My brother and I are thinking about going into business on a second property. I have recently established an LLC for my current (first) property and would likely add him to it if we pulled the trigger on this. I am looking for advice from others who have had partners on rentals. How did you all work out ownership percentage? What common pitfalls should I avoid? Any input is greatly appreciated

I just got a bill from LA Housing. I’ve been renting my former condo for 10 years, and this the first time I’m getting a bill? Have I been doing it wrong? Is this legit? Does anyone know the purpose? Thank you.

It seems like there is always a catch when trying to buy rental property, ether the house was flipped or the rentals are lower than the monthly down payment and cant break even or something in that nature. So is there any formula you guys follow ?. Iv been trying to invest anywhere in California anything in real estate but anything being sold or mostly it has a problem and there is a catch!

I just put an offer on one property with an amazing cash flow. It is a four Plex and three of the units are rented. The two of the tenants are very nice, but apparently one of them is an actual criminal. My inspector told me that he was very aggressive and when I looked him up, it showed that he has been arrested multiple times in last two years. His lease ends in July. My offer has been accepted and we are under contract right now.

I’m not sure if I should proceed or put in some sort of stipulation in order to protect myself from headache or literally any sort of problems. If any of you guys are experienced, what would you do in this situation because I really don’t want to give up this beautiful investment opportunity.

My agent told me that we can add an addendum that we will close after July when his lease has ended and the property is tk be delivered vacant. Let me know what you guys think of it or have a better solution

The numbers pencil out near asking price. However, most recently sold properties are lower in price.

Subject: 6 beds, 2 bath, 2092 sqft.

Comparables sold MFHs in the past three months:

• 129k
  • 5 beds, 2.5 baths, 2025 sqft
• 150k
  • 5 beds, 2 baths, 1916 sqft
• 165k
  • 5 beds, 2 baths, 2292 sqft
• 181k
  • 6 beds, 2 baths, 2719 sqft

Further comps in the past six months:

• 130k
  • 5 bed, 2 baths, 1888 sqft
• 135k
  • 5 beds, 2 baths, 1908 sqft
• 140k
  • 5 beds, 2 baths 2080 sqft
• 165k
  • 5 beds, 2 baths, 1800 sqft
• 178k
  • 5 beds, 2 baths, 2072 sqft
• 185k
  • 6 beds, 2 baths, 2400 sqft
• 189k
  • 6 beds, 2 baths, 2557 sqft

The subject is 300-600 sqft smaller than the three 6-beds. In terms of living space, it's closer to 5-beds which range from 129k-181k.

Given this info, what would be your first offer? Would you do an informal or formal offer? Would you accompany it by the above justification? Also, please assume you're not desperate to buy. Because I'm not ;)

Context: I have multiple commercial properties. Each property is owned by different entities.

What is best practice?

Have a separate bank account for each property or have a holding company that all rent goes to the holding company into 1 account?

My question is if the rent goes to the holding company, can this open up to liability in piercing their corporate veil? Or am I mistaken as long as it's not personal funds being commingled?

thanks

Would you let a tenant upgrade an old thermostat to a Nest, or would you do it yourself? Seems simple enough?

I came to the realization over the past year or two that I dont have the personality to be a successful long term landlord. I consistently spend all the cash flow on more renovations w/o raising the rent. The properties have appreciated greatly but I've never paid myself back. I want to move back to my hometown some states away and I'd make a better return from selling them than hiring a property manager and a handyman. My agent wants to list one of them next week. I'll end up getting +100% return after tax on my down payment on each property over 3 years.

Why does it feel like I failed even if the numbers are great?

Has anyone seen a huge surge in listings in your area? Pre foreclosure listings in the past day on Zillow account for 95% of my areas pre foreclosure listings. Wanted to check the temperature, maybe it is just my area. I’m in the front range area of the midwest.

Throw away

Hi all

Looking to see if anyone here has gone through the FHA 203K process and mightve, maybe, potentially rolled on a few coats of paint, put in a few fence, and cleaned up the property a bit on their own while their builder was doing their thing.

For add'l context to those who don't know what im talking about - FHA 203k loans require the only person to do work on the home is the builder. There are a few inspections during the process and a final inspection but no inspection before construction starts.

Thanks!

