All Forum Posts by: Danielle Jackson

I guess my question would be with a 30-year tenant, perhaps you could (and still can) have a conversation with her if your goal was/is to keep her as a tenant (based on the condition of the property and her history as a tenant)? Giving someone a 90-day notice with a 87% rent increase is kind of a hard pill to swallow. What about tiering her rent? Yes, I get she has been given an incredible opportunity to live there well under market rent....but you have to factor in vacancy and turnover. It is a business and not a charity, but you have significant costs to turn it over given the condition you stated in your original post. That could easily eat into the difference in rent. 

What about 12 months at $600 and then $750 thereafter? This also gives her a chance to find something else, and you a chance to start marketing it at a future available date (should she not agree). 

If your goal is to get her out, renovate, and find a new tenant...I get that. But proposing a rent increase perhaps wasn't what you truly wanted. Instead, maybe what you wanted was just a 90-day notice. 

In my opinion, if you plan to live in the property and you can afford the 3% - there is no reason to partner. 

Even if you can cash flow more, you are still splitting the proceeds with a partner. How do the numbers pencil out on a property where you can afford the 3% vs. a more expensive asset with a partner? 

One counterpoint is if you are looking to start a long-term partnership and acquire larger properties over time. This is a great way to bring value to the table right out of the gate.

Otherwise, some partnerships can also bring headache. Just consider all options and take your time evaluating both scenarios and what makes the most financial sense for you...short and long term. 

Good luck! 

I couldn't agree more with the advice above. 

Ultimately you are paying someone to do one thing - manage a property - and while they can never force a tenant to pay, they should have processes in place to solve for this situation. You have tenants 120 days past due....how has your PM team suggested rectifying the situation given their recommendation to not move forward with evection?  End of the day, you shouldn't be the one working to determine a process that that you are paying someone else for. 

I would pose one question - how are you communicating/handling the past due tenant and ask for proof of the communication. Once you have that, then proceed with reviewing the agreement. At the end of the day, as the property owner, you should be able to override their decisions. I would ensure you have 100% clarity into the communication/process to date, to avoid any legal landmines based on communications they've sent. 

Good luck! 

Is splitting the parcel an option? I recognize that your family all lives in close proximity so thought they had maybe split the parcels before (bearing in mind some deeds have a limit on number of times you can split) - if an option, definitely worth looking into. 

Also, check into the local rules around DADU (detached accessory dwelling) - given the rule of 1 residence per 5 acres, some restrictions may be placed on allowing that to be an income producing dwelling. 

All that said, sounds like you have an incredible situation. To have land, in a location you love to live....thats a win in itself. 

All great advice. I 100% agree in going into your local zoning office to ask the appropriate questions. The key is looking someone in the eye when having these conversations. It will depend county to county on the rules/requirements. 

Also, a tip learned the hard way from a close friend, make sure you contact a land surveyor. Given you will have to create two separate legal descriptions, there is some language you will want to ensure is included. I don't know that exact language - but a surveyor would! 

Good luck. 

Thanks for sharing your process. Great tips for those who may be in a similar situation at some point in their investment journey. Most importantly, everyone is ok. 

Quick question - how do you handle any moving expenses? Recognizing some insurance companies will cover those - do you pay for them up front and then get reimbursed?

I think this is a case-by-case basis and determined by the underwriter. 

Having purchased using 2nd home loans, it was never a distance requirement, but rather the question of is it reasonable to assume its truly a 2nd home and not an investment property. 

Example: two same size homes, same city, both downtown versus one downtown and one lake home that could be just 20 miles away. 

Hi Jamal. Congrats on getting started on your journey! Have you tried the local REI groups? They can be a great help in building a network when looking at new markets.

Great property. Congrats. 

Do you complete a walk through pre move in and post move out? Do you still have the deposit? If the answer is yes to both of those questions you may have a case to have tenants pay for the infestation. My gut says if you didn't notice the cockroaches, and the new tenants did, you may not be completing the inspection in between tenants. If that is indeed true, it will most likely be a battle to prove their responsibility.