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Post by Deleted on Oct 17, 2013 7:54:11 GMT -5
We closed on our new house yesterday and now I am super stressed. We now have three houses and the lovely mortgage payments to go with all of them. A little over 5k of mortgage payments a month are now due (at least we get rent that mostly covers one of them....)
i need to push hubby to get the house we are living in finished off and on the market!!!
Ok, I just needed to vent and get that out. ARGH!!!!!!!!!!!!!!!
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Post by Deleted on Oct 17, 2013 9:52:37 GMT -5
Lol. I told my DH that he wasn't allowed to golf on the weekends until this house is fixed up and ready to market. That should kick his rear end in gear....
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Post by Deleted on Oct 17, 2013 9:54:31 GMT -5
It'll work out fine! You are in good shape money wise. Relax and enjoy being a ......minimogul.... Congrats on the part-time job! I remember doing a little gulp when I decided to take on my mom's condo and that had us owing over $1.2M. I just kept repeating phil5185 's "focusing on building wealth mantra!"
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The Captain
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Post by The Captain on Oct 17, 2013 9:58:49 GMT -5
A friend knows we've recently gotten into the rental business. She has one rental.
Her words - "Welcome to the most profitable headache imaginable"
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Post by Deleted on Oct 17, 2013 11:07:14 GMT -5
A friend knows we've recently gotten into the rental business. She has one rental. Her words - "Welcome to the most profitable headache imaginable" I lose money on my rental. We will be getting rid of the other 2 houses ASAP. I HATE being a landlord.
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The Captain
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Post by The Captain on Oct 17, 2013 11:45:59 GMT -5
I am sorry to hear that! Do you mind helping a newbie out and giving me some examples (you can scrub them if you'd like)? We closed on one property at the beginning of the month and will close on the second at the end of the month. One is a three flat, the other is a two flat. Both are structured to be cash flow positive as long as there is only one unoccupied unit in each. All units are currently rented out. My business plan is to build 6 months operating expenses/repair reserves for each unit before acquiring more. The units in the two flat are in fantastic shape (for a rental) and are at least 10-15% per month under market so I'm very comfortable I could lease quickly if someone else moves out. The units in the three flat are so-so. One was recently somewhat refreshed and just got a new tennant in. The other two units are in serious need of a refresh, but have long term tennants who have no desire to move as long as they are taken care of. Given the shape the other two units are in they are probably under market by about 25% but would need about $3-5K in refresh costs each to get top market rates. The three flat I could actually cover operating costs by about 80% with only one unit rented out so three is a lot of wiggle room here. I know these numbers don't sound realistic, but there are other dynamics involved in this particular market that is making it very attractive for rentals right now.
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Post by Deleted on Oct 17, 2013 12:21:51 GMT -5
My problem is that the condo is in a very poorly managed and small building. And it is not local. Add that to the fact that it is in a rent controlled market, and its just not something I'm going to make money on anytime in the near future.
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The Captain
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Post by The Captain on Oct 17, 2013 12:30:22 GMT -5
My problem is that the condo is in a very poorly managed and small building. And it is not local. Add that to the fact that it is in a rent controlled market, and its just not something I'm going to make money on anytime in the near future. Got it, thanks for the information. I just confirms my decision not to invest in anything with an association fee or HOA restrictions. Not enough control for me. Good luck with getting rid of it!
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Post by Deleted on Oct 17, 2013 18:38:25 GMT -5
The Captain, I am in the process of saying "Buh-bye" to my PITA tenant in AZ. While I am happy to be rid of her (hint when you receive nearly 60 e-mails in 60 days you have a high maintenance tenant ) I do have some concern about how fast we will be able to rent out the house. When we moved to Bonn 4 years ago it took about 4 months. Make sure you understand your market and get your leases to expire during prime renting season! In AZ, that would either be January 1 (snowbirds wanting to make a permanent move) or June 1 (when schools let out). Fingers crossed I'm timing it correctly this time! 5 rentals at the same time; whoo-hoo you are brave! BTW Did you get a home inspection when you bought the units? One helpful hint I would suggest is creating a capital improvement list (e.g. heaters, A/C, water heaters, exterior painting, roof, windows et cetera), with columns for estimated life spans and projected replacement dates. You're going to want start a sinking fund for the capital improvements from your cash-flow.
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The Captain
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Post by The Captain on Oct 17, 2013 19:06:55 GMT -5
@bonnap,
Good luck with the AZ house. Our leases are M2M requesting 30 days notice. If someone wants to move out I'd prefer to give them the flexibility as long as they give me notice. It also makes it much easier for me to get someone out if they become a problem. I'm not locked in for a whole year. It's not uncommon in this area.
I live in a collar county of Cook/Chicago IL and there are a lot of folks who look for housing in this area as it it more affordable then the rest of the HCOLA area.
Both properties are within walking distance of schools and are very attractive for families with young children. The one unit in the 3 flat that was recently rented went very quickly (less than a week - and that was before refresh) precisely because it was so close to the school. I lucked out on the locations to be honest but will keep it in mind when looking at the next ones.
No inspection, on our last two primary purchases the inspector missed much more than he caught. My husband (who is very handy), and a contractor/friend we know well did the inspection. The houses are also subject to City code inspection which I'm told is as stringent as the local section 8 inspection process (which I've witnessed!). They are both current and up to date on their rental licenses. In my state you have no recourse against a bad inspection.
The capital improvement plans are something I need to get started on. The 2-flat is really in prime shape, but we need to start building reserves. The 3-flat just got a new roof (I checked permits under FOIA to confirm) new water heaters, and a new furnace for the carriage house. The main house has a older furnace that will need to be replaced in a few years. The windows will need replacement at some point and I have no idea how to price that. Good suggestions! If you have any specific suggestions in this area I'd appreciate them!
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Post by Deleted on Oct 17, 2013 19:31:12 GMT -5
The Captain, I've only been through the airport in Chicago and have never visited. Want to though. I've heard the architecture is wonderful! Therefore no specific suggestions for your area, other than if families are your demographic, do talk with your tenants as the school year ends. Otherwise people always want to move in November which is one of the hardest times to rent out a unit. Because I'm out of the area I need leases for planning purposes. Since my units are on the larger size (1900+) families are an important demographic for me because I don't want multiple roommates. Good luck with your rentals!
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Nazgul Girl
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Post by Nazgul Girl on Oct 17, 2013 22:53:28 GMT -5
A friend knows we've recently gotten into the rental business. She has one rental. Her words - "Welcome to the most profitable headache imaginable" That's the best line I've ever read about being a landlord !
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Nazgul Girl
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Post by Nazgul Girl on Oct 17, 2013 22:58:21 GMT -5
Congrats Mr. & Mrs. MoneyUP's. It sounds like you've got a great plan going. I hope everything goes smoothly for you.
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