has a home and used her 1 time low down payment. You have not used yours. The requirement is you live in it for a year. Sooo you could use your loan to buy a home, live in it for a year and then move back. Still going to be tough to find a house that pays with only a 3.5% down payment though. RR

@Ralph R. Typo in above post. “Court order to pay back rent”

@David Tsedaka. It’s not worth your time and energy to try to get blood out of a turnip. Reporting to a collection agency will cost you a percentage. File the eviction and do what you have to to get it on their credit report so the next landlord will see it when he runs his credit check. Fire that PM and move past it. Chasing tenants for back rent is throwing good money after bad. You won’t ever get whole again. This stuff comes with the territory. Get that thing re rented and look out as best you can for the next landlord and move on. Perhaps his previous land lord could have saved you this loss if he would have followed through and had a court order to pay you back rent on this guys credit. RR

@Ryan Bonheyo I have 7 mortgages and it hasn’t hurt my credit score. Of course they are all current. I have no credit card debit, (but carry high limits) and no car payments only realestate loans. My w-2 job won’t even begin to make the payments on my rentals. RR