All Forum Posts by: JD Martin

Good job - did they throw you off the platform after that? 

Welcome & glad to have you on board :) 

It sounds to me like you're already at market rates. You have a smaller house with no garage. You're renting for $1975 and houses with garages rent for $2000-2300. You also say that there are "more houses available and sometimes even something better and cheaper than our house".

Renters generally don't care about bigger lots. It sounds to me like you might be in a buyer's market, and you're going to run the risk of losing a good tenant who can rent something better than your house for cheaper. 

I'm generally not a fan of just leaving the rent as is but in your case here it sounds like that's exactly what you should do until/unless the market turns around. Most reasonable people won't leave a house they like for something cheaper if it's only marginally cheaper, but if you raise rents and there's plenty of supply out there for a lot cheaper you're going to have a vacancy. At $2k, a one month vacancy in order to get $2100 takes almost 2 years to recover from. 

I have two approaches when it comes to PITA tenants:

1. When the lease is up they get their walking papers. 

2. When the lease is up I raise the rent significantly to compensate for my aggravation.

Since I don't take any BS from any tenants whatsoever, 99% of the time if I find you a PITA tenant you are going to get option #1. That said, you have a couple of problems that go beyond the tenant:

1. You are far too intimately involved with this tenant. I have never had "conversations" with my tenants regarding lease responsibilities. If they are not abiding by something on the lease, I tell them, tell them how and when to correct it, and throw their *** out if they don't. 

2. Your overall approach to dealing with the tenant suggests you would be far better off with a property manager.

3. Some of your policies sound unreasonable and invite trouble. Hang nothing on the wall for the first year? 

Pay off the car loan first. You really should be in the black before you try to become an investor. You owe $17k on a depreciating asset. Get back to zero first and go from there.

Quote from @Victor N.:

Hi all, 

Just entered a contract for my first rental unit. A SFH priced at 252K, 4 beds, 2 bathrooms and 1 garage. About 1500 sqf and it's a new build. How much insurance should I buy for this? Any general parameters? Thanks!

As far as damage? Whatever you're comfortable with as far as deductible. I max out liability and keep everything under an umbrella policy because that's really where you want protection. Most insurers are going to either have actual cash value or replacement value; the latter is more expensive. 

Quote from @Sam Peterson:

A couple of other details about this situation… we know that the previous owners replaced the roof a couple of years back. I'm new to metal roofs and didn't realize that it was installed without sheathing or moisture barrier until I was working to address a small roof leak. What I thought could be an easy fix, turns out to be the entire roof that sweats on the underside of the entire roof when it's cold out. This translates to moist insulation, mold and a ceiling that sags ever so slightly between the trusses. I chalked this up to the humidity of the area and a seldom visited vacation property that the thermostat is set to a warmer temperature. I was very wrong. Additionally, as we peeled the drywall back in the master bedroom, we saw a date stamp on the back of the Sheetrock (2020). Under the Sheetrock was where the mold was, along with 2 other layers of plywood and paneling. Also, there are wire connections that look like rat's nests in between walls in the master bathroom. This area also is a part of a remodel that took place under the previous owners occupancy. I have documented all of this. I spoke with a lawyer yesterday. I was told that $1500 would generate a letter that goes out to all parties. 60 days would be provided to sort out a resolution. If no resolution is achieved, then we would have to start with a $5,000 retainer for litigation. I'm still on the fence on whether or not this is the best use of my time and resources. I'm not trying to go after these people for a ton of money, but it would be nice to dampen the blow. I'm just trying to navigate through this the best I can. This is our primary residence at the moment. We are building an ADU in the back of our shop so we have a place to sleep while we tear the house down. I'm sure there's someone out there that has dealt with real estate litigation and could provide some insight.

 If you have enough money to just tear this house down and build a new house, why on earth would you be worried about this? Suing doesn't make any sense to me. You stated that a copper pipe burst in January and that you had to open up all the walls to dry everything out, and that's when you started seeing things. You're going to have a hard time proving the mold didn't come from your burst pipe rather than something the previous owner did, and even if the previous owner did a remodel if they didn't know there was mold in there how are you proposing the court's going to hold them responsible? Same thing with termites. I'd almost guarantee there's a disclosure somewhere that the seller signed that they didn't know of any of these problems, so how are you going to prove they did know of the problems? It makes no difference if the roof was installed improperly such as it added to the problem, unless the owners knew there was mold in there. 

Again, though - if you're tearing the house down, why do you care? Are you claiming that you have to tear the entire house down because there's some mold in the wall and termite damage?

You've been a great and steady hand here at BP so it is certainly regretful to see you go, but best wishes on everything moving forward! Thanks for the shout out and for sure don't be a stranger around here! 

Quote from @Sam Peterson:

We took the keys to our new lake house in early December. Before closing, we were able to perform several inspections (General, foundation, septic and plumbing) Unfortunately, nothing was going to prepare us for what happened in January. During a freeze that rolled through Texas, we had a copper pipe freeze and burst. As we began the process of opening up the walls to dry the house out, we began finding black, mold, termites, and metal roofing that was installed without sheathing or moisture barrier. I feel like we were so laser focused on the foundation issues and septic issues that we were unable to see other important issues that were not glaringly obvious, but we’re also not highlighted in the general inspection. After telling our story to so many people, it seems that legal action is what most are suggesting and may be a good way forward to reduce the financial impact. I’m wondering if anyone has any advice on this scenario. Thank you in advance.

 Waste of time. You had an inspection and you bought it anyway. Unless you can prove the sellers knew there was black mold in the walls, termites, etc. you're not going to collect a dime. The inspector doesn't have to open up walls to see what's inside so you're not going to get anywhere there either. You should fix the problems and enjoy your lake house. 

Quote from @Jacky Johnson:

I have came across a property that is selling for about $300K and must be purchased with cash, and is sold for land value only. This entire property is two-story and has two units and a garage, and is considered to be a tear down. Lot size is around 6000 square foot and total square foot is about 1300. It's build near the 1950s with 2 beds and 2 baths. Utilities are on-site. The property type listed is vacant land. If I want to purchase this property as a investment property for renting and also for appreciation purposes. How do I know if this is a good deal? What do I need to do to make this property rentable? Thanks.

 Not too difficult really. Find comparable land values in that area, that are comparable in size to this lot, with like amenities (say electric/water/sewer already on the lot), and subtract the cost of demolishing and clearing the existing structures. Doesn't sound rentable unless you're going to build new on the property.