Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
Hello! I just moved into a new market and bought 3 low income doors.
1 Single Family flip in a D neighborhood that is just on the other side of an A neighborhood
1 Duplex that is 15 years old in a C area that is coming up.
It took me a month to put a tenant in the single family as everyone wanted section 8 and I knew nothing about that. I drove by yesterday and the tenant has sheets on the windows and a bunch of junk on the lawn. I left a voicemail asking her to remove the sheets and get cheap blinds and please get a storage unit for the junk. How much can I do and how much should I really care when her neighbors have pitbulls?
The duplex is already occupied. The right side has been there since it was built and is a bit of a horder. She's also selling candies and snacks to neighbors like it's a conveience store. Should I care?
What should I put in the letter to these new tenants (which I will also post on their doors) and should I think about getting rid of them or just leave them in there if they pay on time? Should I fix things in the duplex like cracked windows and bent mailboxes or just leave as is?
Lots of questions here. My first time dealing with anything less than an A property so I'm looking for advice! Thanks
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
8y
@Lucas Carl
I invest in the ghetto and I can tell you that you must learn to take these things in stride . It ain’t Beverly Hills bro ! people are going to be doing stupid things and they usually have no class or style in these areas . They are going to live the opposite of how you live and you need to learn to pick your battles in low income areas or your going to be mailing /postIng out notices every other day and you will give yourself a heart attack . When you pull up to your property and see something that boils your blood ( WhIch happens to me frequently BTW) you need to first ask yourself
A - is the tenant hurting my property???
B- is the tenant paying their rent on time each month ???
Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
8y
@Avery Carl
@Lucas carl
Don't listen to the troll.
I'm not in your market, I am in Jacksonville Florida but I have several "D" properties that perform exceptionally well and the answer to most of your questions is you don't do anything at all... As long as they are paying rent on time you let them do there thing. This is what happens with these types of tenants you wanna control it but you can't...
When they move out, you make the property look the best that you can, try to keep your costs down and move on to the next one...that's it..
These properties are cash flow generators and they do so quite well I might add. I would suggest keep buying more of them.
Raleigh, NC · Member since 2017 · 347 posts · 94 votes
8y
Am I the only one who is curious about how he makes 400-600 per month in cash flow in a D area? U can rent a decent apt for 600 in a nice area, what kind of rents are you getting to cash flow that?!
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
8y
@Chris Connolly
As an example it is typical in D areas to buy a multifamily trIplex or quad for 35-55k
Say you buy WITH a quad for 50 grand ( which is completely doable ) that rents for 500 bucks per unit , your insurance is around 500$ per year and taxes in these areas on a 3-4000 sq ft house is around 2,200 a year
Thats only 2700$ a year In total expenses but your making 24,000$ on the rents . 1,775 $ profit every 30 days . Even if you financed that 50 grand you’d still get about 1300 a month in profit . This is completely doable
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
@Lucas Carl
What did you honestly expect? Low income is brutal. You should avoid these types of rentals lol.
The people you think were trolls were giving decent advice.
I heard a story today from a co worker who had a friend who’s tenants let their dog poop in the basement and then covered it up with paint. That’s the sort of thing you can expect
@Caleb Heimsoth ok that’s completely rediculous. Read your post and ask yourself if you really believe that happened.
Besides the property I’m referring to is 3 blocks from 400k 3 bedrooms. No one is painting poop.
What’s ridiculous about that lol? He had photos. The owners never inspected the basement so it got bad. This is extreme but you’re gonna eventually have stories like this.
He probably meant to type "they painted the floor with poop".
Truth be told anything is possible with slum tenants.
I’m probably mis quoting the paint but he was very clear. They covered the poop with some sort of sealant.
Either way does it really matter lol?
@Luke Carl they did visit. They just didn’t inspect the basement.
Anyways you’re gonna have lots of issues. Lots of evictions and lots of damage. Good luck!
Says the guy who’s only experience in this arena is a friend of a friend that owns one house who may or may not have painted poop but we can’t be sure.
"They covered the poop with some sort of sealant."
