All Forum Posts by: Christopher Reeder

@Brian Warren

In my case, I have 2 tenants and their payments are different.  If I had tenants with the same amount, I would ask them to text me the receipt after the deposit to confirm the unit #.  My bank does not provide a simple way to track the deposits online by receipt image for counter deposits.

Welcome to BP Gary!  What type of investment property are you focusing on?  Our local market has a lot of opportunity, some more hidden than others.

My landlord hacks...

1. Paperless everything; electronic lease signing, electronic receipt filing

2. Rent collection software; I use Cozy and find it does what I need.  Haven't found the need to move into a more robust application yet.  

3. Provide deposit slips for the year to tenants who refuse online rent payment.  They can go to the local bank and make their deposit.  I receive notification when it is made and do not need to handle cash payments.

4. Calendly for scheduling property showing.  This is an app that allows prospects to schedule a time slot for viewing the property based on my team's availability that was preset.  Eliminates the back and forth of trying to find a common time to meet.

5. Keep an active ad for a unit even when you are at 100% occupancy. Build a waiting list of pre-screened prospects to reduce the time between tenants and maximize income.

6. For properties with common area utilities, reduce consumption with LED lighting, lighting on timers and reclaimed water for irrigation.  For tenant improvements, install low-flow shower heads and toilets.

Count me in.  Weekends or evenings are best times.

@Amy W. 

I have a tenant who has lived in a SFH for the last 8 years. They are similar to your tenant paying late fees the majority of the time during these 8 years. The rent was below market and the late fee didn't seem to make the tenant flinch when they paid the flat late fee per month.

This past renewal, I had decided to try a different tact with the tenant to have them pay on time.  I increased the rent just below a current market rate, $200 per month increase, and changed my late fee from a flat fee to a fee per day.  I also offered an ACH option for their payment.  The following month, the rent was paid on the 2nd with 1 day late fee.  That was the last late fee the tenant has paid as their payment is now scheduled on the 1st automatically.

In the end I traded late fees and the hassle of chasing the tenant for collection for $2,400 base rent increase and peace of mind with automating this tenants payment.  The base rent increase easily surpassed the late fees I was collecting.

My recommendation is automate your collection process and create a late fee that has more bite towards this tenant.

I in the middle of a 1920's SFH remodel and chose to refinish the hardwood floors. My contractor and I agreed to use a belt sander to cleanup the paint and other imperfections that were present. He didn't have the experience sanding floors and we didn't know the depth of the wood actually present. The floors appeared to be the original ones in the home. Yesterday I saw the first coat of poly on the floors and was highly impressed. 2 more coats to go to add a strong finish but well worth it in the end.

My contractor nor I had an idea of the cost this part of the project should take.  We agreed to T&M and it came out to ~$2 sq ft with material.  By the end of the week the floors will be ready and walkable.

I will always choose to keep hardwoods in my properties when I find them over carpet or laminate.

@James Kirby  I cross-list all of my rentals on Zillow and Cozy.  This covers 6 additional cross-listing websites and provides a wide array of visibility for my properties.  I receive a lot of passive inquiries and respond with a template email to each of them.  This email provides a list of qualifications and the process for application.

I allow prospective tenants to apply through either service, Zillow or Cozy.  My email template provides a link to the Cozy application because I use their service for rent collection and can flip an approved tenant directly into the payment system.  I require the potential adult occupant(s) to pay for the background and credit reports through either site.  This takes the hassle away from collecting contact information up front and puts the responsibility in the hands of the potential tenant.  If they are serious and feel they can meet my qualifications, they can do their part to move the process forward.

I do not charge any additional fees for reviewing the application.  I find the time spent going through the application is not significant.  Streamlining the process is my key driver to simplification.  Within 24 hours, credit and background reports are back and reviewed.  Tenants can receive an approval or denial after income verification.

Not all systems work for everyone, but I find my application system has generated high quality tenants that meet my standards.  Expectations are set at the beginning of the relationship and maintained throughout.

@Kory Knapp

I closed on a multifamily this month and provided 75-day notice of the new rates for all MTM tenants. I chose to move rates one time to within $25 of the market. Of the 8 MTM tenants, 3 have explained they are moving before the rate increases.

My Central FL market has a high rental demand. 2 units vacant at closing have been leased under my terms at my asking rates. This further supports my decision to move rates immediately, allow the tenants to make the full decision and move on with my reposition strategy.

Each landlord has a decision to make in this scenario. Remove emotion and think financially on how you planned to execute your financial strategy. The early you reposition, the earlier the property performs to your proforma expectations.

Chris

Investment Info:

Large multi-family (5+ units) buy & hold investment in Winter Haven.

Purchase price: $825,000
Cash invested: $67,000

17-unit mixed multi-family, multi-parcel portfolio. Portfolio consists of 1/2 block comprising 4 upstair/downstair duplexes, a single family home and 8-plex. Single family home is in the middle of a partial renovation at time of acquisition.

What made you interested in investing in this type of deal?

My wife and I made a decision to look for scale with our next acquisition after investing in small duplexes and SFR. We had a purchase price limit we could support and looked for properties that fit near that investment limit.

How did you find this deal and how did you negotiate it?

This property came up on the MLS on a Saturday morning. Each morning I review all new listings based on my search criteria. By 7:30am, I was on the phone to my agent crunching numbers to prepare an offer.

Negotiations were more subdued compared to my last acquisitions. Seller advertised the listing with a note offering seller financing. This was the perfect entry for us. I focused on the terms of the purchase more than the price itself.

How did you finance this deal?

Seller financing was accepted with 19% downpayment, 20 year amortization, 15 year balloon and 18 months interest only payments.

Majority of downpayment was funded through a family loan with similar terms to Seller financing.

How did you add value to the deal?

Having closed only last week, the plan for the property is to bring rents close to market value, complete the renovation of the SFR and make some small updates to the remaining units. Seller maintained the property in very good condition during their 23 years of ownership.

What was the outcome?

The outcome of the acquisition is a success. The projected outcome of the value-add financial benefits is too early to determine. I'll update after several months of ownership.

Lessons learned? Challenges?

During negotiations, Seller had a family death which took them away from the negotiating table. At several points, I thought we were moving further apart instead of closing the negotiation gap.

One lesson I learned was to ask the Seller why they needed to sell the property. This can be a difficult question for a Seller sometimes, but it can yield great information. In their case, they wanted the monthly income without the responsibility of being the landlord. Worked great for me.

In the Davenport area, 4 and 5 bedroom homes rent well as short-term rentals for vacationers.  This area draws a lot of foreigners too and the large bedroom count can accommodate multiple families traveling together for vacation.

A friend of mine who is an agent in the area has a few clients buying in Davenport for the short-term rental options.  I do not have anything myself as I focus on long-term multifamily properties.