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Ren.
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August 28, 2009 at 10:19 AM #16264August 28, 2009 at 1:19 PM #450150
uneven
ParticipantI don’t have a lot of experience with rentals, but here’s what I’ve learned. I have a rental house (3/2) in San Jose and a condo (2/2) in Santa Ana. The 2/2 is in a complex with about 300units. HOA’s are a pain in the ass. It’s my first experience with them and it’s been non-stop aggravation. If you can afford a multi unit that you own the whole thing…. that’s the way to go. Otherwise, Id stick to SFH’s. That said, I’m making about $400/month (not including vacancy) on it. It took me 3 months to rent it at first. The tenant is good, but still has to be called every other month to remind them to pay the rent.
The 3/2 in SJ was my house for 5 years before I moved south. It’s been rented for 2 years with a new tenant after year one. I loose about $100 a month, including paying a property manager up there. Again, tenants have issues here and there, and checks “get lost in the mail” so it’s a little bit of work, but nothing serious.
The one thing you need to think about is most non-owner occupied loans will require 25% down. I’m not a broker, so I could be wrong, but I was told that you can get hit hard or not get loans if you can’t come up with that. Also, form an LLC. It can help in many ways. It protects your personal assets from a suit related to the property and it also allows you to be the “manager” instead of the “owner” to tenants. They write checks to Acme LLC and your just following Acme’s policies. I think I’m a very reasonable landlord, but it makes a difference in dealing with tenants.
I’m not sure how useful any of that was… but best of luck.
August 28, 2009 at 1:19 PM #450341uneven
ParticipantI don’t have a lot of experience with rentals, but here’s what I’ve learned. I have a rental house (3/2) in San Jose and a condo (2/2) in Santa Ana. The 2/2 is in a complex with about 300units. HOA’s are a pain in the ass. It’s my first experience with them and it’s been non-stop aggravation. If you can afford a multi unit that you own the whole thing…. that’s the way to go. Otherwise, Id stick to SFH’s. That said, I’m making about $400/month (not including vacancy) on it. It took me 3 months to rent it at first. The tenant is good, but still has to be called every other month to remind them to pay the rent.
The 3/2 in SJ was my house for 5 years before I moved south. It’s been rented for 2 years with a new tenant after year one. I loose about $100 a month, including paying a property manager up there. Again, tenants have issues here and there, and checks “get lost in the mail” so it’s a little bit of work, but nothing serious.
The one thing you need to think about is most non-owner occupied loans will require 25% down. I’m not a broker, so I could be wrong, but I was told that you can get hit hard or not get loans if you can’t come up with that. Also, form an LLC. It can help in many ways. It protects your personal assets from a suit related to the property and it also allows you to be the “manager” instead of the “owner” to tenants. They write checks to Acme LLC and your just following Acme’s policies. I think I’m a very reasonable landlord, but it makes a difference in dealing with tenants.
I’m not sure how useful any of that was… but best of luck.
August 28, 2009 at 1:19 PM #450936uneven
ParticipantI don’t have a lot of experience with rentals, but here’s what I’ve learned. I have a rental house (3/2) in San Jose and a condo (2/2) in Santa Ana. The 2/2 is in a complex with about 300units. HOA’s are a pain in the ass. It’s my first experience with them and it’s been non-stop aggravation. If you can afford a multi unit that you own the whole thing…. that’s the way to go. Otherwise, Id stick to SFH’s. That said, I’m making about $400/month (not including vacancy) on it. It took me 3 months to rent it at first. The tenant is good, but still has to be called every other month to remind them to pay the rent.
The 3/2 in SJ was my house for 5 years before I moved south. It’s been rented for 2 years with a new tenant after year one. I loose about $100 a month, including paying a property manager up there. Again, tenants have issues here and there, and checks “get lost in the mail” so it’s a little bit of work, but nothing serious.
The one thing you need to think about is most non-owner occupied loans will require 25% down. I’m not a broker, so I could be wrong, but I was told that you can get hit hard or not get loans if you can’t come up with that. Also, form an LLC. It can help in many ways. It protects your personal assets from a suit related to the property and it also allows you to be the “manager” instead of the “owner” to tenants. They write checks to Acme LLC and your just following Acme’s policies. I think I’m a very reasonable landlord, but it makes a difference in dealing with tenants.
I’m not sure how useful any of that was… but best of luck.
