All Forum Posts by: Sam Schlacter

Can someone recommend if they know a site that allows nationwide property look up based on a criteria? I am new to this, bought one unit almost 10 years back and made really good money on it but now want to jump on and start researching to buy multiple properties. TIA

If there is a window seal leak and water has leaked in the rental property can tenant hold landlord liable for any damage to furniture? 

I should have included more information. Please find below -

I would put 20% down cash and get loan on 80%  - 112,000

P&I expected at 4.8% loan - $587.63/mnth

Expected rent - $1250/mnth

Annual Property Tax expected - $2600/yr

Let me know if I can provide any more info.

Hi All,

   I hope someone can help with valuable advice on following - I had bought my first rental property 6 years back and has worked out well. I bought it for 58k, started renting at 850 and currently renting at 1100 - I have always kept rent about 150 less as from day 1 I have the same tenant living there and maintenance cost has been very minimal. If I were to rent a brand new property there I would expect to get about 1250 in rent.

I am looking to invest more in real estate now and getting couple of more units in the same sub-division as this that I know rents very fast. However, the market value of the town home that I bought for 58k at the time when market was low is now 140k. So I am happy that my current property has appreciated well along with the rental it brings in but I am also hesitant now to pay up that much in the same sub division where in past I bought another property for half! :-)

Could someone help how I should look at this? For a property valued at 140k if I put 20% down and expecting rent about 1250 would it still be a buy? As a passive investor I am finding very different market now - 6 years back I could walk into many units and buy but now all real estate has appreciated higher. Thanks in advance.

Disclaimer: I am a newbie.

If I punch these numbers into my calculator it shows me return on equity of about 9.7%. Not great and not bad in my opinion. I like to always pay 20% of down payment on the properties I buy or plan on buying so keep in mind that would be variances.

Purchase Price: 120k
Acquisition Cost: ~29k (20% down + closing) - assuming no other acquisition cost required
Financed Amount: ~91k
Mortgage Interest: 4%, 30 yrs
Appreciation Expectations: ~3% YoY - that's big assumption, you would know your area better.
Taxes: ~2% - another assumption
Maintenance including hoa: 4% - may be it is on lower side assuming property is newer and expected rent is from higher earners.
Monthly Rent: ~1250
Vacancy: ~7%
Property Management: ~10%
Insurance: ~0.5%

Based on my calculatios -

Your annual gross income at 93% occupancy: 13950
Operating costs -
PM - 1500
repairs: 3000 (I am using way below the 50% rule)
maintenance: 3000 (Hoa: 250*12)
insurance: 500 appx (can be lower/higher depending on your liability level)
janitorial: 150
prop taxes: 2400
Total operating expense: 10500

Net Income: 3261
Debt Service: 458
Cashflow: 2803 or 9.7%

Based on my another calculation, your total cash flow in 30 yrs would be appx 84k, inflation adjusted in future as of today's value at 52k.

With the appreciation expectation and inflation mentioned above, based on my calculation the total profit after 30 yrs in today's value would be appx 200k.

Not sure if you wanted all this from a newbie with tons of assumptions..but oh well, there you have it at least from my perspective.

I just drafted a lease and put down in my lease items which tenant will be responsible for maintaining/fixing and items that landlord will be responsible for fixing. Out of the items that tenant will be responsible, the landlord takes care of it if it is more than $50. The idea is to take care of the property (and tenant) but not be bothered to change a light bulb :-) .

Tamara R. - Thank you for the info. On the first point, the tenant is bringing money order/cashier's check for security deposit and the rent at the time of lease signing. I was wondering if I can still keep the keys with me after getting money and signing the lease until they move in as I want to touch up couple of more items for them prior to their moving date.

After my multiple posts on all your help in how-to help on screening and other related rental criteria, I have finally found the tenant who is signing the lease on Saturday! To anyone interested from my previous post, I ended up ruling out all those previous applicants. Found this couple who individually has low income but has a decent combined income, no recent issues , no evictions ever, not great credit but no past due bills or collections in last 2-3 yrs ( the wife had collection issue prior to 2-3 yrs while studying), very good rental reference, verified employment reference. They filled every detail in the application form and then some more, which gave me a good indication even before I did the screening that they were giving as much information as possible to me.

I have decided to offer the lease to them and as a newbie learning, I have even more questions.

1.) They want to move-in on March 1st. We are doing lease on 16 February. Do I have to give them keys after the lease or do I give them keys just prior to they move in? I need to still do couple of touch ups in the house.

2.) In the lease, what is the norm for the renewal notice period? On a 1 yr lease, is it common to give lease renewal 90 days before and expect their answer at least 60 days before?

3.) Move-in check list - Do I leave this check list at the property prior to their move and ask them to complete and send it back to me in 3 days upon their move? Or do I physically walk in the property with the tenant on the day of move and have them sign it?

4.) Is it good idea to take video of the property prior to the tenant's move? Or is it sufficient to take digital photos which are watermarked with the date?

5.) I have couple of lease document formats. One of that is forwarded to me by a friend which seem to be produced by Florida Realtor Association based on the heading on it. Can I use that or can only the Realtor use it?

I can not thank enough all of you for your support and advice so far. It has helped me a lot until now in getting going in this new field of investment for me. I hope to hear your opinion on these few more questions. I will post my property deal details soon as I feel I should share it with this community.

Thanks,
Sam

Newb me will be interested :-)

Thanks everyone.

I decided to rule out #2 - it was too much of headache. When I inquired for more details the guy would not come on phone and kept saying he is at work etc and would only text me at odd hours. For #1, I have decided to process the application but will decide based on the results. The reason behind this is, she was very forthcoming. She was willing to show me her passport and said the reason for her not having US driving licence is while she waits for her immigration papers she can continue to drive using Mexican licence (I checked online, it seems true). Also she is willing to follow up with her husband, provide couple of paystubs of her husband's company and also talk to his employer.

One thing I am doing differently this time is instead of going through just Smart Move service, I am getting a full background check done for about 10 bucks more where they will check rental history, employment history and credit report plus score. I thought this situation warrants it. If they come back all clean I will rent otherwise not.

I will post update here, just in case if anyone is interested to know. :-)

Thank you all again.