New investor - need advice

8 Replies

Hello - I have finally acquired my first rental property (a duplex) and I plan to get my feet wet and manage myself to not only learn but save money since property management doesn't pencil at this point.

One renter seems OK for now and has been in occupancy a few years. The other tenant has been there years and will be evicted for numerous reasons that the previous owner did not care to address.

I plan to fix up the property over the next few months and renew the existing tenant to a higher, 1-year lease and then search for a new tenant at market rate.

Feeling a bit overwhelmed, I'd like some advice on where to start with a new thorough lease and forms to use since I want to secure a new lease with the existing tenant and will need to screen for a new tenant once I evict and renovate the other unit.

I am considering to join the California Apart. Assoc. but even that is quite expensive for a one-duplex owner and not sure if it is worth it just yet. Other than the numerous "Real estate investing books" I have, any other advice/direction would be much appreciated. Thanks!

Congrats on the first property! I started with a state specific lease from EZLandLordForms.com - so you can check there to see if the lease meets your needs. BP has also recently begun to add state specific leases and other docs you can use.

I would find a local attorney and begin the eviction process for the one tenant, and then get the other under my lease ASAP. You may also want to consider "Cash for Keys" to avoid having to do an eviction - letting that tenant know how an eviction will negatively effect them going forward.

I also started with Cozy.co for tenant screening and rent collection. I'd advise pulling credit and checking background even on the tenant you plan to renew - letting them know it is required to have on file for all tenants of your company (even if already present at purchase), including SS# & DL copy. Let them know you have a system and they must adapt to that system (no option) now that you are the owner.

Originally posted by @Jonathan Taylor Smith :

"I would find a local attorney and begin the eviction process for the one tenant, and then get the other under my lease ASAP. You may also want to consider "Cash for Keys" to avoid having to do an eviction - letting that tenant know how an eviction will negatively effect them going forward."

I also started with Cozy.co for tenant screening and rent collection. I'd advise pulling credit and checking background even on the tenant you plan to renew - letting them know it is required to have on file for all tenants of your company (even if already present at purchase), including SS# & DL copy. Let them know you have a system and they must adapt to that system (no option) now that you are the owner.

 Thanks for the reply.

Just to clarify, my understanding is that I can simply serve them notice to vacate in 60 days (since they've been there for more than one year - and are now effectively month to month) without reason. Whether I plan to renovate the place, move in myself, or any other reason shouldn't be of their concern or cause to sue me for some reason. That should then not be classified as an "eviction", correct? 

I assume that an eviction would speed up the process since I could lay claim to various legal issues. Full disclosure, that particular tenant is a hoarder and the unit is in disarray. 

Welcome . I would for sure invest the time to join the association and learn all you can on your leases. 

@Clay W. - Well you said "The other tenant has been there years and will be evicted for numerous reasons..." - so I assumed you needed to evict. But YES, if they are month-to-month, you can give notice of non-renewal and provide the number of days as required in your area, which will almost certainly be cheaper and faster than an eviction.

Originally posted by @Clay W. :
Originally posted by @Jonathan Taylor Smith:

"I would find a local attorney and begin the eviction process for the one tenant, and then get the other under my lease ASAP. You may also want to consider "Cash for Keys" to avoid having to do an eviction - letting that tenant know how an eviction will negatively effect them going forward."

I also started with Cozy.co for tenant screening and rent collection. I'd advise pulling credit and checking background even on the tenant you plan to renew - letting them know it is required to have on file for all tenants of your company (even if already present at purchase), including SS# & DL copy. Let them know you have a system and they must adapt to that system (no option) now that you are the owner.

 Thanks for the reply.

Just to clarify, my understanding is that I can simply serve them notice to vacate in 60 days (since they've been there for more than one year - and are now effectively month to month) without reason. Whether I plan to renovate the place, move in myself, or any other reason shouldn't be of their concern or cause to sue me for some reason. That should then not be classified as an "eviction", correct? 

Serve a 60 day notice to them.  You don't have to have "cause" to do so, as others have mentioned.  But, I would not recommend the 3 day notice to vacate (which requires good cause) because courts in California have high standards for what meets "good cause" other than non-payment of rent.  Basically, if they are "materially damaging" the property or blatantly violating a specific term of the lease (such as if the lease says no drug use but they are using the property for regular drug parties for the entire neighborhood).  Hording sucks, but its not the same as material damage.  A 3 day notice will likely not be deemed proper by a court anyway and you'll have to start back over with the 60 day notice anyway.  Don't waste the time, just serve the 60 day notice and if they are still there after 61 days, have an attorney file an unlawful detainer suit against the tenant.

Congratulations! Depending on the amount of time you have to spend on managing the tenants and dealing with finding new qualified tenants you may want to at least compare the costs of hiring a Property Manager. It is probably cheaper than joining the apartment association and they would have the means to qualify a new tenant (credit, criminal, rental history, income) and ensure that the tenants are signing a lease that follows the laws in CA. 

Originally posted by @Max Gradowitz :

Serve a 60 day notice to them.  You don't have to have "cause" to do so, as others have mentioned.  But, I would not recommend the 3 day notice to vacate (which requires good cause) because courts in California have high standards for what meets "good cause" other than non-payment of rent.  Basically, if they are "materially damaging" the property or blatantly violating a specific term of the lease (such as if the lease says no drug use but they are using the property for regular drug parties for the entire neighborhood).  Hording sucks, but its not the same as material damage.  A 3 day notice will likely not be deemed proper by a court anyway and you'll have to start back over with the 60 day notice anyway.  Don't waste the time, just serve the 60 day notice and if they are still there after 61 days, have an attorney file an unlawful detainer suit against the tenant.

Thanks to you and others for your responses. Very concise and exactly what I wanted to reaffirm! I plan to serve the notice this week, focus on unit rehab in 2 months time (if the tenant can get out by then!), and get going on re-tenanting at market rate.

Now I just need to get the proper forms without breaking the bank!

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