All Forum Posts by: Michael Jones

Stick to your screening policy. Not just to protect you from making the right decision with this tenant but to protect yourself from a discrimination lawsuit. If you allow her to count unreported income but do not allow someone in a protected class you are liable to be hit with a suit.

I prefer to always let me tenants roll to month to month lease after the first year is up just in case i ever have issues I can legally give them 30 day notice to move. 

what part of Virginia? I have  family down in Galax and Fries.

Your tenant is on a month to month lease so you can rewrite a new lease at any time and require them to sign and abide by the lease or if they refuse you can give them a 30 day notice that you are terminating the lease and they must move.

You are not in a precarious situation and it is very easy to fix everything without a lot of fear or work.

1. Put together a new lease.

2. Raise the rent by $50.00 in this new lease.

3. Rewrite your late fee policy. Make it a late fee of $50.00 if one day late and then $7.00 each day it is late after that. This will hurt if they are late and the pain will be the best teacher.

4. Do all of these changes through official letters since they will not meet with you and seem to be avoiding you. If they continue to avoid you you will have to send them a lease termination letter and make them move. Use this as the only option if they do not sign the new lease within say "5 business days".

I will assure you they know they have a good landlord, are getting a property at a great price and know that they should be paying rent on time but are choosing to not pay it.

They will not move because even with an increase they are getting a great deal.

Now, once you implement this new lease and late rent payment policy stick to it. Do not accept any rent payment without the entire late fee included. If they mail a check and it is only for the rent but no late fee's return it to them and immediately post the notice that they are late on rent and you will be filing an eviction if not paid within (whatever the law says for the number of days in West Virginia) number of days. They will test you because you have worked hard at proving you are a very nice person. 

You still will be a very nice person but this is not personal and you are only abiding by the lease as you and they agreed to.

You can do this and will learn from it. Don"t waste your money on a property manager for one SFR.

Bumping this thread back up. I have been busy with an acquisition but still would like to begin a small group meetup for buy and hold investors here is Louisville.

Maybe once every couple of weeks, somewhere central so folks from across the river or neighboring counties can join if they wish.

If you are interested and know of a place that everyone would be comfortable to meet please reply.

I am suggesting a weekday evening around 6:00 somewhere around new lu or the highlands where they have cold beverages.

This is a copy and paste from the lease I use:

1. REPAIRS, PEST CONTROL AND DAMAGES. Resident shall be responsible to furnish light bulbs for fixtures. Notice of needed repairs will be taken by phone, but can also be in writing. Any needed repair that is causing damage to the premises such as plumbing leaks, roof leaks, and any sort of moisture must be reported to the Lessor immediately. Resident shall be responsible for maintaining the cleanliness of the apartment and keeping the apartment pest free: however, Lessor may assist in arranging pest control treatments at the Resident’s expense.

Negligent Resident shall pay the cost to exterminate Resident’s apartment and adjoining apartments affected by migrating pest such as roaches, fleas, and bedbugs along with damages. 

Have you actually spoken to the tenants directly? I read where you state that the property manager is saying this but then I continue to read and see where the property manager is not returning your calls, charging you higher than normal fees etc......

It could be that one phone call directly to the tenants and they tell you that no one has asked them to make the place available and they would be happy to help. If this is the case, it will be a valuable call because you will know to get another pm before the next lease is signed.

on another note.....I would worry much about the deposit. If the home has been occupied for five years and they had pets the deposit is going to be swallowed up in needed repairs anyway. If not, they are some very unusual tenants.

What part of Kentucky? I live in Louisville and if you needed they help and can get me an appointment i would be glad to go by and inspect for you.

Find a duplex, triples or fourplex in the town where you live and purchase it now before you change careers. Purchase it through an FHA loan with 3.5% down.

Live in one unit and rent the other/others.

You should be able to live in the building and pay all mortgage, insurance, upkeep, repairs etc....out of the income that you generate from the other units if you self manage. 

That eliminates the $1,700 per month you are currently throwing to another landlord each month.

Then once you are settled and comfortable go purchase another four plex with the $100,000 to cover the down payment.

Each month bank the $1,700 you saved from your former rent payment along with profit from the four plex (lets say that amount is $1,400 which is $3,100 a month)

That is $37,500 per year going back into the bank. Every couple of years you will have enough cash built up to buy another four plex. That adds another $16,000 per year to your profit.

So in ten years that will be five buildings added to these original two. That is a grand total of $117,500 in profit. 

Here are the keys:

1. It is a retirement fund that you have to work. It is not a vacation fund or to help nephew Johnny cover the cost of rehab. Treat it just like a 401k and nothing can come out of the account except to cover the cost of managing the rental units.

2. Rents must be raised so you can capture the market value while your mortgages are fixed. This allows the spread on profit to become larger as the years go by.

3. Don't be afraid. there are thousands of people that will tell you not to do it because they have fears that drive their decision. Renters are not jerks that are going to destroy your investment and the person that tells you they are is the actual jerk.

There is nothing that can happen that hasn't happened to every other landlord somewhere and they survived. 

You will have to deal with a case of bedbugs, a tenant will overdose on heroine, a tenant will not pay and you'll have to evict, you will get a call that they have found mold, you will (insert what ever nightmare that person tells you about that drove them out of the rental business).

You know what, it is nothing you can not handle and each experience that you go through will teach you that as a landlord and investor you have the skills and mindset to be very successful and all of your fears and anxiety were just in the way.

when I first bought a fourplex I was scared to raise rents because I was afraid my tenants would move out. So I didn't raise rents. Guess what some of my tenants did? They moved out anyway. So I didn't help myself.

Now when I put an offer in on a new building and I see the rents are below market value I make the offer also include the current owner sending out rent increase letters before the close. Before I own the building the tenants already know an increase is coming. So far these increases have been $50.00 per unit. 

I have not had one tenant move because of an increase of $50.00 when I purchase a building. These tenants that are $100.00/$150.00/$200.00 below market rent know that they are getting a bargain and they are expecting the rent increase as soon as they hear new ownership has acquired the building.

And even after the increase they are still getting a tremendous bargain because they also are getting a landlord that fixes issues and takes care of the tenants.

We always give them 48 hours from the signing of the lease to move the utilities into their name. Here in Louisville, the local company (Louisville Gas and Electric) actually requires the landlord to verbally verify that the new tenant is a resident in the property. So, we tell the new tenant the day of signing that they have 48 hours to move the utilities into their name because they are scheduled to be turned off in 48 hours. (no, we do not really have them scheduled and would not turn off utilities as it is illegal)

So, in the first two days one of two things will happen:

1. We get a call verifying that the tenant lives there so the utilities can be placed into their name. Problem solved.

2. We do not get the call and this lets us know that they have not moved utilities and we inform the tenant that we are billing them back for all utilities and that they are currently in violation of their lease and send them a notice to quit. 

We have had 100% success in all utilities being transferred into the new tenants name prior to the end of the 48 hours.

Are you in Indiana? If so, please read the Indiana tenant laws. Domestic Violence victims have rights and one of the rights includes having the landlord change the locks at the landlords cost. Now, I am not a lawyer, so the fact that the aggressor is on the lease may complicate things. I would contact the housing authority in the community the property is in or contact a lawyer today.