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Bloodnose posted:What happens if you don't pay HOA dues in the US? Does it vary by state? They can't evict you from a property you own, right? That'd be crazy. It's a lien that has to be paid off when you sell the house. Not sure if it subordinates bank debt like a mechanic's lien or is subordinate to the bank debt though.
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Oct 16, 2013 05:06
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DNova posted:I don't know if things are different around my area or what, but I talked to a bank about buying a building with a small branch of a national bank as one of the tenants. There was nothing special about the financing. It wasn't a gigantic plaza or something, though. It was a few storefronts and a few apartments. With a national tenant like that you have to look at how much lease they have left and what will happen when it expires. The Boulder Group puts out cap rate research on a lot of single-tenant stuff, but for mixed use like that you'll still be able to direct cap the apartments, but you'll want to run a dcf on your retail spaces.
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Oct 31, 2013 14:37
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smackfu posted:I have a random question inspired by some bar + property show I watched. (Called Bar Hunters of course.) If you rent a commercial storefront, then put a lot of money into refurbing it for your purposes (like turning a bank into a bar) are those improvements essentially just given to the landlord? How are you protected from them kicking you out and renting the improved property to someone else at a higher rate? Your lease may or may not cover what happens to tenant improvements which occur during the term of the lease. Landlords will typically pay an tenant improvement allowance, above which the tenant is free to spend on improving the leased space. What is important here is the lease terms and length. If you sign a short term lease without renewal options, the landlord can jack up your rent upon renewal or keep the improvements and lease the space to someone else for more. Between lease renewals there is less lee-way, but upon lease expiry the improvements will typically revert to the landlord and they can do whatever they want with them. With that said, if the bar is a successful business, the landlord will likely increase rents because the tenant would rather stay there than spend the money to move and improve a new space, unless another landlord with a similar property is willing to offer a combination of tenant improvements and below market rents to win a prime tenant. The question boils down to: Is the bar successful because of the location, or is the bar successful because of the superior operations or branding aspects of the business.
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Jan 3, 2014 02:47
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That, or convert a couple floors into a kickin rad penthouse.
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May 2, 2014 05:18
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FISHMANPET posted:Don't even joke about that. If I won the lottery or just came into some money, I'd buy the apartment building I live in (80 or so units) and turn 3 or 4 units into a rad penthouse. Someday, someone will convert LPM to condos, and then we can fight each other for the top floors. Or that lot by Calhoun, except it's by Calhoun so no one will ever be able to get something built there.
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May 2, 2014 21:44
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Bloody Queef posted:I have only had success with craigslist. I just keep the ad up in the top by reposting and I've always had tons of respondents. I'm sure that my pool is being limited to 20-35 year olds or tech savvy older folks, which doesn't match the demographics of the area well, but it's worked so far. We've done this as well and it was worked out reasonably well so far.
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Sep 30, 2014 15:36
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Mercury Ballistic posted:My tenant called today to tell me the fence in the back yard blew over. Just one section failed from the big winds we had recently. It has been there since before I bought the place, and I am wondering how one determins ownership of a fence on a property line. FWIW the vertical posts are not visible, ie I see the "pretty" side from my side of the fence. The other property is a rental as well and the owners are hard to contact. Get a survey done, put a new fence up and take their land. Then they'll be easier to get in contact with.
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Feb 16, 2015 02:48
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If you are worried about capital gains, you could also use a 1031 exchange to defer the gains into another commercial property.
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Feb 21, 2015 19:36
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I mean, there is probably value if you have the creditworthiness to lease the property and then sublease parts of it. Do you have subtenants lined up and if so, why don't they want to be on the master lease? You'll have a sandwich leasehold here where you've got the risks of paying rent on the place if you can sublease rooms or not, plus if your landlord and master lease have issues with subtenants. It might not be common, but it is definitely something you can do. You may be able to privately collect deposits from your subtenants, but if they move out, you'll have to be able to refund their deposits per the terms of your sublease with them.
