All Forum Posts by: Pete Sailhamer

Welcome @Nicholas Rice

Thank you @Mark Swim.  I'll look him up.

Looking for an attorney in the Green Bay, WI area (Brown county) to handle an eviction.  Any recommendations?  

Thanks in advance!

I use the same as @Nathan Letourneau

I always will ask a seller if they would like to hold a 10-20% second mortgage.  Most say no, and some say yes.  Seller financing doesn't have to be 100%, despite what most people think.  If the bank finances 80%, the seller 15%, and you 5% and the numbers still work with a higher mortgage, you can buy for very little money.  We are very upfront with banks from the beginning to make sure they are okay with additional liens, and if they are not we move on to other banks because there are plenty that are.

Now, there is a difference between buying with little to no money down because you decide to vs because you have to.  Make sure you have reserves.  And don't buy at market rate (i.e. buy at a discount) so that your leverage isn't 100% of market value, but only purchase price, if that makes sense.

I would always recommend having the tenant pay for water, even with the risk that you could possibly have to cover the cost if they don't.

I am a huge fan of this. Using a HELOC from our house has been a large portion of every property that we have bought (160+ units). It has never been a problem. We've used Badger Bank, Greenwoods State Bank, 1st National Bank and Farmer's State Bank.

It also allows you to aggressively pay off the HELOC while still having access to those funds if need be. Compare that to aggressively paying down a loan, but those funds are gone until you refinance or sell.

We focus on larger apartment buildings and have no intention of going anyplace else.  It works very well, as long as you buy right of course.

We focus on screening them well and then put them on a 1 year lease.  We'll even renew their lease for another year at a time when it expires.

"...the best option in your case is to rip off the band aid and move all rents to market asap"

@Thomas S. I can't say that I necessarily agree with this.  I agree that it is important to not lose money, on the other hand, and I face this issue constantly, there is a personal aspect to real estate that you don't find on a P&L statement.  There is no easy answer, but the way we have faced this in the past is...

a) Buy properties that don't require a 65% increase in rent in order to work

b) Raise rents somewhere in the middle where it makes sense for both sides, and continue to increase rents over the years

c) When units eventually go vacant, then it is your opportunity to rent it out at full market rent.  If they've lived there for 15 years, maybe this won't happen for a while.  

Many people would definitely side with Thomas, but you'll be the one that has to live with kicking someone out of the place they've lived for 15 years so you can make an extra buck.  

Again, not an easy problem to face.