All Forum Posts by: Robert LaPrelle

I was going to suggest getting some of the purchase price financed by a bank and some by the seller, but then I took a closer look at the numbers and now I'm not as sure. Lets look at your numbers:

17,000 taxes

+7,500 insurance

+35,000 utilities

= $59,500

If you get a loan at 4.5% for 30 years (and I don't think its possible to do this well) then you have $6,080/month in mortgage payments or $73,000/year and you are up to $133,000/year.

Add on property management fees at 6% of gross rent (not sure about your area, but in mine, this would be bargain bin management) or about $10,000/year and your are up to about $143,000/year in GUARANTEED expenses. (Even if you plan to manage the property yourself, 24 units is a LOT of work and your time is worth money.)

This leaves you with only about $32,000/year for the unexpected and I think that you'll find your numbers are a LOT higher. You will have parking lot and grounds maintenance, legal fees, tenants who trash your place, etc, etc, etc. 

Bottom line, if it were me, I would look for a better deal.

Hope everything works out for you!

My advice would be to find a partner who can help with the financing. Not many lenders are going to want to lend to you if you don't have the income to justify it. (I'm assuming here that you're working part-time and attending school full-time.) If you're willing to put in the work to find a deal with good numbers, you should definitely be able to find a partner to make the financing work.

Good luck!

I would sell immediately unless you anticipate large appreciation over the next few months. If you sell that huge house and rent something smaller, you can pocket the difference and have the cash ready to go for a down payment on whatever investment property you do want. Run the numbers: How much am I paying on my mortgage? How much would it cost to rent? Is the luxury expense of owning my own large house with its own pool worth the extra money?

My whole business started with buying duplexes, living in half, and moving on in a few years, so I think that's a great way to go. Ultimately, you have to decide for yourself what kind of investing you want to do, but I think that's a nice, lower-risk way to start.

Good luck!

First of all, congratulation! It sounds like you got a great deal. I think your choice should depend primarily on two things:
1)What do the numbers look like?
You have estimated rental numbers, what would a renovation for rental cost you? What would your ROI be for that property? What can you sell it for if you flip it? How much would that renovation cost?

2)What are your investment goals?
If you are trying to build a rental portfolio, then you may be willing to accept a smaller ROI in order to add some passive income.

Whatever you decide, I STRONGLY recommend deciding on a goal for the property BEFORE beginning renovations. Renovating a property for rental is a VERY different process than renovating for sale.

Either way, good luck!

I agree with Andrew on this one. At this point, your goal should be to get them out as cleanly as possible. In my experience, it is cheaper for me in the long run to make short term concessions. I would offer to waive the penalty as long as they cooperate with getting someone new in just after they move out. That way, they still have a reason to work to keep you happy.

Its possible that I am losing a little income. My logic at the time (and I still believe this to be true) is that we get a better relationship with our tenants by not penalizing them for owning a pet and that it serves as a nice marketing draw (we offer PET FRIENDLY houses w/ a fenced in yard). We certainly get enough students from the local veterinary school in as tenants.

So sorry you have to go through this! My first few evictions were really hard on me emotionally!

I don't think it matters whether or not he's telling the truth. If he can't pay rent, he should move out REGARDLESS OF THE CIRCUMSTANCES. Because of that, I always try to believe the sob stories that my tenants tell me, because I would much rather be kind to someone who doesn't deserve it thank be cruel to someone who is going through a hard time. 

It's worth keeping in mind that if you start the eviction process, and he ends up paying, then its easy to cancel. (In Virginia, at least, if you just do nothing, then the whole thing disappears.)

I charge both, but in pretty small amounts (I believe its $50 for the deposit plus $15/pet/month), but accepting pets is one of my big selling points. Most in my market don't allow them at all or charge exorbitant fees. Also, now that I think about it, I have never had a tenants who let their pet trash the house who didn't ALSO trash the house in some other way.

I think I would prefer it if my tenants DID look me up online. I work hard to be straightforward and upfront in my approach and it would be nice if they had some confirmation that I meant exactly what I said and was going to do exactly what I said I was going to do.

First of all, I'm so sorry that you're having to go through this this! I have been where you are and it SUCKS! It does get easier every time, though. I have had a few tenants through the years who clearly never intended to pay rent once they moved in. Most, I caught before I gave them the key, one or two got through.

It always helped me to just take anything that a tenant tells me at face value. Probably, this woman is trying to scam you, but even if she's not, YOU SHOULD STILL START AN EVICTION. At the end of the day, she needs to either put money in your hand, or leave. In the meantime, though, I would much rather be kind to someone who needed my kindness than cold to someone who didn't deserve it.

I recommend calling your lawyer and paying for 15-30 minutes of his time to walk you through the process. He can give you copies of all the forms that you'll need and help you understand what to expect. If it goes to court, judges can mostly tell EXACTLY what's going on and will help you through the process.

Good luck with your current tenant, and I hope your next works out better!