All Forum Posts by: Wren Martin

I have a dry cleaning tenant but they process the cleaning offsite.  I wouldn't want to own a dry cleaner that did their work onsite the environmental risks are too high.  At a minimum make sure you have a Phase 1 Environmental survey completed to make sure your not buying the sellers nightmare.  Of course that only protects for contamination that has already happened, the spill that happens the month after you purchase would be your problem.  This is a risky deal, if you don't have seriously deep pockets you should pass.

Jaz,

A good roofing contractor will want to protect the property in the event of a rain.  It's possible that the contractor did apply some tarps but subject to wind they may not have protected the property underneath as well as they might have hoped.  I would contact the contractor and see if they are willing to help you mitigate the damage in your unit.  You might need to contact your local registrar of contractors and see if they can help you get this resolved if the contractor isn't willing to volunteer the repairs to your satisfaction.  Make sure and document the damage to include pictures, names of contacts, and any/all actions you take.  It's possible that you will need to proceed with the repairs on your own as you do not want to absorb the downtime in the unit waiting and hoping the contractor will make you whole.  You do have a responsibility to limit the damage to your unit as much as possible so don't expect a court to grant you lost rent if you don't do everything in your power to get the property repaired and released as quickly as possible.

To your Success!

Hau,

Sounds like you could do this deal and it probably will not hurt you, in fact it might be good for you to finally get your first deal under your belt.  Since it's close to home, an area you know well, and your planning on managing the property yourself where you will learn so many valuable lessons, a cost of -$225 per month it could be a very good starting property.

However, don't ignore the effects of -$225 per month on your Investor attitude.  If you can't realistically predict that you can raise rents over the next 2-3 years to cover all costs and show a profit then you should try and restructure the deal so that you can.  And if that isn't possible you should pass. 

I have an SF rental within 1 mile of my residence that I manage myself, it carried a -$250 cash flow for over 2 years before I was able to make some positive changes and now it's only -$100 and it still bothers me every month.  The income isn't the problem, I earn sufficient to cover the entire mortgage on any given month but losing even $100 per month on a property starts to negatively impact my mindset ... from time to time. 

Even a $50 per month positive cash flow from your investment activity will help you create and keep the right mindset which is important to help you gain momentum as an RE Investor.

To your Success!