All Forum Posts by: Joe P.

@Dennis M. my thoughts as well...except they are in possession of an asset that I own. We are only 3 months into a year lease and there are bound to be additional maintenance needs, visits, etc., throughout the course of 9 months. I'd like to see that asset returned to me in proper condition. A $1400 security deposit can only cover so much -- if someone wants to cause damage if they feel they have been wronged, it can be worth a lot more than a SD and be far more troubling.

@Thomas S. what's strange is the son is so much more calm and collected than mom. He found the place, went through the screening process, is very communicative, understanding, and friendly. But is hard to ignore 50% of the people on the lease.

Hoping all of this blows over and they find the watch. 

$30,000 CAPEX reserves across 80 units? What are the condition(s) of these units?

A lot of people use 10% of rent for annual CAPEX reserves when buying typical properties -- now this is a large purchase and maybe doesn't apply. I'd also say those numbers are good, bad, or indifferent. It's either too small, too much, or just right, depending on what you've purchased and its condition.

But if your annual rent is 680,000, and you use the 10% rule, you'd be setting aside $68,000 a year. I think its low, and I think you'll uncover all kinds of problems that I'm sure were neglected, but amortized over several years that seems like a reasonable number to me.

Did I miss something or do you truly plan on walking forth with only 30k a year set aside across 80 units?

@Jer Yeung thanks for your input, I am definitely giving it some time. I was supposed to perform some more work but I already told the tenant I was canceling.

@Mary M. thanks for your input, I agree about letting cooler heads prevail. But I will under no circumstances replace her watch. I didn't steal it, my subs didn't steal it as far as I know, and with no proof there is no reason for me to give in and replace it. Then what happens when something else "disappears"? This is what leads me to believe that, assuming the watch is gone (I think it is...either she lost it or she's purposely misleading), how do you recover from it?

This was an interesting one. The heat at one of my units has been wonky -- its steam radiator heat with the old-school upright radiators, and some were giving off great heat and some were not. This particular unit has 3 people living in it -- a mother and her two sons. Mom only speaks Spanish, and mom and the eldest son (adult) are on the lease.

All week we've been trying some different things to solve the heating problem -- I was the only visitor to the house -- and today my plumbing/heating guy came by with his associate to flush the system. Only mom was home today, and she handed me the rent money in full as soon as I walked in the door. My guys get to work as we're up and down doing work, and then all the sudden we hear screaming and one of the guys tells us to come upstairs.

Mom (in Spanish) accused me, one of the workers, or someone that has worked for me, of stealing her watch. Mind you she's frantic and we're using google translate and the little bit of table Spanish we know to try and figure this out. She goes right to saying she's going to withhold it from the rent and continues to be near hysterical. I tell her in Spanish (thanks google!) that we're calling the police.

Thankfully the eldest son came home and translated, saying she's really upset (no kidding, we could tell) but he wants to look for the watch. Doesn't think we did anything and not sure why she's acting that way. I said we called the police since she believes there was a theft and we would be outside waiting.

The police come up and while we were waiting, apparently, mom DRIVES OFF (we didn't see it, probably too busy talking about how nutty this whole thing is) and the police officer grabs our information. Says since she isn't home...no victim, no crime, and she'll get us a report.

Mom magically comes home with her youngest son (I think she pulled him out of school) after the police leave and she won't even speak to me...just screaming at her kids to go inside. I spoke a little longer with the adult son, he seemed apologetic and said that they were going to look for the watch.

So I'm home now, and curious to know what my options are. Frankly I don't know how we can continue a relationship after being accused of a crime. How would mom and family be comfortable living in a home where she believes her landlord or landlord's sub are stealing, and how could I be comfortable knowing I may have a hostile tenant who thinks I or a sub are stealing from her? How do you recover? 

I'm thinking of telling them to clean up the place (not dirty, just prepare it for renting to someone else) and offering to mutually terminate the lease? I don't see a point in trying to mend this as she's either ghostly concerned her landlord is stealing, or is trying to pull a fast one on us.

I'm not sure if I'm overreacting, but how the heck could I move past this? They've been fine up to this point, rent is always on time, everyone was nice. The home itself has had issues that we've solved (quite a few in the beginning, but the house is new to us and so we're finding out problems as its being lived in...and solving them) but again, ultimately, my mind says how much worse will this get?

