All Forum Posts by: Renard Miller

Not strictly. The limits will be based on how many you are able to get financing for. Many lenders treat five as the maximum number of mortgages an individual may have. Often, married couples will take five properties in each of their names to reach that 10 number. 

But there is no strict rule and I'm sure there are lenders out there who will award six or more mortgages. There is also seller-financing and other non-traditional methods once you reach that cap, so there are always ways to do more. 

We find the most success finding residents on Facebook. 

Cozy.co is pretty great for rent collection and tenant screening. They make both things a breeze and we have started mandating that all new residents use it. 

As far as the backend of our operation (accounting, long term planning, etc.), we use Stessa (website and app). It is a free platform that puts all the numbers at your fingertips and has compatibility with Cozy and your bank accounts, which helps automate a significant portion of the management. When we have a charge on our account, we just have to tell it which property it relates to and it does the rest. Makes tax time much less painful as it will give a breakdown by property with all relevant numbers/transactions. 

@Quentin Mitchell

We tend to only raise the rent when we have signaled to them the raise was coming a year out. We put the next year’s rent in the lease they sign. Otherwise, we just leave it the same. We find that people appreciate the notice and we can hold the rent steady for residents we want to keep under all circumstances.

We have used this form in the past - https://bit.ly/2qzaHkk

Basically, the fact that you are sending them a letter at all will usually give them a wakeup call. Anyone who has not paid by the 5th gets a letter and we usually state that we will file after 10 additional days. Most of the time people communicate with us and we are somewhat flexible if the person has (i) an established history of paying and (ii) a legitimate reason (e.g., temporary work stoppage, death in the household, etc.). 

When we evict, we generally go through the entire process even if they pay. In our state, you can file the eviction and it will be valid for a period of months. That way they are still allowed to live in the property as long as they are on top of the payments going forward, but we won't have to go through the long process again to get them out if they fail to do so. 

For people who are late every month, make sure you are charging late fees and enforcing them. Ours are generally 10% of the rent and can make up for receiving the rent late. We have a few residents who routinely pay late fees and it just becomes extra money on our end. Those who are smart will avoid late fees and pay on time, but the point is that late fees can only help you. 

Congrats on the progress you are making!

I don't see anything wrong with owner financing if it is the right deal, but I would echo what others have said. Make sure the terms/numbers make sense. 12% sounds extremely high and my guess would be that since it is a duplex, you can get conventional financing from lenders that will offer more attractive terms. 

If the seller will only do seller financing because they are looking for a quick exit, it's possible you can get a discount relative to the market for meeting them on their terms. Refinancing out of that 12% should be easy if it is a good deal.

We have one property in our portfolio that is seller-financed and it was really mostly a benefit to us because it is 5+ units and thus would not have qualified for conventional financing. Our interest rate is very reasonable, so we have not refinanced and have had no real issues working with the seller. We mail him a check every month and that's about it. 

A hidden benefit is that they will sometimes remain more interested in the property because they are the lender. He is extremely accessible with regard to questions about the property and its operations. 

We have kept security deposits in instances where we have evicted the resident. We generally deduct amounts owed when they move out. 

We tend to do pictures and videos on move in and move out and ask residents to specify any pre-existing damage they would like to note in writing. 

Welcome! You have come to the right place! Every resource you could ever need--connections, education, encouragement, etc.--are all here. Congrats on taking the first steps!

Congrats on the house hack!

The general consensus that you don't need an LLC early on is because there are fewer assets to protect from a liability standpoint. However, if you would like to segregate bank accounts, an LLC can be a good way to accomplish this. The annual fees are pretty minimal (depending on the state) relative to the accounting benefits.

For reference, that's what we do with our business. Our LLC has the bank account, collects rents and pays bills. It doesn't own the underlying properties because of some of the issues that are often discussed here (difficulty getting financing with an LLC, etc.).

It is mostly a matter of preference and whether it will make things easier for you on a day to day basis to have the revenues and expenses separated from your personal finances. 

@Jonathan New that is net vacancies, expenses and taxes. It is definitely not achievable on every listing, but every now and then they pop up or we are successful with one of our strategies for finding a property not yet on the market. 

Hi, Kevin. My wife and I have four multiplexes in Hampton, VA and our returns are in that range. We've gotten lucky to get closer to $200/door on some, but I would say $150/door is a reasonable basis for offers. Your mileage may vary in Norfolk/Portsmouth, but I can't imagine it being so different as to make such an estimate off base.