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Nov 16, 2015 00:36
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vulturesrow posted:Follow on question: Does anyone have experience with section 1031 exchanges? I dint know much about them but seems it might be an avenue to not have to pay the depreciation recapture. That is definitely a lawyer/accountant question for the first time you do it. You wouldn't have a depreciation recapture in that case, but you would have a lower base to depreciate the new property if I recall correctly.
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Jan 1, 2016 20:12
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I've had to do it for the apartments I rent in, but I talked with my parents' insurance people about it before I did. If you have an insurance person that you or your family deal with and trust, I would check with them.
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Jan 15, 2016 03:32
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Condolences for your loss. Based on what you've written, I've put together a list of my thoughts. Basement space is tough in commercial, sometimes it has office value like you seen to he getting for it, otherwise you can only get storage rental rates on it, but you manager probably knows the market better than I do. If your property manager's firm has a brokerage operation, they may be someone to reach out to regarding the leasing, although they may want to represent your whole building and collect a fee on new leases and renewals. Usually they are worth it and you may be able to get some discount if they are working with you on more than one service line. Unless the buyout clause is set at a dollar amount and updated fairly regularly, you may have to expect some issues to crop up with that no matter what. What I see in some buyout agreements is to specify having two appraisals done, using the average of those or then getting another one if there is a disconnect over 10%. When it comes down to it though, this is a negotiation question and the valuation of the real estate may or may not reflect the buyout value. With an appraisal though, you'll probably need one anyways for estate tax purposes in the case of a death. Capital calls maybe something you want to talk about in your agreement, for if the roof need replacement for something that isn't covered by insurance or you have a big tenant improvement project for a long term lease, how do you fund that, and how do you dilute ownership in the event that someone doesn't contribute? Alternatively, this can be addressed ad hoc, but should be on the radar as something that can come up. With regards to expenses, are your leases gross or net? If you have net leases, you won't see a significant change in your ownership income until the end of the leases in place, where you can show your tenants that their common area expenses are down so their total rent and CAM charges are down even though the face rent is up. This is also relevant with regards to your comps, where if you have a more efficient building and can show that to prospective tenants, you can charge higher face rents but offer space for less given the lower expenses that need to be passed through. As far as government, there may be a neighborhood group that does a level of government, also your neighborhood local government representative would be a decent person to get to know. All these people are probably good to have on your side if you want to do something like a billboard or cell tower on top of your property that may be in a gray area with regards to the zoning or requires neighborhood input.
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May 7, 2016 16:31
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My first instinct would be to point you at the local CBRE/Colliers/DTZ-Cushman-Cassidy Turley/JLL and see if they can landlord rep you if you want to go for a national tenant like CVS/Walgreens. Those tenants might not like basement, but those firms will have people who can market your space to a wider range of clients, although there may be a local brokerage operation that could be useful in your submarket. I like the gym, and that may be something you could do by just calling whoever has the local franchise for one of the 24 hour ones and work out a deal for your other tenants to get a discount there as a building amenity. I'm in Minneapolis and we've seen people put speak-easy like establishments into basement spaces, but I have no idea if they make economic returns or are more vanity projects. Also the build outs on them looked very expensive so cutting rents on the basement space may be the way to go if a local broker doesn't think they can get that leased in a reasonable time, and paying mortgages on vacant spaces is no one's idea of fun. It sounds like you want to be a little more involved in the property, do your partners want to be more active with it or do they just want the rent checks to keep flowing without making operational changes? Net/Gross is nice to move incentives around and get your tenants to turn off the lights, but generally isn't hugely different except with property taxes, where reassessments can hurt if you have been historically low and then the assessor increases the value or the taxing jurisdiction starts spending more. As far as towers/boards go, there can be value in that, but they also have really long leases which could complicate things if you think land value might be higher than the improved value late in the lease. It sounds like you are keeping the place up well though, so that seems unlikely. Sidewalk signage is generally going to be somewhere in the zoning code, but actual enforcement may involve a set of conditional use permits. A sprinkler system would be expensive, new they are usually 2-3 bucks a foot if I'm thinking size right but I haven't seen costs on retrofitting, but could be bundled with a larger renovation if you decide to seperately meter spaces for utilities to put in net leases at some point in the future or do a big tenant improvement project.
