All Forum Posts by: Stan Hill

Maryann Ullrich, Century 21 Posey Properties in Plano- 214-317-0652. She's not afraid to work and always gets me the info I need pretty quickly. Tell her Stan sent you.

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Originally posted by @Joe Kim:

Question:

#1 What to do with a "sensitive" tenant who is requesting a lot of maintenance on my property which is being managed by a property manager?

#2 How do I know if this is due to a "bad" property, poor rehabing, or if this is just part of routine maintenance?

#3 What can be done with property management and/or tenant to mitigate these repairs? If not, then what are my alternatives?

It's been 9 months since I bought my first investment property and I was reviewing the maintenance cost. I'm getting around $129.72/month. My monthly gross rent is $1195/month. So that's close to 11% maintenance expense per month.

I'm assuming that this is not terribly high in terms of total cost. However, the frequency of maintenance cost is really alarming. The tenant has asked for repairs approximately 2-3 times a month consistently for the entire 9 months!

It is currently being management by property management and I did not have any role in finding this tenant or involved in any manner regarding these repairs.

Several of the repair requests are due to electrical problems but it also ranges in problems with disposal, add freon to air-conditioning, Porch fiberglass panels blew off in high winds, etc.. So far most of these problems seem reasonable. Maybe the tenant is not "sensitive" but really on top of any repairs required? But then the frequency of requests should decrease, no?

I want to be proactive before the annual lease renewal. Do I wait and see- one more year with this tenant. What can I do to better assess the situation better?

I have 5 other properties, all of which have not had the frequency of repairs that I have faced with this property.

Hi Joe:

I have the same issue. As some already stated, things can come in waves. It's tough to say what is up with your tenant. However, the contract I use has a provision where you can say the tenant pays the first ____ dollars of each repair. I had thought about putting a small number there, like $10 or so, thinking it may help smooth things out. I haven't done it yet, but thought I'd throw it out there to see what you and others think.

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Originally posted by @Joshua Springer:

As far as i've seen rental HELOC's are rarely 80%. The places that still do these have pretty strict requirements, the one I know of offhand required property to be paid off and would only go to 60%.

Having the properties in an LLC will scare most of the big players away probably as well. You might be able to find a small CU or bank that will do what you're looking for but it's going to cost more then the things you see advertised.

I had a feeling the mid-3s would end up being too good to be true. I am just hoping to end up better off than with a hard money lender.

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Originally posted by @Will Pritchett:

Josh and Hattie probably know way more than I do but I was told no locally when asking for a heloc. I was told it was only possible to do a heloc on my residence. I will be very interested if you find someone that will offer this arrangement. Please keep us posted. SWBC in San Antonio will do a cash-out refi while you are still under 4 mtgs. This is the route I was considering to access some equity. Up to 75% of appraised value I believe. Let us know what you find. Good luck!

-Will

I don't have any mortgages. I will give it a try and let you know what happens.

Thanks to everyone else for the replies- some really good information!

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Originally posted by @Brian H.:

Accidentally posted this before in the mobile homes forum...so trying again.

Does anyone have any experience renting out houses as crash pads for flight crews? There's at least one large regional airline and a major airline with crew bases in my town and I'm wondering if it would be lucrative to buy a home with 3 or 4 bedrooms and rent the rooms out with bunks (4 to a room). Am curious what other issues I should be considering besides things like zoning, insurance, parking, additional maintenance/repair expenses, etc.?

Brian:

I have experience as a pilot and crash pad renter. I know UPS has a large base there as well. The good thing about crash pad renting is you spread out your risk. You can put anywhere from 2-4 beds in each room and rent beds to commuters. You can also rent private rooms. Wireless internet, cable TV and washer and dryer are usually expected. I stayed in a house with 12 beds in it, and typically 1-3 people would be at the house on any given night. One of the good things is you know anyone working for an airline has passed a pretty extensive background check. Some commuters prefer hotels, some prefer renting a crash pad. Oh and don't forget, you can also offer housing to flight attendants. But be advised, that can sometimes lead to unnecessary drama. An important thing will be access to the airport. If it's public transportation-friendly, that's a huge plus, as most regional pilots can't afford a crash pad car.