I believe it 100%. Most are devoid of all normal social standards and would see no reason not to avoid having to pick up poop. If it isn't poop it is some other unacceptable behaviour. If they do not pay their rent they have zero redeeming qualities.
For the most part that is why they are where they are. They should be thankful that someone can manage them and make money off of them or they would have no place to live.
I invest in the ghetto and I can tell you that you must learn to take these things in stride . It ain’t Beverly Hills bro ! people are going to be doing stupid things and they usually have no class or style in these areas . They are going to live the opposite of how you live and you need to learn to pick your battles in low income areas or your going to be mailing /postIng out notices every other day and you will give yourself a heart attack . When you pull up to your property and see something that boils your blood ( WhIch happens to me frequently BTW) you need to first ask yourself
A - is the tenant hurting my property???
B- is the tenant paying their rent on time each month ???
Couldn’t have said it better. This is a business and a business we chose. I cannot tell people how to live. I can only give them a clean safe place. choosing to keep it that way is up to them. As long as the rent is paid and I fix what needs to be fixed. Move on the the next one. Good luck.
He probably meant to type "they painted the floor with poop".
Truth be told anything is possible with slum tenants.
I’m probably mis quoting the paint but he was very clear. They covered the poop with some sort of sealant.
Either way does it really matter lol?
@Luke Carl they did visit. They just didn’t inspect the basement.
Anyways you’re gonna have lots of issues. Lots of evictions and lots of damage. Good luck!
Says the guy who’s only experience in this arena is a friend of a friend that owns one house who may or may not have painted poop but we can’t be sure.
How much experience do you have with this stuff lol? I don’t care if you believe me or not. I’m just telling you what to expect
Lindenhurst, NY · Member since 2017 · 75 posts · 35 votes
8y
I believe you do the best with what you have. I also believe that many people who live in the ghetto are busting butt everyday if they're working. Set the standards. Many don't have experience with standards. Absolutely, provide the blinds. I also provide a doormat and explain the floors last longer if they wipe their feet before they come in. Hit and miss but it's always worth a try. I hope you get to say in a few years that your neighborhood has improved significantly. Keep your property up so you set the bar.
Contractor · IL · Member since 2018 · 20 posts · 46 votes
8y
Some of the comments in this thread are absolutely appalling. These are people. Everyone isn't afforded the same opportunities to be where you are at. @Luke Carl was asking about problems. Granted. He seems over his head, and should have done better research into the property/tenants he was investing in, but this isn't an excuse or a free for all to degrade and disrespect a group of people because of their income. The median income in America is $50k. How many Americans do you think have minimum wage jobs? A person working full-time all year at the federal minimum wage makes a mere $15k a year. They are working full-time, all year, yet still live at the poverty line. Too many people on this thread are talking about them as if they are animals.
@Luke Carl It should be standard practice to provide blinds to your tenants. This is your building, and if you want the appearance to have a certain look, then you are responsible for giving it that look. You said these are tenants that you acquired. That means you are also acquiring the habits/ rules/ standards of the previous landlord. They are doing what they have always done. Not because they don't know how to live other wise, or because they are "devoid of all normal standards", but likely because their previous landlord acted as many of these commentators have: as if they don't care about them (the tenant) or the property they are renting to them.
If the building is under new ownership then set your own rules and standards. Obviously, this is easier when you have the tenant sign a lease. In the mean time, show the tenants that you care about your property, and them, and I can bet they will reciprocate. Introduce yourself (if you haven't already) and let them know that though they have lived how they lived in the past, you aren't the previous landlord and your expectations are different. Inform the tenants of what your standards/ expectations are and how you intend to enforce them. I would also inform them that how you plan to manage the property and their problems will also be different. Let them know that when it comes time to renew their lease you expect your standards to be upheld or you will not renew their lease. Tenants in lower class neighborhoods prefer to stay in one place, as it is expensive to move. They don't want to leave or be evicted anymore than you want to evict them.
Don't let peoples ignorance deter you from a great financial opportunity. People in A class neighborhoods also do outrageous thing, they get evicted, they destroy properties, they can also be horror stories you will tell. So take the negative expectations with a grain of salt. I think @Jill F. had great suggestions. Make the place feel like a home to the tenants, and they will likely treat it as such.