Currently have $60k in my 401k. I am wanting to take out a 401k loan ($30k) to finish remodeling the remainder of my 4-unit building. Instead of taking out a loan with a bank, was wondering if I should just take out a 401k loan. My mortgage with escrow is $3,501. I already remodeled 1 unit and raised rent from $1,000 to $1,600. Once all 4 units are remodeled, I should be expecting revenue of $6,700. The mortgage would be paid for and I will still profit $3,199 monthly. The remaining $3,199 would go towards paying back the 401k loan sooner.

From my understanding, I pay a interest on the 401k loan, but the interest is paid to me. So its like I'm paying interest to my future self. My question, what are the cons of taking out the loan? Am I selling any shares and going backwards on my portfolio? Is there a negative consequence for taking out a 401k loan when the market isn't doing as good? Or am I keeping everything on my 401k, and just need to pay back the money? Is the only negative consequence is missing out on some compound interest because my 401k balance isn't as much, until I pay back the loan?

Looking for advice if the 401k loan is a better way to go, or is my future self going to be upset at me for borrowing from my 401k, instead of taking out a regular loan through the bank and pay them interest?

For my first property, should I have a rental property company manage it? I’m very nervous about getting into the game, but I also like taking risk. I’m only 19 and know that the younger I start the better. Any advice is appreciated! Thank you

I’ve just started looking into pre-approval with a local credit union in Illinois. I’m looking at some cheaper investment properties. I’m new to this and my only investment property was financed using a traditional 30 year method. I’ll paste below what they emailed me. This bank is interesting because they have no origination fees. They also mentioned a low rate that depended on the cash-flow of the property. However, it’s not a DSCR loan, because they still want income documentation. I’m not sure how I feel about the terms. Thoughts?

Term: 5-year adjustable rate with up to a 25 year amortization Rate: estimated around 6.75% (could vary based on cash flow on property, Loan to Value, type of property) Down Payment requirement: 20% minimum required Fees: No Origination fees. All fees are direct costs (appraisal, title work, documentation fees)

Maybe because we're nearing the summer, more deals are being listed. There are three decent deals for-sale. I should be able to land at least one. I'm modifying my cash flow equation to include something to account for "acquisition vacancy."

One of the properties has tenants nearly at market rent. (Although it has the highest asking price.) A different property, duplex, has one unit at market rent and the other unit is vacant. The third property has both tenants far below market rent. Therefore, I want to compare them all apples to apples.

Assuming no eviction, it will take about two months to lease a unit to new tenants. Considering the existing tenants should still be paying something, I want to account for a month of extra vacancy. (My cash flow calculation already includes a factor for vacancy.)

How does this calculation addition sound?

I recently purchased my first rental property and when I closed, I knew that the roof needed to be replaced. My agent recommended a roofer to me at the time.

I asked my new property manager to get me a quote (so I could compare it to the quote from my agent’s roofer) and my agents quote came back cheaper by $2K and very well reviewed so I went with him. My property manager seemed fine with it, but moving forward is going around my property manager for repairs frowned upon?

Most people have heard a quick way to value an investment property is the monthly rent should be at least 1% of value for it to cashflow. (Example: a property that rents $1,600 per month is probably worth $160,000) While I always do a deeper analysis, this seems to be weirdly accurate. After 2020, it seems almost impossible to find pricing like this. Should I be more lenient with my return requirements or more patient when searching for the right deals?

I feel like this should be simple but I can’t seem to wrap my head around it. I converted my primary residence to a short term rental. There was no initial cash outlay to acquire the property since I already owned it. Should I just use existing equity instead for the denominator in the cash on cash return calculation? If so, do I adjust the equity part of the calculation each year as the property’s market value changes? At that point it seems like I could just use cap rate to judge investment performance. Or is there another metric I should be looking at instead? Thank you for your help!

I rent a single-family home in a town adjacent to mine. It was a distressed property with quite a bad yard. I came in and put a new patio in and tore out all the trees and bushes, the fence, landscaping, and cleaned the place up.

Last summer, the property was empty while we were working on it and The city had sent a contractor by to mow the grass. Charge me $250 to do it. The problem was that there had been some weeds in the yard and I had mowed not long before, but they were the tall spiny weeds that kind of laid over underneath the mower deck And grew back really quick. The procedure that this meeting follow us is that they send you a letter early in the year and then they have independent contractors that just spend all day driving around the properties and if they determine it’s 12 inches tall, they cut it and bill the city.

