I wanted to just post my experience from the last two years of being a landlord in Washington, D.C. In addition to being a landlord, I am a police officer.
The beginning , the first three months after the purchase I had a management company which didn't meet my expectations and I decided it was time to self-manage. Not only was I managing my apartment unit, I managed a single family in D.C. for my mother as well. It has been stated many times to make sure your lease/ rental agreement is reviewed by an attorney, that saved me a lot of aggravation in my case. More on that in a bit, I will start out with my first walk-around after the purchase.
I was excited to get to my building and see what needed to be done, I opened the door went and walked around in the one available unit that was open out of four. After seeing what needed to be done I was ready to leave and a tenant walked out let's call him "D". Of course he had all the general questions who are you etc, etc so at the point I had to make a decision so I told him I was the owner. I know people have different opinions but to date I haven't had a problem with all the tenants knowing I am the owner. I posted my google voice number and told the tenants to call when there was a problem. In the beginning when the tenants would call I would immediately pick-up the phone, I found that to be a problem. The more efficient I was the more they called so I started letting the calls go to voicemail and would call back immediately unless it was an emergency situation. Land lording on autopilot help me with setting the expectations of my tenants and explaining to the tenants when I should be called especially after hours. After about a year I implemented the program tenant cloud which reduced the calls to almost zero because my tenants can now pay online, sign their lease on line and submit maintenance request online.
I had some rough times starting with "D" although I told him I was the owner I didn't tell him I was a police officer I told him I did construction. Well "D" didn't believe that and I eventually I told him I was a police officer and he told me that he had just been released from prison for murder. This didn't bother me and since then we have had a very good tenant landlord relationship. My apartment is in lower income part of D.C. there's still a lot of crime, "D" became my eyes and ears of the apartment giving me invaluable information. One tenant and his girlfriend had an on and off relationship. They would break up and the tenant would kick her out but the girlfriend would just stand at the front door banging and yelling, she even got a knife and stabbed the door several times. One time I came to the apartment and found her sleeping in the back with a bottle of alcohol. Upon starting the eviction process with that tenant (this is where the good lease comes in) the girlfriend started calling and leaving threatening messages on my voicemail. She got arrested for that and for trespassing on the apartment property several times, eventually she got tired of being arrested and disappeared.
The good lease came into play due to a clause stating that upon signing I didn't have to give notice that an eviction was starting and could start the process immediately after the violation occurred. D.C. is very tenant friendly, that doesn't mean you as a landlord don't have rights it just means D.C. gives more leeway to the tenant. I've had one real eviction that took 1.5 years due to me not knowing the eviction process and giving the tenant the benefit of the doubt. My suggestion if you are a new landlord or thinking about becoming a landlord is to be rock solid on your lease and of course evaluate on a case by case basis but begin the eviction process as soon as you can.
I would definitely purchase again in D.C. it's tricky to navigate but there are good section 8 tenants you just have to ask lot's of questions and red flags need to be resolved before accepting the tenant. For example, the tenant I evicted during the screening process there were many red flags that I ignored because I thought I was being to strict.
One last story/tip if you are listing in D.C. and you are putting "Not accepting section 8 at this time" stop that's a big no no. It may seem like common sense to most people, but I made that mistake. At the time I had three section 8 tenants and wanted to give a market renter a chance to rent an apartment due to the high cost of living in D.C. I received a letter and had to go to mediation and was fined. Although my intentions were good you still can not put that in a listing
Sorry if I was all over the place, but there is so much more that has happened to me while being a landlord but this post is already long. If you want any tips or tricks of being a landlord in D.C. specifically send me a message and I'll give you what knowledge I can. Or if you just want to talk in general send me a message.
I as I could imagine have several of these similar stories of owning properties, I actually ended up creating my own PM company about 6 years ago. My basic goal is simple. Try to help new owners not fall into the same traps as I did. I actually teach classes around the country and in Australia on this and sadly it is a very common theme that I wish there was more help. I see many people talk and teach about buying the deal.. but not much on what to do the next day when you own the deal. This is what I try to help people with when I can... Nothing worse then sleepless night of worrying..
@Jon Sheffield , now that you've been properly seasoned, it's time for another purchase!
Great learning curve.
@Steve Rozenberg You are absolutely correct hopefully this helps someone down the road to help avoid the pitfalls, thanks for responding.
@Randy E. I am definitely ready for another just trying to smart and negotiate a little better this time.
@Lamont Marable lmao yes sir sometimes 12 know what they talking about lol. I am still currently managing my building it's not that bad as sometimes people make it out to be. Honestly, if you're on here you are probably business minded all my tenants enjoy me as a landlord because I am responsive and fix stuff when it's a problem. To me, that's my job as a landlord, but others have neglected them so my effort seems amazing to them. My apartment is located in SE off of MLK in D.C. a building just went up for sale last week that's connected to my building I think the address was 333 parkland pl SE for 530k. I'll send the contact info through a PM I am glad I could help
@Jon Sheffield thanks for sharing your experiences. You've picked up some great skills - PM, negotiating and finding small MF in DC - and you sound like you're ready for your next deal. Would be great to catch up with you in DC and get some advice on how to get prepared to get into the MF business in DC. Will drop you a PM.
