Hello all,
I am very close on closing on my first property. It is a 3 unit apartment with 2 units already being occupied. As the current tenants been there for some times, deposits as well as the rents seems to be lower than what the market suggests. The tenants are paying 150 dollars less per month then an average 2 bed 1 bath apartment rents out. What is the best way of smoothing the transition and aigning a new lease with increased deposits and rents? I do not want to be cruel and want to give heads up for a future time period.
Another item is, my logic at purchasing this property was to spend less than what I am paying for my current living expenses and it is about there. If my calculations are correct, I will be paying about the same with the current rents in place. The issue becomes if I leave, the proerty doesn’t generate positive cashflow. I am looking at a very low positive cash flow given I have 5% down on a seller’s market and still higher than usual interest rates. What are some things I can do other than increasing rent outrageously.
Last item is, I am finacing this property with 5% conventional loan. I opted out of 3.5% FHA. What are some usual steps the house hacking community takes to start building a portfolio after the first one is successful? As I mentioned, as the house will not be generating positive cashhflow when I am in it, I will be saving for downpayment on my W-2 income.
Sorry for the long post.