August 28, 2009 at 1:19 PM #450750uneven
ParticipantI don’t have a lot of experience with rentals, but here’s what I’ve learned. I have a rental house (3/2) in San Jose and a condo (2/2) in Santa Ana. The 2/2 is in a complex with about 300units. HOA’s are a pain in the ass. It’s my first experience with them and it’s been non-stop aggravation. If you can afford a multi unit that you own the whole thing…. that’s the way to go. Otherwise, Id stick to SFH’s. That said, I’m making about $400/month (not including vacancy) on it. It took me 3 months to rent it at first. The tenant is good, but still has to be called every other month to remind them to pay the rent.
The 3/2 in SJ was my house for 5 years before I moved south. It’s been rented for 2 years with a new tenant after year one. I loose about $100 a month, including paying a property manager up there. Again, tenants have issues here and there, and checks “get lost in the mail” so it’s a little bit of work, but nothing serious.
The one thing you need to think about is most non-owner occupied loans will require 25% down. I’m not a broker, so I could be wrong, but I was told that you can get hit hard or not get loans if you can’t come up with that. Also, form an LLC. It can help in many ways. It protects your personal assets from a suit related to the property and it also allows you to be the “manager” instead of the “owner” to tenants. They write checks to Acme LLC and your just following Acme’s policies. I think I’m a very reasonable landlord, but it makes a difference in dealing with tenants.
I’m not sure how useful any of that was… but best of luck.
August 28, 2009 at 1:19 PM #450677uneven
ParticipantI don’t have a lot of experience with rentals, but here’s what I’ve learned. I have a rental house (3/2) in San Jose and a condo (2/2) in Santa Ana. The 2/2 is in a complex with about 300units. HOA’s are a pain in the ass. It’s my first experience with them and it’s been non-stop aggravation. If you can afford a multi unit that you own the whole thing…. that’s the way to go. Otherwise, Id stick to SFH’s. That said, I’m making about $400/month (not including vacancy) on it. It took me 3 months to rent it at first. The tenant is good, but still has to be called every other month to remind them to pay the rent.
The 3/2 in SJ was my house for 5 years before I moved south. It’s been rented for 2 years with a new tenant after year one. I loose about $100 a month, including paying a property manager up there. Again, tenants have issues here and there, and checks “get lost in the mail” so it’s a little bit of work, but nothing serious.
The one thing you need to think about is most non-owner occupied loans will require 25% down. I’m not a broker, so I could be wrong, but I was told that you can get hit hard or not get loans if you can’t come up with that. Also, form an LLC. It can help in many ways. It protects your personal assets from a suit related to the property and it also allows you to be the “manager” instead of the “owner” to tenants. They write checks to Acme LLC and your just following Acme’s policies. I think I’m a very reasonable landlord, but it makes a difference in dealing with tenants.
I’m not sure how useful any of that was… but best of luck.
August 28, 2009 at 1:38 PM #450165evolusd
ParticipantI can speak to financing of apartment properties, as we do quite a bit here at the Bank where I work. Most banks underwrite to the cash flow of the property – they’ll want to see the appraiser’s estimate of NOI be sufficient to cover the required P&I payment with a 30Y amortization by a margin of at least 1.25x. This typically limits your LTV to 60-70% depending on the cap rate of the property. A personal guaranty is almost always required, and holding the property in a single-asset LLC is preferred.
Back in the loosey goosey days banks were going much more aggressive, but they’ve all imploded now and credit is much tighter, at least from my POV.
August 28, 2009 at 1:38 PM #450951evolusd
ParticipantI can speak to financing of apartment properties, as we do quite a bit here at the Bank where I work. Most banks underwrite to the cash flow of the property – they’ll want to see the appraiser’s estimate of NOI be sufficient to cover the required P&I payment with a 30Y amortization by a margin of at least 1.25x. This typically limits your LTV to 60-70% depending on the cap rate of the property. A personal guaranty is almost always required, and holding the property in a single-asset LLC is preferred.
Back in the loosey goosey days banks were going much more aggressive, but they’ve all imploded now and credit is much tighter, at least from my POV.
