Just closed on My first multifamily 3 units with tenants

Just closed on My first multifamily 3 units with tenants

Member since 2018 路 29 posts 路 6 votes

Hello Everyone,

I closed on my first 3 units family investment property yesterday.

House is located in Providence, paid 320K, property in great shape and has character. There are 2 bed 1 bath units, the first two floors have large living room with fire places (not working and there are also large dining room and fairly spacious kitchens. Monthly rent is $3700.

By the end of the day as I was calling the tenants to to introduce myself and give out instructions as to the rent payment. I found out that there was a messy situation between tenants on the third floor (two young women, on is a mother of a two years old. Both women are on the lease), and the tenant on the second floor a young man in his 20s (whose mother is a co-signer on the lease).

Tenant of the second floor unit, has a Pitt bull on premises (not on the lease and it says no pets unless there is written addendum added to the lease). It looks like more people (not on the lease) are living in the apartment (2 to 4), drinking, smoking, fighting, load music and partying goes on until dawn. I observed a Cadillac SUV in the garage allocated to apartment 2nd floor unit. Damage to garage door after partying or fighting reported by other tenants and only now confirmed by seller's agent.

Furthermore, one of the tenants on the 3rd floor has reported to me that tenant of second floor has made threats to physically harm her. She also said that her two years old child is constantly inhaling smoke coming from the second floor, and she is afraid the Pitt bull may harm her child as it is sometimes let loose in the stairs and the back yard.

The mother of the 2nd floor tenant is a nice lady, I have met her once while I was there with the house inspector. When I called her today to introduce myself as the new owner, she swiftly paid me the March rent. I was not aware of the problem when I called her.

I don't want to deal with a young man who may be violent and has 3 more men who may also be violent and a pitt bull living in the apartment. The person who opened the door when we did a final walk through looked rough (I was told by seller's agent that he was the tenant brother only there while the tenant was traveling and watching the dog and the house). We never got to see the bathroom as the rough looking guy claimed someone was there. I also saw two more people swiftly leave by the backdoor and jump in the SUV Cadillac and come back when we left to park right back in the garage allocated to the second floor apartment. This morning I received photos of pittbull poop on the hallway in front of the second floor apartment which I swiftly forwarded to the mother.

I do not want this tenant at all as I can totally relate to what the third floor tenant has expressed in some of her text messages with former owner. "I don't feel safe with them on the second floor" her words.

I called back the mother lease co-signer and I said to her that I think her son needs to find a new place as there are too many issues and it was beyond anything she can do to fix it. She tried to blame the other tenants and I had to cut her short.

The seller agent offered to find her son a new apartment and take care of the process so we can part smoothly without having more drama. Both I and the seller agent spoke to the mother in length and she agreed over the phone. He already sent her a new place to look at.

I am new at all of this and I want to do things properly. How do I handle this?

What should I do or not do?

How do you handle a new acquisition with tenants in a most professional way.

Please help 

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Buy and Hold Investor 路 Cranston, RI 路 Member since 2013 路 1k+ posts 路 1k+ votes
7y

@Najat F Kessler from your description it does sound like the second floor tenants are the main issue here.

Are they on a year lease? Month to month?

It will be much easier if it's month-to-month as you can just give them a notice of termination.

If on a year lease you will have to examine the lease and possibly do an eviction for reasons other than non-payment, which is longer and more costly than evictions for non-payment. It is a process which will probably involve giving them notice and a chance to correct, before you can ultimately do an eviction.

Either way it sounds like they are/will be difficult so I would strongly recommend consulting an attorney who specializes in evictions. It may not come to that, but since this is your first property I would suggest you go through an attorney anyway, even if it's month to month and it just comes down to sending the notice of termination.

When I take over a building I also send or deliver a standard "takeover" or "welcome" letter to introduce myself as property manager and let the tenants know the answers to their two main questions: 1) who do I call/contact when I have a maintenance/repair request, and 2) how/where do I pay rent. Then (if the letters were mailed or delivered without meeting the tenants), I follow it up with an in-person meeting to introduce myself and answer any questions they may have.

I hope this helps, let me/us know if you have more questions or how else we can help!

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  • Buy and Hold Investor 路 Cranston, RI 路 Member since 2013 路 1k+ posts 路 1k+ votes
    7y

    @Najat F Kessler from your description it does sound like the second floor tenants are the main issue here.

    Are they on a year lease? Month to month?

    It will be much easier if it's month-to-month as you can just give them a notice of termination.

    If on a year lease you will have to examine the lease and possibly do an eviction for reasons other than non-payment, which is longer and more costly than evictions for non-payment. It is a process which will probably involve giving them notice and a chance to correct, before you can ultimately do an eviction.

    Either way it sounds like they are/will be difficult so I would strongly recommend consulting an attorney who specializes in evictions. It may not come to that, but since this is your first property I would suggest you go through an attorney anyway, even if it's month to month and it just comes down to sending the notice of termination.

