All Forum Posts by: Raj Vajir

I have installed all new central AC units from this single vendor which I like; for 4 of my properties.  I have a bi-yearly contract with them to maintain the units and they currently have a new policy where they check for mold in the duct work by an intrusive method and they are finding slight mold growth and are recommending this device called Nasa Air Scrubber (~$1200 per unit).  Suppose to last 5 years with 2 year bulb replacement needed (~$300 each).  My properties are about $1200-$1400 avg rent.  Trying to figure out how bad small mold growth can affect tenant health and see if the cost is justifiable.  This test isn't normal for most AC companies according to them since its a bit intrusive and expensive to re-patch the cutting of the duct so most don't do it.  Want to see how legit this issue is and why its not a big concern for other vendors.  Any feedback is appreciated in advance.

Thank you

The only major thing I can add value would be if I pave the parking lot and paint the exterior of the building, but other then that, not much is needed.  The seller has absolutely no experience in landlording as she took over the business after her husband passed away in 2013 and she had a manager that ran the property into ground and showed consistent loss. She got hold of an agent to sell property and he helped her remove the manager and upgrade the property, hence most of the work is already done.  He quickly rented the units to show positive numbers to put it on the market @$300k. The local rents range from $600-$800 for this smaller units, only 2 other apartments to compare with and they are both government (low income) related.  One is newer so 1 bed goes for $900 and the older one $700.  

Hello All,

I return to get expert opinions again on a purchase I am considering of a 4plex unit (2x2 and 2x1).

Asking: $250k

Offer: $210k

Seller agreed at $220k

Current Rents: $2250/month

Proforma: $2500-$2600/month

Water is paid: monthly $179 cost

Insurance: $1000/yr 

Mortgage: $165k @ 5% 30yr term (25% down) = ~$900

Tax: $4600/yearly (Appraised at $218k)

2250(income) - $83 (ins) - $900 (P&I) - $383(tax) - $179 (water) = $705 net income/month

Very minimal rehab needed ($2000 if at that)

Based on these numbers does this seem like a sound purchase?  Let me know if I've missed something.

Thank you in advance for your input.

Raj

Thank you all for the guidance.  I really appreciate the quick responses.  This is some great advice.  I have reached out to my leasing agent to quickly get it on the market again.  I don't necessarily want to go after them since they were nice tenants, but just wanted to make sure about the deposit.  I like Deanna's idea about lease termination fee.

Thanks again everyone's input and have a wonderful day.

Would anyone be able to help on what my options are if a tenant breaks a lease.  I have 3 people on the lease and one of them just walked out (daughter's boyfriend) and now the Mom and the daughter's salaries does not cover the rent and they want to end the lease in 15 days.  What options (steps) do I have?  Can I keep the deposit money?  Where do I file to reflect the broken lease.  Is the legal process pretty lengthy/expensive?  I am willing to just keep the deposit and get new renters in there.

Thank you in advance for your response.

Raj

I actually just acquired a property from Networth in Austin where the values are already going out of range for cashflow numbers to make sense. I worked with Casey and he was so helpful. From helping me find rehabbers/foundation people to actually marketing and getting the unit rented for top dollars. He even went out of the way to talk to the rehabber, who he had not worked with in the past to urge him to complete the unit faster on my behalf. And I saw the change first hand. He respectfully asked me permissions to take any steps. He even showed the property to the tenant and ran their background checks for me. Totally went out of his way to ensure that I started to cashflow on the property. I will most likely buy from him again. Although I'm torn between SFR and apartment investing now. We'll see.

Lenders will only only lend under your name and not the LLC. The LLC name is only added to the deed using a title company for recording purpose. Later if you need to refi the property, you have to replace the title back into your name for the lender to process loan. This is what I have been told here in Texas. Your state may have different laws pertaining to this. If you reach out to the lender you're approved with, I'm sure they would be able to confirm and guide you further. I would suggest to get it under your name since the rate will be alot cheaper as you will be purchasing as your primary residence. An LLC does not convey that to the lender. Also ask the insurance company if they will insure you if the property is in the LLC name. Some have issues with this apparently. I work with State Farm and they seem to be ok. But you probably want to reconsider forming an LLC in the first place as its not necessary if you'll be occupying the property. Change it when you're ready to rent it out.

You might even want to take it a step further and see what the seller is wanting to do with the funds of the sale?  Maybe they just have a $20K-$30k of debt they want to payoff, either taxes or some debt on the house.  Maybe you can approach them an see if they would carry the rest if you pay them the amount they need fast.  Especially if the seller is a family friend, they may be open to the idea.  

You may actually be able to rent out a room or two which would help you pay the mortgage and may even end up living there for free.  Key is to obtain primary residence loan though and lock it in for 30 years.  Rates are only going up from this point forward.  

@Joe Villeneuve

Hello Mr. Villeneuve,

What methods would you suggest for getting a loan on a house purchased with cash and not having to wait the 6 month waiting period.  I was told by one mortgager, I'll be inquiring smaller banks today.  Ideally i would like to get a 30 year term.

Thanks in advance for your assistance.

Raj

Joe Villeneuve

Joe Villeneuve

@Carolyn Lorence

I ran across your request in search of a tile person and I am looking for something similar and wanted to reach out to you to see if you know or have used in the Round Rock area. I recently purchased a rental property up there and needed some tile work and paining and moulding. Would appreciate any recommendations.

Thank you

Raj

Hi Chelle,

I am in Dripping Springs area and am trying to invest, but the price range is very high.  There are 6000 homes to be slated here soon.  The homes range from $400k-$1.2M.  These are brand new homes mind you.  This is an up and coming town so not many older homes available.  Schools are very HOT here.  Prices will sure go up, but investing in cash flow will be difficult.