All Forum Posts by: Will Kenner

@Jason Maguire You can simply add wording to your lease as you mentioned. Something to the effect of "Tenant shall not schedule, permit, or authorize any modifications or repairs to the property without the prior consent of Landlord. Any and all requests by utility or governmental agencies to perform work on the property must be reported to Landlord, and Landlord must give consent prior to any modifications or repairs by such agencies."  

.......Of course, have an appropriate attorney review your lease after any changes. 

Right on. Being near schools always helps with consistent rental demand, so those figures should get even better over the next few years. 

Sounds like you might be over leveraging and wiping out all your cash reserves. Even more risky embarking on a development project. I would be hesitant to cross-collateralize while having a maxed out HELOC. Better to find a partner or two to bring cash to the deal. Or pass for the time being.

FHA on your next purchase and house-hack. You'd be able to get up to 4 units with an FHA loan so best to capitalize on that whenever possible. Otherwise you're looking at a significantly higher down-payment requirement to get into multi-family properties. Be sure to have cash reserves for when things go wrong. Having the HELOC would be a supplement to these reserves, but I would avoid using it as the source of a down-payment as the interest is variable and often much higher. Key point - don't over leverage as @Sergey A. Petrov noted.  

@Cyndie Rogers Having a qualified accountant to help guide and manage your RE transactions is crucial. Without knowing more details of your transaction and RE positions, all I can say is if you already have a capital gain for the year, there may not be much you can do to offset that gain. Ideally a proper accountant should have been in place before making any transactions, but of course hindsight is always 20/20. And when you first start out, you don't know what you don't know. I certainly made a lot of mistakes when I first started investing and ended up missing out on a lot of tax-advantaged strategies because I did not have a qualified, tax-planning accountant. There are recent posts on this issue, listing questions to ask accountants as you vet them, as well as the differences between a tax-planner and a simple tax-preparer. I would encourage you to review those for more general information. If you'd like a recommendation for the accountant I use, feel free to message me.  

What are the anticipated figures when you're done - rental rate, cash flow, COC?

@Sandra Regnell Does the lease state by when the tenants need to give you notice of renewing? If so, and they are past that window, then they have missed their opportunity to renew and will need to vacate by the end of the lease term. Or, if the lease states it reverts to a MTM term, then you will need to give them the appropriate notice of lease termination. I assume your property is in WA, so you will need to ensure you've given the tenants the required time for termination, which may mean they will have an additional 30 days after the expiration of their current lease.

Regarding listing the unit, as mentioned by @Bruce Woodruff, first impressions are everything. I generally stay away from showing a unit while the current tenants are in place as this creates a headache with coordinating showings, opens up risk for claims that tenant items are "missing", and most of all, the condition of the unit will most likely be far from where it needs to be for commanding the rent you want. 

I would wait until the tenants have vacated and get a thorough assessment of the condition of the unit. If it's in good condition and requires only minimal repair, then you'll be able to flip the unit and get it listed as soon as possible. Possibly taking listing photos the day you do the walk through, or at least after having it professionally cleaned. Your tenant screening process should take such time that it would allow for the minor repairs before the unit is shown for the first time. If it requires more renovation to command that higher rate however, then I would complete the repairs/upgrades, and get the unit looking pristine before taking the listing photos. Or at least, show general photos of the unit and state in the listing that it would be available "next month" or at what ever date you can get the unit turned by, and then prospective tenants can see the unit once it's done. 

Having the unit vacant for several weeks to a month would be a small price to pay for getting the right tenants at the highest market rate possible. Rushing the process can cost you far more in the long run. 

@Tyler J.

What @Sergey A. Petrov and @Scott E. said. For commercial you’ll need 25% down at least. Credit unions are a great resource for these loans. Having cash on hand for Op and Cap-ex is crucial.

Regarding cross-collateralization like @Erik Estrada mentioned, that’s an option to tap into equity of other properties since you can’t do cash-out refis on commercial. This is a complicated process though, and you put other properties at increased risk.

Best option is get partner money for the down payment if the property meets your criteria and would be a good addition to the portfolio.

Following.......in the process of permitting and configuring our first STR.

@Bruce Woodruff @Michael Baum @Andrew Street all great info, thanks!

@Stacy C. S. I agree with @Joseph Cornwell with his strategy. For my rentals, I require the tenants put utilities in their name and submit proof, along with payment of first month's rent and the security deposit, before giving them the keys. I have this outlined on the first page of the lease so the tenant knows exactly what items need to be done before they get the keys and can move in.