All Forum Posts by: Remone R.

Yes Richard I've been looking and reading about HELOC's, cash out and equity loans to see what the best option would be to re-invest

Wow Andrew you've me advice has my mind more clearer now! Hopefully I'm not sounding "spoiled" as I know I'm in a good position just owning property. But knowing the best route to financial freedom is is very valuable. Thanks 

yes Mike that's a good strategy to go for its all new to me and I'm just trying to find the best route and learn as much as I can. Yes Thomas the property is in the surrounding Seattle area so the market is pretty good right now. The rents were all below market $850, 950,1045,1100 all units 2 bdr 1ba w/garage and private backyard. So I've already increased 2 units to $1300 (section 8) and the other unit is on lease until Nov.30 at which I'll increase that unit also and have all units submetered.

Ken sorry for the confusion, but yes I when I realized the difference between my four unit and a 5+ unit it made me rethink my plan of getting four units as  owner occupied, wait a year and do cash out  refinancing then repeat.  I'm sure it's still a good plan but the increase in equity with commercial units just seems more promising. 

in your opinion what would be the best way to go from a 4 unit residential into the 5+ commercial arena?

So me and my fiancee' purchased a fourplex back in february for about 500,000 as owner occupied. Since purchasing we've completed a number things maintenance etc. including raising rents--Unit 1 $1300 Unit 2 $1300 Unit 3 1100...The plan is to wait another 5 to 6 months and then do a cash out refinance and take that money to purchase another property. Dilemma~ If lenders designate 1 to 4 units as residential and residential properties mainly gain value according to comps and capital improvements, should i not focus on raising rents and decreasing expenses and focus on capital improvements i.e. painting, roofing etc? My plan with this property was to raise rents to market rate and install submeters to have tenants pay for utilities all in all to increase NOI. BUT I've read that increasing NOI in a residential '1 to 4 unit' property doesn't increase equity as it does in a commercial '5 + unit' property. So I'm confused as to what i should do. Its more cost efficient and easier for me to raise rents and install submeters, but if its not going to help why bother. right?

Again my goal is to purchase another 4 unit, but preferably 5 + unit and increase NOI to build equity then refinance and repeat the process. 50 units in 5 years..im determined

I agree with Jason having to lay down the law. But one thing you have to consider is if you go in laying down evictions will that tenant/s cause even more damage on the way out. Also the costs of the eviction not too mention the time and money lost. Another option could be as you stated charge a pet deposit and pet rent. I would come in with new rules/regulations etc. setting the tone of how you want your property ran. the tenants would accept it or leave on their own and since they're MTM that Wk's in your favor. All the info you've received is great just weigh your options and wallet the right choice will come to you.

Thanks brent guess ill just stay on course and hope to get some good equity. Market is pretty good here in Seattle 

So if i decide to refinance in a year and use that equity to purchase another property would the NOI then become valuable? In other words should I work to increase the NOI like installing sub-meters OR just put money towards capital improvements i.e. painting, roof etc?

yes brent that is so upsetting to know that smh..but its good to know now.