All Forum Posts by: Spencer Hoogveld

Hanan, you raise some great questions -

1) I don't recommend advertising a "rent relief plan" but have one available if needed. Not everyone will be directly impacted and most likely majority of tenants will continue to work. Something to watch out for is unethical tenants who are looking to get out of rent, but are still working. I'd require some type of documentation to confirm the job layoff or whatever other situation they're going through. States like Washington and California have issued a eviction moratorium, meaning that a tenant cannot be evicted during a set time period due to unpaid rent. On the bright side, the full rent amount will be due when the moratorium is lifted so they aren't getting out of rent, it's just delayed. If you have reserves built up, you should have no problem. 

2) A home is the most important thing a person can have right now. The last thing a someone wants is to lose their home so rent should be a top priority. If you screen correctly, you should have financially responsible tenants. In the event that someone has fallen on hard times, be sure and work with them through the situation. 

3) I definitely think you should keep your eyes open for deals. However, I think now is the time to park some cash in the stock market. You can get in on some great prices right now! 

I’m interested in launching a start-up business in my community. At this time, I don’t really like any of the commercial real estate that is for sale in my area so I’ve looked into leasing options. 

It appears that most landlords are moving to triple-net leases. From my research, I can’t find many advantages in favor of the tenant. Rent is subject to change if neighboring tenants move out. There are no property tax benefits for the tenant. Rent could increase if any damage occurs at the property, even if it’s not your unit. 

Are there other angles that I’m missing? 

@Bryan Mitchell

Thanks for the feedback, Bryan. The numbers seemed appealing at first, however after all of these new-found expenses it’s cutting into my cash flow. Really would like to make this work but they’ve got to understand that the rent doesn’t justify the asking price.

@Jack Orthman

Thank you for the response, Jack. This was really helpful. I will gather some more detailed numbers. Would love to run them by you if you have time!

Hello BP Community:

I have a question about a 12-plex apartment complex that I’m interested in -

The sellers are an older couple who are looking to get out of the rental business after 40 years. In total there are 12 units that are each 1 bed and 1 bath. Water, sewage, and electric are all separate. They have 6 of the units rented at only $300/each. These units are WAY under-rented! I ran a report on rentometer and the median rent for the area is around $500. The other 6 units are vacant, but could easily be rented with some cleaning and minor updates.

The sellers are asking $455,000. This number seems extremely high when the building only generates $1,800/year in current rental income. While the units are functional, they all need to be updated to be able to generate $450-$500 in rent per month. I’m estimating about $75,000 in updates to renovate all units and modernize the exterior.

My question is: What formula can I use to show the sellers what the building is worth based on their current income?

I don’t want to be disrespectful by offering a low number, but also want to be fair so the numbers work for me.

@Tarsha Stewart

I use the Cash App for a few of my tenants, but I’m switching everything to Cozy. The Cash App has a few faults that aren’t suitable for landlords:

- You can only cash out to one account. This can become an issue if you need to deposit rents to multiple accounts for different properties.

- No real way to keep income organized. You can’t really categorize your tenants for each property and it can get confusing.

- There isn’t a live customer service line. If there are any ever technical difficulties, you’re forced to work through it via email.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

I'd offer $500,500 and they'd pay $45,500 for my down payment. From there I'd add $15,000 onto my line of credit for typical repairs along with my closing cost of $10,000 +/-. This brings my loan total to around $480,000 +/-.

I’ve been in a similar situation.. I ended up taking the contractor to small claims court and the judge ruled in my favor. I still haven’t seen the money and probably never will. Like some of the investors mentioned above, these situations are an expensive lesson on how to deal with contractors.

If the amount is above $5,000, I’d definitely hire an attorney. He needs to be held responsible for the crime he’s committed along with being prevented from doing this to other investors.

Now I have all of my contractors tell me what materials they need and I’ll buy them myself so there’s no way my money can be blown. My contractors even outline the sku’s at the hardware stores along with quantities on the quote sheet so I know exactly what they need. This should eliminate the need for “up front money”. If the contractor seems pushy for up front money, he probably isn’t reliable and you should hire someone else.

Hope this helps!

Best of luck!

@Jennifer T. @Andrew B.

Appreciate the advice. I think i'll implement both. 

@George W.

I put up some signs and some cameras yesterday, so i'll see over time.