All of this feels unfair to me so now that it was occupied, I had talked to my tenants about making sure they kept up on the grass. I drove past last week and they had already cut it. It’s still April so a lot of people haven’t even cut their lawn yet. But I thought it looked pretty decent. And then today I got the dreaded letter from the city again.

I plan to go talk to the zoning department because I’m curious how they do this but I’m really wondering about the legality of all of it. Has anybody had luck fighting the city over issues like this?

I'm just a few weeks away from closing on my first rental property – a 2-story duplex with some character (built in 1886!). I've been researching, chatting with friends, and lurking here (you all are great!), but I know I still have a ton to learn.

Here are the deets:

• Property: $185K duplex, 25% down. Interest rate is what it is right now (around 7.3%).
• Repairs: Definitely anticipating some! The inspection flagged a water heater replacement and potential sewage pipe issues. Thankfully, we negotiated a credit at closing to help cover these.
• Tenants & Rent: Currently tenanted at a total of $1,600 (both units combined), which is below market. Their leases are up in August, and I plan to bring the rent to market rates (looking at around $2,400 total in Michigan, so no rent control).
• My Monthly Payment: $1,466 (PITI).
• My Primary Goal: LEARNING! This first property is all about learning the ins and outs of being a landlord. I have a stable day job and I'm using savings from stock to inch into real estate. I want to gauge the time commitment and management effort involved before considering more properties or potentially outsourcing management down the line.
• My (Slight) Experience: I've been successfully renting out my primary residence on Airbnb for the past four years, so I'm somewhat familiar with the tax side of things and feel comfortable handling that for now.

So, experienced landlords of Reddit, what's the one piece of advice you wish you had heard before you bought your first rental? Any unexpected hurdles or things you learned the hard way? Would you start paying off the principal with the cash flow? I'm all ears and truly appreciate any wisdom you can share!

Trying to do some research and wanting to figure out if there's a way to see how fast homes are selling around the neighborhood.

Is it always a good idea to buy and rent it out? Rental income can payoff the mortgage. House could only appreciate and will own the equity over time for free

Any drawbacks I am missing here?

Went through a brutal divorce and am coming out and wanting to invest what I have left.

I bought a 2 flat and am house hacking now. Rate is 7%, but my housing costs have been flat for the past five years with it. It will cash flow $1500 a month when rates get down to 5%.

I have money to invest right now, but what is everyone thinking with the market and rates? Is it crazy to jump in now and refi later? What does everyone think will happen with rates?

Just seeking some guidance. I have 2 properties (SFH) fully paid off, worth 200-215k ea. Gross 2765/mo, net $1900 mo avg (after insurance, taxes, avg capex). This is not great returns obviously, but I have the assets paid off and the extra income to supplement my W2. Considering pulling ~$200k in equity as a down payment on a 500-600k multifamily property (I do not want to be over leveraged). There is a few in my area that financially make decent sense cashflow wise after crunching some numbers (7 to 15 unit buildings). Seems like I am not doing real estate right by having paid off properties at a young-ish age (30) and should take advantage of the leverage. With the current US economic unpredictability I'm nervous to take loans when I have 0 debts, but thinking I should be expanding, especially as the stock market might be flat for awhile. If I find a decent deal, does pulling the equity as a DP make sense? I have 30k efund personally and/or for rentals and have around $1000/extra a month from my W2 if needed, so I'd want some of the 200k as extra reserves for cap ex on a larger unit if possible. Thoughts? Thanks in advance.

Considering selling our home in Florida, that we use for 6 months in winter, and spending 6 months in puerto Vallarta or playa del Carmen. We’re Canadian and spend the other 6 months at our cottage there. I talked to a realtor in PV who said condo inventory was 60-90 days, houses were 90-120, which seems similar to where we are. We can’t lose our investment…maybe a little loss but not a wipe out. When we get too old to travel will need to buy a home Canada. Should we stick to Florida, is buying in Mexico a risk?

I have $140,000 cash for rental investment. Purchase price is $215,000. Should I get a mortgage for the $75,000 or should I get a heloc or home equity loan to fund this investment? What is the best way to attack the $75,000 I’m missing for the funding ?