All Forum Posts by: Account Closed

On what basis are they appealing? Did they pay any of the rent?

The "profit" is $35K in both cases. $395K - $360K = $35K and $420K - $395K = $35K. The question is how much work/time you want to put in.

@Michael Rogers

No sub-leasing allowed. Lease clearly says I have to find a replacement tenant that will qualify according to the landlord's criteria and is willing to sign a one year lease with the apartment in "as is" condition.

Regarding the phrase in your post "if they decide to file a judgement against you". On the one hand I'm not worried about this at all. I am not a US citizen, do not have a green card, was never considered a resident and only ever was in the country for a specific job with a visa related to that job. When I leave, I'll close all my bank accounts and credit cards. Europe, and a number of other attractive locations where I could get jobs, are all geographically closer to my family so I'm unlikely to return to the US in the future. 

I've explained this to them very politely and have assured them that my only aim is to assist them to find a replacement tenant before I leave. This is why they were one of the first calls I made when I heard I got the job a month ago. I want to help them but I need to know what rent they want. If I try and find a tenant, say at the current rent, and string that person along and get them to pay the application fee, only to be told that the rent is actually $100 more. I don't want to waste peoples' time.

Apologies for the rant, I'm just frustrated with them. One of the brokers in the neighborhood that I spoke to said that she would be happy to help me find a tenant but that she knows this landlord/property manager and dislikes working with them.

I'll continue to call, email and write them letters. But on 10 October 2015, I have a one way ticket.

@Steve Vaughan@Fred Heller@Account Closed

Thanks guys! This is a rent stabilized apartment in NYC so my lease is fairly standard boiler plate stuff. But you all gave me some new angles or ideas of things to try. 

So I'm a buy-and-hold investor and have some experience as a landlord. I also happen to be a renter and I'm trying to figure out some strange landlord behavior. I thought this would be a good a place as any to gain some insight.

About a month ago, I got the news that I'm being transferred from New York to a new job in Europe and I'll be relocating in October 2015. Since my current lease ends in February 2016, I immediately called my landlord to let them know and to find out what the next steps would be. The lady at the property management company was quite pleasant and let me know, that in accordance with my lease provisions, I would be responsible for finding a replacement tenant. She said she would discuss this with her manager and get back to me with the new rental amount.

I waited several days to hear back from her. Nothing. So I sent a certified letter basically repeating what I had already told her over the phone and asked to hear back. Nothing. In order to find a tenant, I need to know what the rental requirements are and the rental amount. Besides my certified letter, I've called, left messages, sent emails, etc.

What do I do here? I only have a month left in the USA. At which point I will leave on a one-way ticket to Europe. Should I just assume they are allowing me to break my lease and that they don't need me to find a tenant?

@Anthony Gayden

Personally, I would make removal of the deck a condion of the sale. They're only your best tenants if they are not doing things to actively ruin the property such as building an avenue for termites into the house. Whether it will make you, as the new owner, and those tenants the best of friends is an important consideration however. That is something you'll have to think about.

@Ben Chapman

I'll let the creative financing types on the website chip in about things like seller financing, house hacking, etc.

That being said, I believe you are correct in saying you will 20% down for conventional mortgage if its your second property.

On using your retirement funds to finance your downpayment, I would have a frank discussion with your financial advisor (and it won't hurt to get more than one opinion here) about the costs and benefits of doing so. There is a recent blog post here somewhere on BP about the downsides of using a 401K that might be useful to you.

The best savings tip I can give: You state in your post that "I am setting myself up financially to be able to afford 2 mortgages without tenants in the near future". Pay your own mortgage and then put the money you would pay for your second mortgage, in your downpayment savings account. Two benefits of doing this are (1) you save money pretty quickly and (2) you get used to "paying" that second mortgage even before you get it and get used to what that feels like and how to adjust your monthly budget and expenditure.

Good luck.

Yup, its addicting. I have two rental properties so far.

I like: when its calm and peaceful and those rent checks show up at the beginning of every month. I like researching properties and analyzing deals.

I dislike: Unexpected tenant turnover. It happens, and I've allowed for it in numbers. Doesn't mean I have to like it.

@Austin Entrop

I believe the answer to your question is yes. You'll inherit the lease as is.

There's no harm in asking them to sign your lease and they might say yes. But if you change the terms and condition in any way they don't like, why would they sign? If the lease you are offering them has the same terms and conditions you won't get less or more protection by having them sign your lease.

Assume the lease in place is the lease you're going to have to manage and if you can live with that, everything else is a bonus.

Personally, I don't like that the tenants have a three year lease in place. It would make me nervous. What if they rent they pay is under market and you're going to have to wait out those three years before you can get the rent to market rate? What if you don't like them? What if they don't like you? Or they see you as the new guy and try to see what they can get away with. I would go over there and introduce myself as soon as you're able to do so (probably after closing) and establish yourself and your relationship with them on a positive footing.

@Joshua A. Lenninger

The 50% rule is a good rule of thumb but may not fit your market. Its value is in ensuring that you consider all costs in analyzing your deal. And then determining realistically if your property will cash flow.

For me cash flow is important, I do want money in my bank account every month but I also want to be sure that this is the best option for investing my money. Could I do better in a simple savings account, or in mutual funds, a 401K or stocks and bonds?

The first thing I do is try to get as close to "1%" as I can before going into all the other calculations. I.e. I would probably pass up on the above mentioned property because $3,250 is less than 1% of $360,000. For me, anything less than 1% return on my investment (12% per year) means that if my expenses are roughly 50% of that, that at 6% per annum I have to determine if I could probably do better in mutual fund with less work and worry or if I think the property is a worthwhile use of my money as an investment.

What works for you may not work for someone else but for me, I want to know that I'm making the best use of the money I have available for investment and that I'm properly diversified between types of investments (property, mutual funds, stocks, bonds, etc.).

From what everyone says on BP, prices in CA are high and it isn't a market where the usual rules apply. Maybe if you think about it in terms of your overall investment strategy, you can decide if you want to go ahead without following all the rules.