    When I take over a building I also send or deliver a standard "takeover" or "welcome" letter to introduce myself as property manager and let the tenants know the answers to their two main questions: 1) who do I call/contact when I have a maintenance/repair request, and 2) how/where do I pay rent. Then (if the letters were mailed or delivered without meeting the tenants), I follow it up with an in-person meeting to introduce myself and answer any questions they may have.

    I hope this helps, let me/us know if you have more questions or how else we can help!

  • Member since 2018 路 29 posts 路 6 votes
    7y

    @Anthony Thompson Thank you for your reply. To answer your question, all tenants have a year lease. I have already sent an email to my lawyer but since it is through the weekend it is a bit though. We closed on Friday past 12 pm and I only found out about all of this on Friday eve.

  • Buy and Hold Investor 路 Cranston, RI 路 Member since 2013 路 1k+ posts 路 1k+ votes
    7y

    @Najat F Kessler yes that's tougher then.

    You'll want to look at the lease for something like not disturbing other tenants. You could also use the presence of the dog/pit bull but then you'll get the old "it's not our dog, we were just dog sitting for a friend" line.

    Again you want to go through an attorney, but my guess is that you'll end up having to do an eviction for other than non-payment of rent. Take a read through the Eviction for Failure to Abide by Rental Agreement section in the RI Landlord-Tenant Handbook.

    Also if your attorney doesn't specialize in evictions, it may be more cost effective - either now or for future evictions - to use an attorney who does. It's advantageous in a couple of ways.

    First, the judges already know them, which is important because when a judge sees an attorney s/he isn't familiar with, and especially one who doesn't seem like s/he usually practices in that area, some judges will want to "school" them - at your expense of course.

    Second, because that attorney has other evictions they're probably going to be doing anyway, you don't end up having to be solely responsible for paying for their trip to/from eviction court that day. Whether they take your eviction or not, they're going to be there, so I find it can be more cost effective.

    However, if this is your first time around there may be a comfort factor in using your regular attorney, which I wouldn't blame you for. Just something to keep in mind for future evictions (which, if you're in real estate, are bound to happen again sooner or later unfortunately).

  • Member since 2018 路 29 posts 路 6 votes
    7y

    The seller knew that this was a big problem and never disclosed it! I am wondering if this is legal?

    In regard of a lawyer who specialize in tenants issues please feel free to send me a referral if you have one.

    Thank you Anthony!

  • Real Estate Broker 路 Winthrop, MA 路 Member since 2014 路 260 posts 路 199 votes
    7y

    @Anthony Thompsons advice is spot on. Try cash for keys, in other words maybe offer the 2nd floor tenant some cash to leave. Have your eviction Atty or regular atty do all of it, and as they always say on the pod cast just say your the property manager.

    Get them out, you鈥檒l be happier. I personally don鈥檛 mind evicting people, but if this is your first place it gets costly. Don鈥檛 let the people intimidate you.

    Good luck! 

  • Rental Property Investor 路 Erie, PA 路 Member since 2018 路 6k+ posts 路 9k+ votes
    7y

    @Najat F Kessler

    A lawyer who specializes in tenant issues ??? That鈥檚 the job of the manager aka you . This is the fun part of multifamily no one ever talks about at the seminars or guru classes . Trying to get all these personalities under one roof to get along and not move out or kill each other .

  • Member since 2018 路 29 posts 路 6 votes
    7y

    @Dennis M.

    Thank you for your reply.

    It is not just about personalities not getting along. Within only one month of being there the second floor tenant has:

    - a brother not on the lease living with him + 2 more people parking their SUV Cadillac and on premises

    - a pitbull not on the lease

    - busted garage door

    - pitbull is let out in the hallways and yard freely he even 馃挬 in the stairs hallways and yard and tenant leaves the poop right there

    - etc.

    Yes, I need a lawyer to cover my basis and get him out asap.

  • Rental Property Investor 路 Erie, PA 路 Member since 2018 路 6k+ posts 路 9k+ votes
    7y
    Originally posted by @Najat F Kessler:

    @Dennis M.

    Thank you for your reply.

    It is not just about personalities not getting along. Within only one month of being there the second floor tenant has:

    - a brother not on the lease living with him + 2 more people parking their SUV Cadillac and on premises

    - a pitbull not on the lease

    - busted garage door

    - pitbull is let out in the hallways and yard freely he even 馃挬 in the stairs hallways and yard and tenant leaves the poop right there

    - etc.

    Yes, I need a lawyer to cover my basis and get him out asap.

    You could fix everyone of these problems yourself . Sounds like you need a good property manager ASAP . If you gotta call a real estate lawyer everytime these things come up you will be broke real quick . Multis get problems like this all the time especially in lower income c or d areas . I personally think you may have a hard time doing this if you don鈥檛 learn your laws and change your strategy going forward . Good luck 

  • Member since 2018 路 29 posts 路 6 votes
    7y

    @Dennis M.

    Thanks Dennis.

    Can you please walk me through how you would handle this yourself?

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