August 28, 2009 at 1:38 PM #450356evolusd
ParticipantI can speak to financing of apartment properties, as we do quite a bit here at the Bank where I work. Most banks underwrite to the cash flow of the property – they’ll want to see the appraiser’s estimate of NOI be sufficient to cover the required P&I payment with a 30Y amortization by a margin of at least 1.25x. This typically limits your LTV to 60-70% depending on the cap rate of the property. A personal guaranty is almost always required, and holding the property in a single-asset LLC is preferred.
Back in the loosey goosey days banks were going much more aggressive, but they’ve all imploded now and credit is much tighter, at least from my POV.
August 28, 2009 at 1:38 PM #450765evolusd
ParticipantI can speak to financing of apartment properties, as we do quite a bit here at the Bank where I work. Most banks underwrite to the cash flow of the property – they’ll want to see the appraiser’s estimate of NOI be sufficient to cover the required P&I payment with a 30Y amortization by a margin of at least 1.25x. This typically limits your LTV to 60-70% depending on the cap rate of the property. A personal guaranty is almost always required, and holding the property in a single-asset LLC is preferred.
Back in the loosey goosey days banks were going much more aggressive, but they’ve all imploded now and credit is much tighter, at least from my POV.
August 28, 2009 at 1:38 PM #450692evolusd
ParticipantI can speak to financing of apartment properties, as we do quite a bit here at the Bank where I work. Most banks underwrite to the cash flow of the property – they’ll want to see the appraiser’s estimate of NOI be sufficient to cover the required P&I payment with a 30Y amortization by a margin of at least 1.25x. This typically limits your LTV to 60-70% depending on the cap rate of the property. A personal guaranty is almost always required, and holding the property in a single-asset LLC is preferred.
Back in the loosey goosey days banks were going much more aggressive, but they’ve all imploded now and credit is much tighter, at least from my POV.
August 28, 2009 at 5:39 PM #450871jamsvet
ParticipantI was into investment property until about 4 years ago, now all I’ve got are some small commercial props and a little strip mall. I just don’t think that anything now makes economic sense. All my props I’ve had for a long time. There is no way that you can buy something today especially multifamily and make money.
Yeah, you’ll hear from “experts” that say look at he numbers, if you buy for a GRM of 10 with a 5% vacancy factor, etc, etc, etc. Real world, something always comes along to screw up those numbers. Especially if you need a decent cash flow. It only takes a unit to be vacant for one month to really screw things up.
Hate to be a downer, but until investment properties get back to something approaching realworld values, my money is in CDs.
August 28, 2009 at 5:39 PM #451058jamsvet
ParticipantI was into investment property until about 4 years ago, now all I’ve got are some small commercial props and a little strip mall. I just don’t think that anything now makes economic sense. All my props I’ve had for a long time. There is no way that you can buy something today especially multifamily and make money.
Yeah, you’ll hear from “experts” that say look at he numbers, if you buy for a GRM of 10 with a 5% vacancy factor, etc, etc, etc. Real world, something always comes along to screw up those numbers. Especially if you need a decent cash flow. It only takes a unit to be vacant for one month to really screw things up.
Hate to be a downer, but until investment properties get back to something approaching realworld values, my money is in CDs.
August 28, 2009 at 5:39 PM #450798jamsvet
ParticipantI was into investment property until about 4 years ago, now all I’ve got are some small commercial props and a little strip mall. I just don’t think that anything now makes economic sense. All my props I’ve had for a long time. There is no way that you can buy something today especially multifamily and make money.
Yeah, you’ll hear from “experts” that say look at he numbers, if you buy for a GRM of 10 with a 5% vacancy factor, etc, etc, etc. Real world, something always comes along to screw up those numbers. Especially if you need a decent cash flow. It only takes a unit to be vacant for one month to really screw things up.
Hate to be a downer, but until investment properties get back to something approaching realworld values, my money is in CDs.
August 28, 2009 at 5:39 PM #450269jamsvet
ParticipantI was into investment property until about 4 years ago, now all I’ve got are some small commercial props and a little strip mall. I just don’t think that anything now makes economic sense. All my props I’ve had for a long time. There is no way that you can buy something today especially multifamily and make money.
Yeah, you’ll hear from “experts” that say look at he numbers, if you buy for a GRM of 10 with a 5% vacancy factor, etc, etc, etc. Real world, something always comes along to screw up those numbers. Especially if you need a decent cash flow. It only takes a unit to be vacant for one month to really screw things up.
Hate to be a downer, but until investment properties get back to something approaching realworld values, my money is in CDs.
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