All Forum Posts by: Scott Nelson

@Mike V.c

You've learned a valuable lesson that I learned 25 years ago when I was in court with a tenant. Judges dont have to follow the law and the landlord has little rights. Next time, hire an attorney to plead your case. The judges are less likely to pull this kind of crap in front of fellow attorneys. Since then, I've not had this problem happen again.

Read this prior thread

https://www.biggerpockets.com/forums/49/topics/448386-does-dti-ratio-consider-potential-rental-income

Are you buying properties for yourself or is there more than one investor? If just you then I would NOT go the LLC route and just purchase additional insurance (business and personal umbrella). This will allow you to get better financing rather than go the commercial route. I own multiple properties in my own name and also own multiple within an LLC with my brothers.

In regards to the debt to income ratio, once you have the property rented it shouldn't be an issue as it will add to your income.

Another way to hedge against a recession is to find and accept good Section 8 tenants.  Since the government pays most of the rent we don't have to worry about the tenant losing a job.  The rent shows up on-time every month, recession or not.

@Nate Shields Thank you for the referral

Can anyone recommend a PM in the DeKalb, IL area for an apartment building that rents primarily to college students? Thank you for your input.

Can a first-time buyer that is willing to live in one of the units in a 4-unit MFR still house hack if he partnered with an LLC as part owner? If so, what type of financing would be available? Thank You

@Brian Adams Maybe my question wasn’t clear but the responses answered my question. By not including a management fee then the expenses would be less and the NOI would be higher affecting the CAP. Some sellers include it and some don’t. For me to compare properties I need to assume a management fee even if they self-manage. I have multIple SFR but this would be my first multi famIly. Sorry for the confusion.

I am looking at a 10-unit building in a less than ideal neighborhood. The actual expenses do not include a property management fee. Should I adjust the CAP to reflect that In my due dIlIgence or is it normal for these smaller buildings (whIch I assume is self-managed) to not include a management fee in the CAP rate? Thanks

@Andy Cav I am in an LLC with my 2 bother-in-laws and we do both flips and SFR. I set up the LLC myself by filing the appropriate state and federal forms. The forms are minimal but if you are unsure or not familiar with doing this, consult an attorney to set up the LLC for your group and also set up a partnership agreement. Good luck.