"Everyone isn't afforded the same opportunities to be where you are at."
No one in the working class is afforded opportunities in life, we take the intuitive to go out and find them and work for them. The majority of those we are talking about choose not to do that. Their income level is likely a result of their social standards as opposed to the reverse.
Am I the only one who is curious about how he makes 400-600 per month in cash flow in a D area? U can rent a decent apt for 600 in a nice area, what kind of rents are you getting to cash flow that?!
Chris, show me a decent apartment for $600 in Raleigh, Cary, Durham or Chapel Hill. That unicorn has flown the coop, buddy. :)
Anyways you’re gonna have lots of issues. Lots of evictions and lots of damage. Good luck!
Untrue. That is one of the biggest myths foisted upon wannabe/inexperienced low-income landlords by inexperienced low-income investors.
An individual skilled in this category will not experience these sorts of problems (and others mentioned in this thread.) At least, not much more than investors who invest in other areas, because we all know problem tenants exist across the income spectrum. Screen properly, treat your tenants with respect, and set rules.
I wouldn't listen to a homeless guy who advised me on how to invest my money. And I wouldn't allow much credence in the advice given by someone inexperienced in managing low-income rentals when it comes to low-income rentals. Someone can be incredibly skilled at B-class rentals, but have asinine advice built on a foundation of ignorance regarding low-income rentals.
I've said it before and I'll say it again. Thousands (tens of thousands?) of investors across the country are successful renting in lower-income neighborhoods. It doesn't take some magical combination of a miracle landlord and a miracle tenant coming together to make an easy profitable process. It takes experience and a willingness to accept that not everyone fits into the image and experiences of a professionally-employed B-class investor/tenant.
Everyone, please stop providing false information built on 1st-hand ignorance. The OP is looking for honest, helpful advice, just like other posters who ask (and receive serious advice in return) about million-dollar syndication or $$300K renos. Hopefully people experienced in this area will offer some. Some people have offered jokes. Some experienced individuals have offered helpful advice. I hope the OP can wade through the garbage here and seize the helpful hints.
The SFH is easy--- if them having sheets on the windows bothers you--- buy some cheap blinds, and install them yourself. Heaven forbid someone wants privacy and for it to block the light/heat, and doesn't have the tools or knowledge how to install blinds! I hate seeing sheets/towels, it's trashy and brings the moral down IMO.. Wal-Mart sells SUPER cheap blinds ($4-$7), if you're going for the lowest possible.
Hoarding situation is a bit more complex. Is it just a lot of stuff.. if it's in the inside, unless your lease has clearly stated limits, I don't think you have a leg to stand on. You could request monthly check inspections, just to verify it's not infested by pests and they are taking care of the inside. If it's outside-- again-- what does your lease state? your lease is your only leg to stand on if it says what is/isn't allowed in the front yard. You can't impose your personal preferences on your tenants--unless it's agreed specifically in the lease.
Pit bulls-- just make sure your lease states no pit bulls or mixes, or whatever your insurance tells you that you can/can't allow. I'd strongly recommend requiring tenants to have renters insurance.
If you are self-managing, I'd suggest just a friendly conversation vs.a letter, you're setting the tone for hopefully a long-term tenant-landlord relationship. They aren't violating anything, sounds like they're paying on time. Also you chose these properties, and your chose your tenants, so realize you aren't in "A" land anymore, and people live differently, because budgets are very different.
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
8y
These were two books that were recommended to me to understand low income tenants (from another BP member). I haven't read yet, but they are on my list. Might be worth checking out to understand the type of tenant you are dealing with. Or have you thought about professional property management?
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
8y
I used to put up curtain rods in my rentals and found that people didn't have the money to buy curtains, so they just put up sheets. So then I put up curtains, and found that usually, they would just continue to use them and leave them when they moved out. I'd wash them and rehang them -- nothing to toss in the landfill like mini-blinds that always get destroyed.
Otherwise, you'll need to provide window coverings for lower-income tenants. When they move into a place and provide security deposit + first month's rent, that saps all the money they have. That's why in lower income areas, March and April are good times to find tenants because many are getting tax refunds back and have money to spend.