All Forum Posts by: Dorothy Butala

Can you further explain what you mean by "a real estate agent who does more real estate investing with a license"?

Multiple meters on the outside of the house, multiple mailboxes, numbers on doors...just a few off the top of my head...

When you say lead, can you be more specific about the lead you are talking about? Paint? Pipes?

What exact expenses are you looking for?  Utilities are generally public and you can call them to get averages, taxes are public as well and can be pulled either from a assessor website or at their office, insurance companies can give you cash value and replacement value quotes by giving them an address, general rule for running calculations for vacancy is 5-10% of gross income, I have seen maintenance expenses all over the map (anywhere from $300-750 or a % of the rent - those vary depending on the number of doors in the deal as well as how much deferred maintenance has to be dealt with or how much rehab you are going to do to negate the deferred maintenance), contracted services, call a few landscapers and get quotes and use those for your analysis.  If there is anything I missed, please feel free to respond and I'll assist if I can....

@Steve Babiak Thanks for the clarification, good information to know.  I guess my understanding was a bit off with regard to the plain language information.  However, I know that the lease we now have covers updated requirements like carbon monoxide detectors, which is what I meant with being in line with the PA laws.  Thanks for the learning opportunity!

Think of the origination fee as all the front end work that goes to putting the deal together, marketing, advertising, underwriting deals, overhead for personnel and office and the brain trust in general that is bringing you a deal that you otherwise wouldn't find yourself.  The management fee is for them to manage the property once it is acquired, and profit sharing on properties when a partnership puts together a deal is pretty standard.  There are a couple schools of thought on the origination fee, some do it some don't.  In the end if you are getting the returns you want that you wouldn't get elsewhere, what does it matter if they get the origination fee?  

Hi @Blake Milliken, to answer you question, I have some questions.  What are your goals?  Cash flow?  Appreciation?  Forced appreciation/re-positioning?  Equity over time?  If you purchased land, what would be your end game with the land?  

Congrats!  I am in almost the same set up as you, a flat 2/1's, and a carriage house that I reside in.  You could amp up your house if you have three bedrooms.  I have a permanent roommate in one bedroom, and then I AirBnB the other room.  Just got the permanent roommate this summer, don't know why I waited so long.  AirBnb has been going strong for 3 years.  You are doing it the right way, keep it up!

I would recommend joining a landlord association in your area, but before you do, ask about the lease they have on hand.  If you don't have one, you can join one that is located in PA and has all the PA forms.  The association I belong to actually had the state approve our form for use, so everything in it is specifically written to be in line with the laws in our state.  We have several members who are not in northwest PA, but join to get access to all of our forms and newsletters.  So if you find that you are having a hard time finding documents, the relatively small membership fee is well worth having access to a state specific lease.  

I use an early termination clause that allows early termination of a lease should the tenant pay a fee equal to two months of rent. Thirty days noticed needs to be giving and the termination fee must be submitted at the same time as the 30 day notice in order for the termination to go into effect. I only had it happen once where one tenant wanted to leave, and the other two wanted to stay. They were students, but I had them sign the lease jointly and severally (some landlords have students sign individual leases). I have students and roommates sign an agreement that if there are circumstances where one wants to leave, the other(s) will be responsible for the full amount of rent, and the student/roommate who is leaving will have to pay a fee equal to their share of the rent (equally divided rent by the number of occupants). In most instances when the termination fee is applied, it is not in the case of students/roommates, but rather market rate residents, and they would be required to pay the full termination fee if all residents wanted to move out. The reason I have the departing roommate pay the fee even though the other residents are staying is because I will draft up a new lease that does not have the departing roommate's name or info on it, that way if the roommates who are staying stop paying and have to be evicted, the departing tenant has no liability on the lease and will not be connected with an eviction. The fee they pay covers the administrative costs of updating leases and tenant ledgers as well as re-keying the property, to ensure the departed roommate does not have access to the unit once the termination goes into effect.  The state of Pennsylvania considers a fee equal to two months of rent reasonable as a termination fee. I would recommend checking with your landlord association, or state lobby for landlords to find out what the guidance is for for the amount allowed to be charged for early termination in your state.  Hope this helps.