All Forum Posts by: Chandra Yates

 Thank you for the offer, however, the work has already been done and the house is rent ready.  I will keep your information in the event this happens again.  However, the next time will result in sale ready instead of rent ready.

Hard living was the term used by our insurance company; entire house carpet had to be replaced (see image and imagine 1700 sq feet of that), walls & doors were used as children's personal canvas which resulted in repainting & staining of entire house, closet doors were off &/or damaged, siding was hanging off of the outside of the house in several places, thermostat removed, gas meter removed due to illegal gas consumption, drawer/door hardware missing or damaged, damage to garage doors, etc.

According to my "generic" management agreement, it stated that I could not terminate until "30 days prior to the commencement date of the renewal term" which was the date the lease expired. Thus the reason I didn't terminate sooner. The tenants had just signed a lease extension days before the sale.

Part of the problem, according to the attorney, was a lack of contract.  Without the contract, she stated there is no way to prove that inspections were required or if they could change the rental amount without my knowledge or permission or even if property manager #1 had to provide additional notice before the sale.  How could I possibly use the not having a contract to my advantage?

The new management company did the rehab.  They have so far been great.  I have been getting immediate responses to all of my communications & pictures. As I am in Wisconsin and the property is in Georgia, I have to rely on the management for everything.  This has certainly been an eye-opener.  I have 2 other properties in different states.  I have revisited both of those property management contracts as well as keeping a much closer eye on them and the properties.

So far, I am out the cost of the rehab, 4 months rent, and the improper rental amounts collected for 11 months which amounts to approximately $17,000.

I own an investment property (3 BR, 2 BA, SFH) in GA that was rented out in 2014 by our first contracted property manager. In 2015, I received a letter and an email on the same date that the management company had sold out effective the date of the letter & the email. Thus, no notice before the actual sale that it was even taking place. The contract had been acquired by property manager #2. At this time the same tenants are still renting having signed a lease extension until June 2016 with a rent increase from $1150 to $1200.

I noticed that the new management was collecting $100 less rent than the lease stated ($1100) but keeping their 10% management fee of $1150. I called to bring this to the attention of the new property manager, however, it never changed.  

I believed that I was stuck in this contract with this new management company until the lease expired.  When looking through my paperwork, I found that I had never been given an actual signed copy of the management agreement but only a generic contract presumably for me to read before signing the actual contract. I have contacted both management companies, as the first manager has since come back to the business.  Both companies cannot "find" the contract. I fired company #2 according to my "sample" management agreement and am now on the 3rd property management company.  

New management has evicted the tenant due to non-payment of rent.  Upon entering the property, evidence of "hard living" was found to the tune of $11,500 in damage to the house.  I have contacted both previous management companies for any and all paperwork regarding the property including inspections of which there was one; when the tenants moved in in 2014.  Management company #2 had never been in the property.

Although the tenants are at fault for the way they treated the property, it is my belief that the management did not exercise diligence through regular inspection. An attorney that I have spoken with has indicated that it would be hard to prove which management company was at fault and even harder to collect any judgment. 

Has anyone dealt with a situation such as this?  If court action is not an option, what is?

In January 2013, we purchased a SFH in SW MI for $145,000 w/ $21,750 down (LTV 85%), APR 4.375%. The house has been rented continuously since closing with rent at $1250. Our monthly cash flow has been $180.

We received our annual escrow analysis last month.  The non-homestead taxes have caught up to us.  The annual taxes have gone from $2190/yr to $3583, thus pushing our mortgage payment alone to $1300+/mo thus erasing all cash flow. Our tenant signed a new one year lease just days prior to receiving this news.

If we sold, comps show we could expect a sell price between $150k-$160k. We would not regain our down payment according to our calculations. Thus we have decided to refinance. The bank will only refinance to 75% LTV not the balance of the existing mortgage due to it being an investment property.

The new numbers look like this:

Loan amount $112,500, APR 4.25%, closing costs $12,145. New cash flow will be $187/mo. The total amount invested will go to $33,895, however, equity will increase.

It has been our plan to hold the property as a rental.  It is a solid house w/ no need for major maintenance (roof/windows, etc.) anytime within the next 5 years. 

Thoughts?