Things To Look For In An Investment Property?
I am looking at a multi family home in queens, new york. It is in a great location. All the calculations workout. My only concern is that I must accept the tenents with the purchase. What should I look for when accepting the tenents? I need to interview the tenents correct? I need to also scrutinize the lease agreement that the previous owner had with the tenents as well? Any suggestions? FYI: I have always purchased units that are vacant. I'm not sure if this is drowning myself in deep waters.
As far as your new purchase you are stuck with the existing tenants. Best you can do is check out to see what you have. When do leases expire? If you are upgrading the property and want to raise rents you must wait until the current lease expires. If you want to kick any out the only real way is for non pay. Check their pay history. If you have some really undesirable ones, trash etc, you may pay them to move or ???. Hard to go to court and get people evicted except for non pay if lease has not expired. Just a few thoughts. Learn what you have and where you want to be and make a plan
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
You can always renegotiate leases as long as both parties agree. You may offer to let their lease go month to month after 4 months instead of 12. Most people like the idea of a short lease. (Think of your cell phone contract). You might tell them that you just purchased the building and would like to renegotiate their lease and in the process go to month to month AND drop their rent by $10 per month. You could also offer them incintives to leave. Just a few thoughts.
Would you want them to move in case they're bad tenants or would you want them to move because of rehab work, etc?
I've always preferred my places to be occupied when I buy. In my eyes that is a serious plus. I usually don't do a very in depth interview with the tenants except to ask them about the current owner, how they felt they were treated, any problems they have with the property. They can be a wealth of information on the property and the way they feel about their current living conditions. You can get their pay histories from the financials, or prev. tax returns. Another plus is the fact that if you are borrowing money on the property, you will receive one months rent free and clear due to the fact that leases are paid in advance and loan payments are in arrears. That versus an empty dwelling needs to be filled, which take advertising $, and time. If it takes you 30 days to fill that vacancy, divide that monthly payment by 12months and see what you are really receiving for that year.
Good Luck,
Shawn(OH)
Many people have been taken by buying units that are occupied without checking rental histories and interviewing the tenants. Unfotunately, some landlords, when they know they have a loser, will fill up the units by offering free rent temporarily, no down payments, no criminal or credit check, etc. Then when they get the place full they put it up for sale quickly and point out how much money they are bringing in. Buyer beware.
Quote:
On 2003-12-06 13:37, davmille wrote:
Many people have been taken by buying units that are occupied without checking rental histories and interviewing the tenants. Unfotunately, some landlords, when they know they have a loser, will fill up the units by offering free rent temporarily, no down payments, no criminal or credit check, etc. Then when they get the place full they put it up for sale quickly and point out how much money they are bringing in. Buyer beware.
That can easily be found out by checking the last 3 years tax returns
Good Luck,
Shawn(OH)
I am not sure why someone from CA would consider rental property on the opposite coast, but hey you never know what will work until you try.
landlording in the New York area is hard enough when you live reasonably close to your rental property. I would'nt even trust a property manager without living close by.
Are you sure you know what you are getting into? Do you have family near by?? Someone you can trust with this investment?
There are many miles between NY and CA, I find it hard to believe you can not/or have not found something closer to home that would yield the same return, if not better.
Good Luck, you will need allot of it.
Flyboy, I have concidered all aspects of lanlording in new york. I am originally from new york. I have family and friends in new york as well. I do have my own management company in new york. I do reside in california but i also reside in ny part of the year as well. Thanks for the concern.
I am also in California and considering investing in rentals in the Buffalo/NIagara Falls area in NY. I am mainly interested in this area due to the low prices and as a secondary consideration, the rising property values. I am mainly looking for properties around 10 to 20K per unit with good cashflow, and this area seems pretty good for this. Is there anything I should watch out for in this area? I am planning on using a local property manager because I have no contacts in NY. Anyways, any tips are appreciated. Thanks.
Looks like you need to take on a hard money partner, a 1 yr second should give you time to turn the property in your favor.
Good Luck,
Robert
A piece of the pie is better than no pie at all.
I have a contact for a 90% loan commercial drop me an email at robrivard2000 at yaw hoo dot com
Commercial loans are hard to liquidate that is why a lender can more easily do residential loans.
FHA does up to 85% LTV, amortizing over 35 years--but their process is slow and HUD is a pain in the a** to deal with.
I assume you are located in IL, well so am I. I have a couple of contacts that will do up to 90% on 5+ unit Apartments. Email me to get more information.
Young investor, If you decide you want to share the investment in that “Building” …..I’m able to partner , even if it meant more then the 10%….Email me if interested
[ Edited by Spanion_x on Date 04/18/2005 ]