All Forum Posts by: Account Closed

A rather scary incident today at one of my units. A neighbor came up to me while I was inspecting another unit and was concerned about the noise coming from a different unit. We knocked on the door and a 12 year old answered told us that there were 4 children in the unit, the oldest was 13 and they had been left alone for more than 6 hours.

We did not enter the unit, but it was clear that this is a bad situation that is too dangerous to ignore.

As there is no law regarding minimum age of unattended minors in this area, it seems to be a grey area.

The tenants are new and under a short-term lease. When asked about the minors being alone, they felt there was nothing wrong with the situation.

I am considering informing them that the lease will not be renewed, waiving all penalties for an early lease termination, and offering them a cash incentive to leave early on a sliding scale with the highest offer for ASAP.

Any thoughts?

Update...

Well, it appears that doing some prep work, minor repairs, painting in and out, and putting on a new roof have had their desired effect..

After listing a few days ago on one of the cheap MLS/Syndication listing sites, I did four showings over a couple of days and have received 2 offers.

One is the asking price and one for 6% above. Both offers have checked out, as analyzed by a broker (friend) and an attorney, as highly acceptable with solid financing verified and caveats of offers acceptable.

Onto closing and then next decisions ..

Thanks for all the input. Lots to research and think about.

The Property Management option is a no-go. 

Been there, done that. 

It is not completely the managers fault, but it is a relationship that is not really conducive to an owners advantage other than as a temporary fix.

Have had a more than a few managers over my working years and it was pretty much the same, high turnover (the chase of the 1 months leasing fee the culprit I would guess), high turnover costs (clean-up, prep, leasing costs, repairs), lax oversight (unauthorized tenants, property damage, etc.), bad tenant selection, (too low income, groups of unrelated adults, unauthorized pets, etc.).

Every time I changed managers, most of my tenants disappeared within a couple of months from the changeover. Curious..

There was a time when I was working and had no choice, thousands of miles away, but once I took it over myself, my turnover rates, maintenance costs, and number of problem tenants all plummeted dramatically and, of course, the money from the greatly reduced running costs could go back into the upkeep of the properties and all that that brought.

I know it is not an easy business and hard to cover costs for the managers, but it is no picnic for the owners, and I have no interest in getting on that merry-go-round again. I think that of all the options that is the last option I would ever choose.

I know I cannot avoid the tax man, just want to minimize the bite. Rolling them out over years and using whatever tax shelters I can seems the best option, but maybe there is an alternative.

I might talk to a couple of wholesalers/commercial broker, but my gut is screaming that I will just be paying a high spread for the convenience of not having to handle the properties individually by having them take them over and do the same thing I would have to do to unwind them individually, otherwise, why would they do it. The tax bill would be higher than I would like as well.  But I am open to listen, if not a bit skeptical.

Owner financing also seems a no-go. Trading one stress for another is not what I want, I want out cleanly and finally. Selling the paper again for some spread would not be my first choice and my accountant tells me it is harder to evict a non-paying financed owner than a straight tenant. Have to study the lease option more to fully see the pluses and minuses.

But thanks to all for the pointers..

The new listing on MLS goes live today or tomorrow along some other supported sites and will update how this proceeds while I study some of these other options..

Cheers

Thanks for the reply.

The paperwork on this one is done. Will see how this goes for a few weeks/a month and then maybe adjust. Do not want to go the wholesale route if it is disruptive, some of my tenants have been with me 10 years+, one 16 years. Most are under the market in rent and really do not want to have to move or have to deal with the steep rent rise from a sale that allows them to stay. That said, they all also understand it is time for me to stop. Have spoken with all of them and given them the option to buy but with the clock ticking and somewhat of a time limit.

If someone accepts, then that will be the first place sold and the others get more time, it would work for all of us with minimal sales costs. If no-one does, then I have to make the hard decision on which one is next to go. I know it sounds weird but after all these years, most have somewhat become family as the relationships are good, so I would like to be minimally disruptive if I can.

I also need to limit the yearly number of units , or depreciation recapture and capital gains,  for tax reasons.

At least, that is the plan for now.

After 40 years or so, it is time to let the rentals go .. 

Have collected rentals over my working life and managed them myself( since retiring 20+ years ago), and am finding it more and more difficult to keep up with the maintenance, management, and tenant selection process as the body is not as agile as it once was and either is my patience. 

Time to accept that the knees and body are shot and retire to my wood shop and VR headset.

Sold my first one last year to the current tenant without a broker on either side and it worked out well for each of us.

My second one is up for sale now, tenant wasn't interested.

Tried a broker and that was not a great experience, he listed it on MLS and never once did a showing or visited it after the initial contact, I had to meet all appointments and do the walk throughs and sales pitch.

So I figured why do I need him if I have to do the work and let them go, read fired, and am listing it on one of the discount MLS services. I will continue to show it myself and try to cut out the lister broker fee.

Will still pay the buyers broker fee, but saving a couple of percent helps offset some of the  prep costs. 

Did a full paint inside and out and putting on a new roof in prep for sale for this one. Most of the outside work was contracted out, sigh.. getting too old for the ladder work.

Was wondering what others are doing in this situation to minimize the unwind costs ..