Losing faith in real estate - eviction, repairs, PM disaster

10 Replies

Looking for rehabber in Indianapolis for help!   I have a bad eviction with lots of damage in my Indy home.

I'm going through 3 evictions in the last 3 months

#1 Chicago property 5bed/2ba, 2000sqft with about $4200 in repairs  - $3000 just for interior painting

#2 Indianapolis 4bed/2.5 ba, 1550 sqft home with estimates of $5000 by first property management and then I switched property management to find estimate balloon to $12,000+ for similar repairs.   Biggest cost is $4080 for interior pain on a 1550 sqft home

Paint job - old PM $1700,  current PM $4000+

replace window blinds - old PM $108, current PM $270

every comparison is the same, price is nearly double on every item with the new PM I just switched over to.

Does anyone have a recommendation for home flipper or rehab guy or general contractor who can make this disaster into something more reasonable?

thank you,

joe 

Wow... first of all your PM is either really crappy or your properties in Indiana are in a bad neighborhood.  I have 10 rentals for the past 4 years and never had to evict a single tenant.  The most damage I had was a few thousand by one tenant, but that was a one off.  I have never dealt with a PM but suspect that is probably your problem.  Regarding the cost to paint, that sounds way over priced.  Call around and find your own painter.  Even for California that would be on the high side.

Sounds like your PM is placing crappy tenants. Switch to a different company, or start doing the placement yourself.

@Joe Kim   Sounds like your painting price is high unless there is a ton of drywall repair and prep work included.  I work with an investor-friendly GC who understands the game and I'm sure would be more than happy to look at the project.  Feel free to PM me if you are interested in a second opinion.  Cheers Tony.  

Sounds like you have lost control of the property. Your property manager is taking advantage of you because you are out of town. I would go personally to the property and assess it yourself. Check with the local REIA and get some input from the locals. Why so many evictions? Are the renters vetted? Sounds like the property manager is skimming as well. I wish you the best but take charge and be serious or you will lose it all. You got this.

Well 3 evictions in 3 months = bad neighborhood (deal killer) or world's most incompetent pm. Likely both.

I would think long and hard about whether these are worth holding onto or if you're engaging in the sunk cost fallacy. If they're not worth holding on to, now is not the worst time to sell a house.

Sam Barrow, Real Estate Agent
202-415-9800

It's all about boots on the ground in long distance landlording. Been (and still am a little) where you are. Property managers make or break you.

Would you buy these today? If not, sell. Same for anything.

Do they fit in long term goals? Then we have to suck it up and make the best of it.

Property management is a lousy job. Who knows if the 1st guy was underestimating or the 2nd guy is trying to make some money off the CA investor.

Work the local RE boards here. Make some contacts with fellow investors. They'll have better leads. BTW 4000 to paint 1550 feet is 1/2 price compared to where we live!

I have a guy in Gary, but both Chi and Indy are too far. Good luck.

@Joe Kim I usually see paint on a standard home cost from $1.25-$1.50/sq ft unless there is tons of drywall repair, high ceilings, difficult stairwells, or things like that. Another things to consider is this though... there have been many times that I have inspected a home that we have taken over management from another PM or a recently purchased property and the previous painter painted over nails, screws, hangers, etc. The walls were not properly prepped, drywall repairs were very obvious because they weren't primed, etc. There is a BIG difference between a bad paint job and a good one. I don't expect perfection for the prices we pay on our rentals, but I will pay a little more to ensure quality work.

$12,000 seems enormous for a home of that size, even with new carpets, paint, and even some damages. You can do quite a bit for $12,000. A sizeable make-ready (without larger repairs like water damage, roof issues, etc.) is usually around $3-4/sq ft which will usually cover carpets, paint, drywall repairs, a few upgrades, etc. I have seen them cost double that, but you are starting to get in to rehab repairs at that level.

I've got a couple of GC's that I could refer to you to get a second opinion. They both specialize in rental properties and would probably be a good fit for you. Shoot me a PM and I can put you in touch with one of them.

@Joe Kim did you buy these properties through Morris invest? What type of neighborhood are they in? I don’t invest in Indianapolis but unless your tenants are trashing your property, I’ve seen typically 1-2k for a single family home turnover

Originally posted by @Ryan D. :

Sounds like your PM is placing crappy tenants. Switch to a different company, or start doing the placement yourself.

 It could very well be that these properties are just in bad neighborhoods where they can never get good tenants. It's always easy to blame the PM for placing lousy tenants but no matter how great a PM is, they can't make good tenants want to live in the hood. There are numerous similar threads on this in Indianapolis and it is all due to cheap properties in bad areas. 

 Some low income neighborhoods are to far gone to place good tenants but not all low income are that bad. If  you PM me the address I am happy to offer my option on if it could be turned around with a Section 8 tenant.  I do agree that the paining cost is very high and unreasonable. 

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