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May 7, 2016 19:10
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Sounds like you've got things pretty well in hand Slime Bro. Hope things work out with the operating agreements.
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May 8, 2016 18:04
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The switch to a rental could result in the loss of a homestead exemption. Your ROI could also consider if depreciation can shield your income from taxes. You could also look at eventually doing a 1031 exchange of this property for another if you want to defer capital gains.
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Jun 27, 2017 00:21
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lampey posted:PayPal friends and family, cozy.co, venmo The issue with Venmo is that transactions can be reversed by the sender within a couple days, so it can be less desirable if you are concerned about collections instead of convenience.
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Oct 28, 2017 17:38
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TouchyMcFeely posted:Has anyone bought a property specifically with giving it away as a gift in mind? My mom has a duplex that she rents out and pulled my brother and I into the maintenance of the property when we were growing up. Have it as another set of chores/employment for him to help you take care of the them and just tell him that he'll end up with the places one day. The exact ownership structure I would say is a lawyer question to do it in a reasonable manner, but unless he is going to go to college near home, don't put the property in his name unless you are going to be transferring piles of assets over the years and want to do it while they have lower values (this is probably also an estate planning question). 18 years seems young for that, if you are going to give him the property I would say 25 or graduating college are two benchmarks that would work better. My parents keep me in the loop on their estate planning and if anything happened to them while I was younger, 25 was going to be the age things came out of trust. Thankfully it didn't come up, but 18 seems kind of young to transfer significant amounts of wealth to kids. Your friends with older kids may have or start having stories of transferring wealth too young, with the kids buying corvettes and dropping out of college, so the two pieces of advice my parents got were tie it to later in life and don't make it enough to get addicted to anything good.
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Oct 30, 2017 17:19
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enraged_camel posted:Yeah, I thought about this. It's a bit tricky because this is a brand new apartment building so we have no data on average length of tenancy. But we'll check if we can find it out for neighboring buildings. Are there ways to raise rent above inflation by improving the property? Could you store the dishwasher and washer/dryer somewhere else and then 'renovate' the unit by installing them later to increase the rent or trigger a rent increase event in some way like that? The anticipated rent increase is going to be the driver here, if your marginal rent projected out to your expected tenancy is more than your lost rent for keeping it vacant (both discounted at your parents' cost of capital). Average rental tenure could be pretty hard to find, and your small sample size is going to increase volatility. What do sublease rights look like there, could the tenant hold onto the place and sublease it as a sandwich leasehold if rents go really crazy? Other owners in the building may be making similar calculations and could be good people to bounce ideas off of if there is a chance to talk to them.
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Dec 15, 2017 02:44
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The State of Minnesota requires that you provide your tenants with a Certificate of Rent Paid so they can deduct the statutory portion of property taxes from their taxes. Your state may have something similar, so talking to a local lawyer on landlord tenant law is a good idea for the licensing requirements of your city and state. Insurance may be different, so that would be a good thing to verify as well. A tax accountant may be able to help you determine if you can depreciate the house against your taxes and or deduct some maintenance expenses too.
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May 25, 2018 02:16
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Sundae posted:Sorry to ask a beginning question here, but since this thread is five years old, I'm not sure if the references early in the history are still decent sources. Where would you recommend starting reading / learning if one was maybe interested in owning rental property? I know jack poo poo and want to do some general reading. I think they are still relevant. State specific stuff may change, plus national tax changes, but otherwise should be mostly relevant.
