All Forum Posts by: Phil Goodwin

I have never heard of a rule that the landlord has to shovel based on a certain number of units.  The only risk you run by hiring a tenant is that if someone slips you are getting sued.  You would probably get sued regardless if you hired a licensed snow removal company, but at least they could take some of the burden.

I don't overpay for properties.  Cap rates are in favor of sellers right now due to lack of inventory on the market.  Paying too much for the property forces you to charge high rent to cover your costs.  In the event the market turns, you want to have wiggle room to decrease the rent to keep vacancy low.

If each tenant has a separate entrance, sure why not.  If they share an entrance ask one of them to shovel the snow and take a few bucks off the rent.  It snowed in Philly yesterday, took my tenant about 20 minutes to shovel.  I gave her $25 off the rent.  She was thrilled. Saves me the time to have to do it.

You can try limited guarantees based on percentage of ownership, sometimes you can negotiate with the bank.  

That is how I got started. Most banks will give you a heloc up to 80% LTV, a few will go to 89.9%. If you plan to sell in a year, make it a year and a day (long term capital gains). And be sure to investigate 1031 exchanges if you plan to sell and reinvest.

I have a  building with several garages on the first floor with an apartment upstairs.  Property is located in Philly suburbs.  The garage is old with a sliding barn door that does not seal the inside from the cold weather.  The ceiling in one of the garages is drywall and it is growing mold .  The apartment has a hot water baseboard heater above it but there are no signs of water stains or drips.  The lady upstairs says the heat works fine.  The pipe for the baseboard heat is directly above the area with the mold.  My plumber checked the connections for the radiator in the apartment but he did not think the valves at the radiators were leaking, and the carpet is not wet either.  The guy that rents the garage does not live in the apartment upstairs, he texted me today and was really upset that mold was on his belongings (wood chairs, tools, bedroom furniture, etc).   

I noticed the mold about 2 months ago and sprayed Concrobium on the drywall ceiling, it seemed to kill the mold.  And I put a dehumidifier in the garage to help get rid of any moisture.  Although since the door does not seal the garage I am not sure the dehumidifier did any good.

I have called a local mold remediation company and they are coming out tomorrow to inspect.  I am hoping they can identify the issue.  Maybe the pipe is getting condensation on it since the garage is cold?

The garage tenant is really upset and wants me to pay to clean or replace any damaged belongings.  Am I responsible?

Jake:  Thanks for the insight.  With a preferred return, is that essentially a guarantee of 10-12% before you take any distributions yourself?  Are you taking any type of management fee or general partner fee off the top?  

I own 18 residential units and I am looking to raise some capital to buy more residential rental properties. Ideally, I would like to buy about $2,000,000 worth of real estate, which in the Philadelphia suburbs can get you anywhere from 15-25 units. At 25% LTV, I would need to come up with approximately $500,000. For this example, I am omitting closing costs. I am comfortable injecting $100,000 of the $500,000. I would need to raise the remaining $400,000. What percentage ROI would my investor expect? I was thinking 10% return on his investment seemed like a decent figure. If the property can generate a 10% return on his $400,000, or $40,000, is it reasonable to propose a 50/50 split on the distributions? I might be aiming high that a 20 unit building will throw off $80,000 after expenses and debt service, but for the sake of argument let's assume it does.