I would somehow make contact with someone based at SDF. Ask them if there are crash pad flyers on the wall. That will help you find out if there's a market for it. Also, you can list your crash pad at crashpads.com. There are free and paid listings. Even the paid listing is very cheap, I wanna say $20 per year or something like that. Let me know if you have any other questions.

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Greetings all:

We own 3 rental properties in the Dallas area, paid for free and clear. They are held in an LLC. Total value of all three is about $150,000. I want to tap the equity in these properties to build a rental house on a vacant lot and/or do some low end property flips.

Does anyone have any advice, or know if it is even possible, to borrow against equity in three separate properties? Income/debt ratio-wise, we should qualify for the maximum 80% LTV and can personally guarantee the loan with credit scores in the mid-700s.

Should I expect to pay a higher rate than the mid-3s I am seeing for a single property HELOC?

Any advice on lenders and what kind of rate to expect would also be appreciated.

Thanks,

Stan

1 Vote

Originally posted by @Account Closed:

When I look at the 2%-3% rule, I don't look at the total cost of the property. I look at the investment amount. I try hard to go for a 33-34 month ROI, which is based on a 25% down payment and a 3% monthly ROI. To make more sense, here is a scenario I am looking at right now:

$55,000 Purchase Price

$13,750 Down Payment (Investment)

$266 PITI based on 4.35% @ 30 years and estimate on Tax and Ins

$413 ROI based on 3% of my initial investment

$102 Safety Funds (15% of PITI+ROI)

$781 monthly rent - Break Even (ROI) will be 34 months (rounded up)

Now, these are ball park figures, but overall pretty close to actual. Since my actual investment is only $13,750, I can see how the 2% or 3% guideline is achievable. I may have completely misunderstood the concept, but when I hear investment, I only think about the money I have put in, not the total cost of the property, since I won't be paying the full price(hopefully, right)... just my 2 cents...

Jonathan:

Thank you for that. I am not a business person per se. That said, my wife and I have been having a friendly argument on how to calculate a profit margin. I suppose that's easy for a business major. However, to me it is based on money I took out of my bank account. So I don't count a $50,000 loan as a $50,000 expense. I only count the money it cost to borrow the $50,000 plus of course ongoing interest. I am guessing from your post the way I am calculating is fine. Thanks for the info.

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Originally posted by @Joe Butcher:

Im glad someone started this discussion. Was looking at possible buy and holds in my area and no way could I get that formula to work. I paid $155k for my house and I think the most I could rent it for would be $1,500, if that.

Kind of a relief!!

I hear you Joe. I live in McKinney. House is assessed at $183K, I'd probably get $1500-$1600. A house down the street has people moving in and out practically every year. Seems like a lot of trouble to go through as a landlord for that money. Or maybe I'm spoiled- out of 5 rentals owned so far, 4 have been 3+ year tenants.

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Hi David:

I don't have a repair recommendation, but I did try something myself the other day. I had a washing machine stop draining. Fortunately, it gave an error message. I googled it and found a video on how to fix the washing machine. It took me 10 minutes and I'm sure I saved around $100. I'm eh OK handyman-wise, but it really wasn't that difficult. I did the same with replacing roof shingles that would blow off from time to time. I got tired of paying guys $150 and learned I could do it myself in about 5 minutes anyway.

It may be worth googling if you haven't done so already and have the time.

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Gabe, I am pretty much a novice, and in a different market- Dallas. Are the units being just one bath a liability? Most people want and expect 2 baths with 3 bedrooms.

I'm wondering if that can make it tougher for you to fill them. Perhaps some Indy guys can address that specifically.

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All Forum Posts by: Stan Hill

Stan Hill has started 6 posts and replied 180 times.

Post: Agent and Attorney references in DFW area

Post: help: sensitive tenant with HIGH maintenance cost

Post: HELOC on multiple properties?

Post: HELOC on multiple properties?

Post: Flight crew / crashed housing

Post: HELOC on multiple properties?

Post: 2% rule

Post: 2% rule

Post: Need a dishwasher repaired in Cincinnati - any contractor recommendations??

Post: First duplex deal inside