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Jul 10, 2018 23:14
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If you really want to get into it, some kind of ground rent would be rent extraction, while your improvements are a capital investment with a finite life and maintenance needs, with a return on/of capital invested considered necessary for a functioning housing market.
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Sep 15, 2018 18:31
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There’s someone from Iceland who posts, rental properties were one of the few things they could invest in when Iceland defaulted and cut itself off from global financial markets for a bit.
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Nov 23, 2018 20:26
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How long have they been running it? Do they have P&Ls that they can give you as well? You may have to price in a reassessment in your cap rate if the assessment is lagging the renovations.
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Jan 11, 2019 22:51
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It might not be quite big enough to finance with an agency SBL program, but if you find something bigger you could get agency debt from Freddie. The underwriting can be slower than a bank and they want more disclosure, but you will have trouble beating agency financing on stabilized multifamily. https://mf.freddiemac.com/docs/product/small_balance_loan.pdf The typical process will check a bunch of boxes from this document, but the multifamily side of the agencies have really low loss rates: https://www.fanniemae.com/content/guide/multifamily-selling-servicing-guide.pdf Also take a look at how your proposed pricing compares to the last few years of multifamily sales in Johnson County: https://www.johnson-county.com/dept_jc_assessor.aspx?id=7337 Iowa has good public assessor databases in most counties, so you should be able to compare these sales to this one and see how it looks relative to the market.
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Jan 12, 2019 01:34
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A million posts in the landlord thread, did someone have a professional squatter pour concrete in their toilets? Oh...
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Mar 27, 2019 02:36
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Adam Smith’s use of landlord is the same that Henry George used, as far as the right to use a particular parcel. Georgist land taxes rest on the principle that the improvements represent productive investment and the marginal product of the land itself should be the property of the state. A landlord renting out an apartment unit and a groundlord with a 100 year ground lease have very different profiles.
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Mar 27, 2019 04:05
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Adam Smith’s use of landlord is a hereditary aristocrat who will never be subject to estate or property taxes extracting rents from tenant farmers or sharecroppers, depending on the level of exploitation. A modern landlord as the term is used is much more of a capital player instead of a land player as one of the four factors of production in economics.
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Mar 27, 2019 04:25
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If you really want to, get one in a different county in the same metro, but at that size I wouldn’t mess with different markets. The extra units might let you go shop your management company a bit more and beat them up on expenses. Having your properties in the same neighborhood might get you better terms out of the lawncare/snow removal people too.
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Mar 30, 2019 02:32
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And by beat up, I mean they would probably be glad to show their bank/landlord that their recurring service revenue increased by $X, even if it comes with a little erosion of percentage margin.
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Mar 30, 2019 02:42
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That reminds me of projects in North Dakota built in the last oil boom by developers from the sunbelt, literally blocks from a plant that processes natural gas for distribution, and they used electric baseboard heat...
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Mar 30, 2019 19:30
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They were all rental buildings, so thankfully that wasn’t a factor. When Baker Hughes/GE/Halliburton/Schlumberger show up and want to lease entire buildings for their workers, there isn’t much in the way of caring about views or anything like that, more how fast can you build this thing, oil is $100 a barrel and they need bodies to get it out of the ground.
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Mar 30, 2019 19:47
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Yeah you’re a troll, but for anyone else reading: not playing by the city’s rules is a great way to have your rental licenses revoked, your insurance voided when your building burns down from space heaters in the units, your contracts cancelled when someone from the public housing authority wants to inspect the units you are taking Section 8 vouchers on, and you want to refinance your mortgage with anyone except a loan shark. Implied warranty of habitability applies in most states, so if you actually are turning off their heat in the winter, they can withhold rent until you fix it and you’re going to have the sheriff dragging their feet if you are filing evictions against people who don’t have heat in the winter. Searching your state’s apartment trade organization should be able to point you to actual laws on what your rights and responsibilities are as a landlord and let you find a form lease that has had lawyers review it at any time since the 1870s.
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Mar 30, 2019 20:57
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