For those of you "need to screen better" folks -- this was the pick of the litter. Good credit, funds in hand, no prior evictions, glowing reports from previous landlord, verified employment with glowing reviews from management, etc.

@Kendall S Jones thanks for the response. I got there and its a bit strange...

It seems like we have two things happening -- one is no heat and the valve/nut under the valve are bone dry, or we have heat coming through and the nut under the valve is leaking. I can't seem to get it dry and give heat at the same time. When its wet, there is also steam coming out.

I tried adjusting with a wrench and couldn't, it looks pretty corroded so I'm wondering if that just needs to be replaced? All other units totally fine.

I attached a picture, you can see its wet, so its dripping from the nut below the valve. Very strange stuff and this radiator is in the middle of the chain, so to speak. All other rads are fine.

Hi all, hoping someone can help me. My upstairs unit heat is working great, except in one room (middle bedroom).

No heat was coming out of it when I got the property, but my heating guy flushed the system, bled the radiators, replaced the water tank for the furnace, and all was well. That was late October.

Fast forward to now, that same middle room radiator isn't working again! The heat is fine in all other rooms, and apparently its now leaking too!

I'm headed over to the unit to check it out. These are the old-style radiators, if that helps. Any thoughts would be helpful!

To Joe's point -- build VACANCY (and a reasonable amount) into your property evaluation. If you get the right tenant in quickly with no vacancy, then great -- money back in your pocket. If not, you've created a buffer for the vacancy until the right tenant comes along.

I am using far more conservative numbers for my property; I am self managing but usually do 10% for management, 10% for CAPEX, 8% for maintenance, 8% for vacancy; these are percentages of the gross monthly rent (for this property, its $1900 rent income per month). If your property makes only $500 rent per month, chances are you need to raise your CAPEX/maintenance/vacancy budgets. A $2000 roof could be installed in a $500 per month property, or a $2000 per month property, for example. Just because you don't make as rent doesn't mean the costs are not comparable. A water heater cost and labor will be $800 in both units...list goes on and on.

Also, make sure you eval the property's current CAPEX state. I see I made a major deficiency in purchasing my current property with the age of the key items, e.g. gas furnaces, water heaters, washer/dryers, refrigerators, stoves, plumbing, electrical, etc. You need to try and guess the age or get the age and make conservative assumptions as to their replacement, or assume you need replacements right away and account for it in the purchase.

I'm two months into my purchase and both my maintenance and CAPEX budgets have 10% remaining for the rest of the year. Most likely my even conservative estimates were not conservative enough. You may want to consider a slider where you have to account for a high count of CAPEX/maintenance in YR1 to handle a majority of the issues, or go back to your seller and say the age of X is Y, and needs to be replaced, and it'll cost Z, so you'll take $ off to pay for it.

Other costs to bear - township/city costs (licenses, inspections, COs, registrations, etc.), common electric, water/sewer, garbage fees, tolls/gas/mileage, your time, HOA, etc. If these seem like overkill, just wait until your saddled with a $150 registration renewal you weren't aware of, and see what those types of things do to your cash flow. I'd rather know where every dollar will end up beforehand than guess and be surprised down the line.

Have you tried Gloucester City multi's? If you can make the numbers work there could be deals there. I just purchased one in August and its performing decently, minus some deferred maintenance the previous owner didn't make.

@Karl B. and @Nathan Gesner - just wanted to thank you guys for your help. I had a couple of basement guys come in and offer to put in french drains, one guy was $2000 for a small section, another guy was $6750 to do 75% of the basement.

I thought it best for me to try the hydraulic cement route first. Went to Lowes, picked up a trowel, and a big bucket, and a few cups for 20 bucks. Mixed it up, went to down on a big section -- kind of odd to put on and hard to make even, but it seemed to have settled well, and I covered about 30 feet of a seal between wall and floor.

Last night, we had severe rains from Hurricane Michael in the Philly area -- it was pouring most of the evening with severe thunderstorms. I did nothing but fret the whole night, thinking about the amount of water I'd walk into today. I got there this afternoon -- 99% DRY! There's a little bit of water near the rear of the building, but its just wet, no puddles, no major issues. I can probably use some hydraulic cement on the exterior where I think its getting in.

Can't thank you guys enough - it wasn't tremendously fun mixing and trying to roll that stuff into a tight area, but it was all worth it to walk in to a completely dry basement today. I've been randomly pumping my fist over the past 2 hours when I think about it. :D