All Forum Posts by: Nathan Huyett

Hi everyone,

I am interested in putting an offer on a foreclosure next to my house. I haven't had a chance to do a thorough walk-through of the property yet, but based on what I know about the place from living next door for several years, there appears to be a very reasonable opportunity for profit. Based on the amount of traffic through the home over the past week, it appears plenty of others think so as well. There are several factors in play that make this deal more complicated. First, my primary residence is a newly constructed house immediately next door to this vacant property. I also own a three-unit apartment building directly across the street. Obviously it's in my best interest to have control of this property one way or another. Second, my wife and I are potentially looking to sell our current primary residence and purchase a larger home. Depending on the outcome of the vacant property, the ability to sell my home could be impacted. Third, my primary debt (aside from mortgages) is student loans, which is driving up my DTI to the point where it might preclude obtaining a traditional mortgage. I'm leaning towards flipping it due to the large difference between the listing price ($72,000) and the ARV of approx. $150,000. Of course, once I flip it, I'll no longer have control anymore. I think once I can do a thorough walk-through and really nail down the approximate repair costs, I'll get some clarity as to whether I do a flip vs. buy and hold. In the meantime, I'm thinking about using a hard money lender to have the proof of funds needed to submit my offer. If anyone has any other suggestions, I'd be open to them. Does anyone have experience with hard money lenders that could suggest a good company to use, and could anyone provide some clarification as to how much I'll need in cash up front?

Thanks in advance for the advice!

Nathan Huyett

Our second-floor tenants reported rodents a few months after moving in. Judging by the size of the rat we found after the exterminator came out, it's likely the rat had been living there for a few years before us. Since then, we got bi-monthly treatment for both rodents and insects, which costs approximately $400.00/year. The biggest issue that I've run into is tenants expecting me to let the exterminator into their units when they're not home. As a result, it's now written into the lease that landlord pays for pest service unless the tenant is unavailable to let the exterminator in.

Thanks for reaching out, @Serge Brice! I will certainly be in touch.

Thanks for the clarification, @Andrew Postell! I was living in one of the three units up until September 2015, so this will be the first tax year that it's been fully rented. In addition, the first few years I made some significant one-time improvements to the property. I now have an average cash flow of $95.00/mo. per unit. Based on your information, I'll definitely be able to use some of the income toward my DTI.

That's very helpful, @Chris Mason. Most of the projects that I've done since purchasing the property are in that category (roof replacement, electrical service upgrades, etc.). Thanks!

My wife and I have started looking for a new primary residence. I hold the mortgage for our three-unit property; my wife holds the mortgage for our current home. When speaking with a lender, he indicated that if I take a loss on the rental, the income would not count, which would obviously increase my DTI dramatically. Any suggestions on how to maximize the write-offs on the rental, while still having the income count?

Shortly after purchasing my three-unit, we discovered we had a freeloading tenant in the form of a foot-long rat. After the initial treatment, the exterminator advised having bi-monthly treatments to address both the bugs and the rodent issues that come along with the building being located between a corn field and a creek. I pay for the cost to have the units treated, but my leases state the tenant is responsible for a third of the cost of the treatment if the exterminator cannot enter the premises because they're not home.

Hi Christopher,

My first job post-undergrad was as a caseworker for one of the state's welfare offices. I actually purchased my first property while working there, and the skills I learned from interviewing clients and validating information proved extremely beneficial when evaluating tenants. One of the strategies I've developed is to create a standardized narrative that I've woven into my presentation while showing my apartment units. I don't ask any yes or no questions while talking to prospective tenants. Everything is left open-ended, and I listen a lot more than I talk. It's amazing what kind of information someone will tell you. Greg and Deanna mentioned some good indicators above. If you hear a lot of complaining about a previous landlord, that should prompt further investigation. If there is an immediate excuse for any deficiency in their application, such as a brief pay history, that should prompt further investigation. 

Be just as wary about tenants that show passive-aggressive behavior. While that's slightly different from "knowing the system", the outcome can be just as miserable. The biggest mistake I've made so far is renting to a passive-aggressive tenant. How do you pick them out? Listen to how the prospective tenant talks about your place to whomever they've brought along. If you notice someone is overly critical about your unit, that should be a red flag. If someone requests a lot of accommodations or wants to change the lease at the last minute, those should be red flags as well. I had a tenant who made small remarks about the unit, such as a few paint specks on the floor from the fresh coat we had applied. No big deal, right? When I reviewed the lease with the tenant, she wanted several changes made to it. Afterwards, she started asking to store things in the foyer of the building prior to move-in.

Taken together as a whole, you'll start to recognize when someone's angling to take advantage of you. There are always really good actors out there, but doing a thorough screening, in addition to active listening throughout the process, will save you from a large majority of unsavory tenants.

Hope that helps!

Hi everyone, glad to have found BiggerPockets. I've only been on here a few weeks and have already expanded my knowledge exponentially. I just turned 30 a few months ago, and currently work as a grant administrator for the Pennsylvania Department of Health. I purchased my first home (a three-unit victorian)  at 25, while pursuing my MPA. My wife and I moved out of the first floor a little over a year ago and into a newly constructed home directly across the street, possibly setting the world record for shortest move! We were able to have our new tenants move in the day after we closed on the new house, and it's been fully rented since. We're currently looking for a bigger permanent home for our growing family, but also want to grow our portfolio. In addition to the obvious interest in real estate investing, I'd like to use my rental units to teach my daughters about business and managing money. I look forward to sharing ideas and learning from everyone!