Investment property owners.

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1

I am about to make my first purchase of an investment property.

Its is a 4 unit complex in North Tonawanda.

My questions for experienced owners are:

The tenants will pay me 2100 gross per month. After taxes this will be more than enough to pay the mortgage. But after explaining this to other owners that I know, they all still have negative things to say.

What are some of the hidden costs that I may not be thinking of? Plowing, lawn mowing etc.

What other advice can you give me?

How hard is it to evict somebody for something like keeping their unit extremely dirty? What about non payment of rent?

2

Make sure that you stash several thousand dollars into an account just in case.

3

^ I want to put 20% down but this will only leave we with about 7k left in the bank account. But I plan on living in one of the units so only 10% is required.

4

o boy this may be long
Expenses
Water and sewer
Insurance
lawn
plowing
unexpecteds-bees,bats,etc.
Eviction can be easy or hard it’s really upto the town/city you’re in.Lockport is cake.Can have someone out in about 20-25 days.
Biggest advice is to get a ROCK solid lease and make sure it specifies you can charge them for any legal fees you incur while dealing with them not following the lease.This is huge!!!
Another thing to remember is that if you do rent to section 8 you are 100$ assured in getting the rent but if they trash the place and leave you can’t really sue and collect as they don’t have anything.
Best thing to do is write all your ?'s down and then give me a call and
i’ll go over things with you.Remember I have 70 units and pretty much ghave seen or been through it all lol
Derek

5

Misteroman, off topic but do you think a coin laundry would do good on GI?

6

no way in hell! 0% chance of success.There is already one in the main plaza(laundry lounge) owned by an acquaintence of mine and a 2nd just wouldn’t cut it.He runs it right all new machines and decent prices.I think he told me he had between 6-700K in it just to open!
Now a tanning bed?Absolutely!!!
D
P.S. I will have coin laundry at the motel as well.One of the first thngs am doing there.
4 washer and 4 dryers.

7

LOL open the tanning bed.

I seriously had an awesome hook up on beds for you.

8

Derek can probably answer this better than I, but if you have more than 3 units in a building, do you need commercial property insurance?

What is the cost difference?

Where is this property located?

Derek sent me a copy of his tenant agreement for my units. I merged it with one I was working on, and came up with a pretty good one. I rent month to month, so that I can get someone out of there right away if it goes bad, or they don’t pay. I don’t see the need to tie up anyone in a lease.

Rents where I am are very strong. 1 craiglist ad brought me 20 inquiries in 2 days, and 50 in a week.

I had my pick of who I wanted in the units. Ended up with a school teacher, and a engineer.

Just talking to people on the phone, if I got any bad vibe at all, I would tell them the unit was rented. Remember you own the property.

If it is near oliver street, or in a trashy area of NT, I wouldn’t buy it.

People won’t pay good rents in the ghetto, and if you have a property in a run-down area, then you attract that kind of a tenant.

Again thats a huge headache!

The most important question, is does the thing cashflow?

In that area, 2 units rented out should be able to cover the entire payment, and the rest should go in your pocket.

If you are just making the payment with all 3 units rented, and you living in one, then you aren’t getting enough rent, or the area is not nice enough to demand higher rent.

What are the mechanics of the house? Furnaces? Roofs? Foundation? Gutters? Chimney? Everything…

9

This is going to turn into a good thread with lots of decent info.
I am currently saving up to hopefully find the same kind of place that I can live in while renting out the other apartments.

You just have to remember and research, why are they selling the property if it has cashflow? Only legit reasons would probably retirement, liquidating funds for a better investment or moving. Otherwise it probably doesn’t make money in its current state.

10

I own a double, live in one and rent out the other half. I would also recommend craigslist. I had a lof of interest in a couple days. I got to pick who I wanted. I also went with a Teacher, In NYS they have to pass a FBI background check, so you know they are not a criminal. I also ask for references and to do a credit check. My neighbor had a problem renting to 18 year old kids, they trashed his place. I try to look for more responsible, and a little older people. I also look to avoid pets!
I also do month to month leases. This way you give them 30 days notice and get rid of them if they are dirty or whatever.
other hidden costs will be things like having the sewer drain snaked because your tenant flushed stuff like tampons.

here is a website with some info. http://mrlandlord.com/
this is where I got my lease contract. I did change it a little bit though.

11

We also had a house on the West side that was rented section 8. We had insepectors there every year. They would complain if there was a little chip in the paint. We would also have to replace smoke detectors(battery powered) every year. and the people would steal them the next day, sometimes before the inspector would even come back to reinspect. I am glad this house was sold, and would not do that again.

12

One quick thing.

I use TransUnion Smartmove for Criminal/Credit Check.

You give the tenant the URL https://www.mysmartmove.com/

Then they give their SSN to TransUnion, who is a credit bureau. There is no worry with the landlord having their information, I just get a report with their credit score/outstanding debts/ and criminal background investigation info.

Also TransUnion bills the tenant directly, I think $30, and they pay via credit card.

13

Justin, it’s located in East NT. Close to Amherst. The tenants pay $520. The mechanics look good so far. New furnace and hot water tanks. And I go today to looks at the rest. I think this will be a good investment.