All Forum Posts by: Amy E.

For context purposes, I own 5 SFRs, which I bought over the past two years.  

I started with enough to "turn" a house over and get new tenants, plus 3 months of business expenses (taxes, insurance, debt payments, etc.) in cash or at least easily accessible.  As time goes on, I added 15% of the rents to the fund for maintenance expenses, which builds up quickly.   So when a house is vacant and I have to "turn" it, or when the roof gets a hole in it, I have enough cash to cover me.  

You may want to adjust upwards if it takes you more than about a month to rent the home since you are 100% vacant when you are vacant at all.  But I would do a little research and figure out what it costs to turn a property over (paint, flooring, cleaning, etc.) and go from there.

I think most folks would say that's way too conservative, but I am fairly risk adverse.  My houses are cheap and small, and the rent comparably high.  So 15% of rent is enough to cover maintenance, although I only have two years of data points.  

What is wrong with the ceiling?  I'm assuming drywall, right?  If its a small area, Lowe's sells tinted paint to cover up the stains (the leak is gone, right?).  Don't bother with the texture stuff, it does not look right.  I just called a drywall company and they retextured part of my ceiling for me.  It doesn't match exactly, but is not noticeable unless I point it out.

I ask everyone I know for referrals until I find somebody.  If you get on meetup.com, you will probably find a local real estate organization and you can get good referals from them.  

Once I pick,  I check and make sure they are a licensed contractor and are insured.  After that, the best way to build up a list of good contractors is to try them out and see.

Are you saying your go to buy the property within the 401k and just want to make up the difference?  Make sure you talk to the plan provider, because then the 401k will only own a portion of the investment and that may make taxes weird. 

Most personal loans are capped at $35. Lending Club has business loans, and so do most big banks. I ended up going with a line of credit from my local bank, via my LLC. The rate was pretty good (4.5%). Since I already owned some houses outright, I chose to do a secured LOC, but they also offered unsecured LOCs for about 1% higher interest. And, be aware, while they claim the loan is in the name of the LLC (and it is), they make you sign stuff that says you will personally guarantee the loan.

It depends on where you live and what the building codes are.  Your best bet would be to get online and see if your city permit codes are published.  Many aren't, so the next best thing is to call the permit office and ask.  Despite the stereotypes, I have found my local government offices to be very helpful if I call asking questions.  

In general, replacing items that are already installed does not require a permit.  If you unplug your fridge and plug in a new fridge, that does not typically require a permit.  Ditto with countertops.  Very few places require a permit for replacing cabinetry, but some do (at any rate, I've heard some stories about it being a gray area and people getting dinged for it).  

If you are moving the fridge electrical outlet, then that may require a permit depending on where you live.  Some communities allow owners to do all work, even if a permit is required.  Other communities mandate that only licensed contractors do work.  It just depends.

Do you have a contractor you trust?  I asked for referrals until I found some great contractors....my electrical will tell me what he can do to make it safe, what has to be done to make it legal, and what he would do to his own house (and very rarely do these three things mesh).  A 100 amp panel sounds small for a duplex, but it really depends on the load being pulled and could be just fine.  

I tend to do my own home inspections before buying a property, but I do not mess around with electricity.  It can appear to work just great and be completely unsafe.

The real question is, do you want to leave the panel the way it is and have the tenant use an A/C anyway.  If so, make SURE that the home is wired properly to be safe when they overload the circuit.

If it were me, I would accommodate it, but I live in GA and am biased when it comes to A/C.

What type of business?  Landlording?  Flipper?  Wholesaler?

I state max occupancy in my lease.  I also make the tenant identify who will be occupying the property and the lease states that only the identified folks can stay on the property (all adults get screened, even if they aren't signing the lease).  It doesn't specifically state that guests are banned, but by the way that the lease is worded, they are.

In theory, my lease covers me and I make sure the tenant knows up front that only the folks on the lease should stay in the home.

In practice, I've never had an issue and I honestly don't care about the occasional guests (I do not pay for any utilities on my houses, so there's no bottom line to protect).  But if it becomes an issue my lease covers me with respect to banning guests.  I usually give my card to the neighbors and tell them to contact me if they have any issues with the tenants.

I was advised differently. I was told then when you sue a company, you can also sue its parent company.  So if you "layer" the LLCs as mentioned above, you risk ALL the assets of the parent company if one of the child companies is sue.  And the assets of the parent company include ownership shares of the child company.

I was advised to put each house in a separate LLC. And that's it. No parent LLC.

When you embark on you real estate empire building journey, you must ask yourself if your primary goal is to fix the societal problems you mentioned above, or if it is to make money.

If your primary goal is to help others, you would be better off working with charities.  You may even get paid for your work, depending on how you go about this, but at the end of the day the goal is to help others....not make money.

If your primary goal is to make money, then your task is very simple.  Rent houses that are good, clean, and well maintained.  I don't forsee any problem accomplishing this in any market.  And you will have a good, well run business, that also helps the societal problems you mentioned earlier.  Win-win in my opinion.

I rent low income housing in a rural area, so I doubt I'd have the same issues you may have in a city, but I'm happy to answer any questions.  All of my tenants simply want good, quality housing to raise their families in and are very good, just poor, tenants.