Tip 1: Don't rent to a murderer. You may feel safe as a law enforcement officer but you may also be liable if that individual decides to murder one of his neighbors. I'm honestly surprised that you seem so lackadaisical about this.
Tip 2: Don't buy low-income, Section 8 rentals if you are a novice.
Tip 3: Don't fool around with evictions if you are a novice or you'll end up with a lot of stress and losing a lot of time and money. Hire a professional until you know the law well enough to handle it on your own.
Tip 4: Know the law. Don't reject Section 8 if the law doesn't allow it. Even if the law does allow it, you may be guilty of disparate impact. Don't know what "disparate impact" is? Read Tip 5.
Tip 5: Until you know the law and the market, you should hire a professional to handle the investment for you. i understand you can learn a lot from wasting 18 months to evict a non-paying tenant but you could spend 1/10th that amount hiring a professional and then learn through them. You don't have to pay Harvard tuition to get a community college degree.
@Jon Sheffield good post. I don't see an issue with renting to "D". He did his time and I think he is looking out for your building; you gave him a chance and you are not judging. I will manage my properties but eventually turn them over to a property management company. I still don't disclose who I am. I like to keep an arms-length, you give people a smile and they will go a mile. Income is a protected status in DC so you cannot discriminate on income and exclude section 8 tenants. I think most tenants just want a nice place to live and to be treated with respect. Respect goes both ways. Respect the property, pay on time, keep the communication channel open and everything is good.
All the DC people should meet-up :)
I appreciate your comments and everyone has their own process in how they conduct their business. I posted to show my mistakes because there are people with 0 years of experience to 50 years of experience or more. The more people that tell the true story of real estate the fewer mistakes people will hopefully make.
I understand what you are saying and will say that as long as you have criteria that you follow every time when renting to individuals then you will be fine. This individual that you are talking about was already in place when I took over the building, and he was screened through a prominent management company in the D.C. area. In D.C. you can't evict someone that is already a tenant for past criminal history unless they lied. This person went to court did his time and has been given another opportunity to become a member of society. Are you saying that this person doesn't deserve a second chance? You have your own opinion about this person and that's fine. Some people can be rehabilitated some cannot I have had many conversations with this person, he has become my eyes and ears of my building. So to say I'm lackadaisical based on a couple of paragraphs is incorrect.
A lot of people have this misnomer about section 8 tenants versus non-section 8 tenants for many reasons I will not get into. If you screen your tenants, following the many resources on biggerpockets and elsewhere you should be fine. I can't remember the podcast number it was around 60 something an investor active on biggerpockets to this day stated being against section 8. Through their experience and going through the D.C. landlord-tenant court, their realization came about that section 8 in D.C. and where the building was located section more positives than negatives.
Getting into real estate with no real estate experience and going the route of section 8 or a market tenant there will be a huge learning curve choosing either one. In D.C. it helped because instead of dealing with trying to evict an individual and not getting paid at all or receiving at least a percentage of the rent through the city helped me immensely.
To your tips 3-5, I agree no one should go at an eviction alone without proper help, I don't claim to know all of the laws at all. Now having had to deal with two evictions processes I understand the courts better with having intimate knowledge of sitting in the courtroom listening to cases and how they are handled. In D.C. you go through mediation before going to trial, something I was more than capable of handling myself. I know now what to expect from an attorney and a management company. Learning from other's mistake shortens your time to success so take my mistakes as guides and do better than I did. I know one thing I have learned a lot I wouldn't change a thing about how I learned but will change some of my process based on my knowledge.
I would urge anyone out there no matter where you are to get with a group of people that's already doing this and really dive deep. You won't get all the answers and you'll still make mistakes. As they say Progress, not Perfection!
@Shadonna N. Originally I wasn't going to tell the tenants either that I was the owner and still not sure if I made the right decision or not but it has been working just fine. Either way, as long as you manage the building make the repairs, do your walkthroughs it shouldn't matter in my opinion.
I am responsive to my tenants they have told me about previous places they have lived and the conditions that they lived in. Let's just say it sounds really bad; my walkthroughs have always been great the place has been clean and in order, I have no complaints.
The D.C. people should meet up I will send you a pm with my info, look forward to talking to you soon.
@Jon Sheffield I didn't mean to insult you. It's nice that you're willing to share mistakes and successes with others. I wrote quickly and came off a little more gruff than intended. Here's my thoughts:
I eventually I told him I was a police officer and he told me that he had just been released from prison for murder. This didn't bother me and since then we have had a very good tenant landlord relationship.
1. The tenant didn't disclose his criminal past until you identified as a police officer which was at least three months after purchase. Did Seller know about his past and if so, why didn't they disclose it? Why did Tenant wait until after you identified as a police officer? I don't know any professional PM companies that will accept a violent criminal right out of prison so I wonder if he hid his past when originally moving in?
2. Recidivism rates are extremely high for people "just released from prison for murder". I don't think it's a good idea to place a violent criminal in close proximity to other renters without some evidence they're stable.
I'm also surprised you didn't discover his background on your own. Don't you run your tenants through your system at work? Or is that not allowed?
It sounds like you have a couple years under your belt and things worked out. I just wouldn't recommend it for anyone else, particularly a novice investor. Violent criminals, drug users, drug dealers, prostitutes, sex offenders, and many other criminals run a very high risk of offending again and I wouldn't want to expose my other tenants to that.