All Forum Posts by: Joe Splitrock

You can use your tax returns to verify income. Using a credit card is a bad idea starting out. I would recommend you save up cash or start out with something less cash intensive.

You really need to get a quote for this because it depends on several factors:

- Location code requirements and local rates

- Age of home and location of boxes

- Are there two separate electrical panels or does a panel need to be added? It becomes a major issue if there is only one panel. Two panels is not so bad.

- Common areas and how to handle that. Some duplex don't really have common areas, but if you do then you need to figure out how to meter that power. If it is something like an outside outlet, you may be able to assign it to one tenant or the other. If it was a laundry room, you are probably stuck putting it on a third meter. Avoid a 3rd meter if possible.

I would highly recommend splitting this if you can. Even if it costs several thousand dollars, it could eliminate headaches down the road. For example when one tenant runs their air conditioner like crazy and runs the bill up for the other tenant. You will be stuck in the middle. It is worth $4K to avoid that, trust me!

Originally posted by @Robert White:

A second idea is that it may be better to offer them a better "buyout" rather than risk the delay and potential legal costs.  What you may realize is the potential costs may be as high as $1,000 in legal fees, plus ($1,300 - 695) $605 in lost rent per month for up to 3 months, PER APARTMENT.  This could amount to $2,800 per unit.  On top of that, they may stop paying rents.

So, you may be wiser to immediately serve them the (no-cause) foreclosure notice, and then offer them $2,000 to move tomorrow, with a reduction of $50/day for each day they delay after that.  That is a big carrot, but the offset is that they have already been pushed further down the eviction process quicker if they decide to stay put.

I really like this suggestion. This could be the fastest way to get them out and could really help them because it puts money in their pocket for the next place they need to move into. There is no reason to offer a rent increase option because even if one of them could afford that huge increase, then you are stuck with only 3 vacant units to renovate. You want to renovate everything at the same time to keep costs down and minimize interruptions to other tenants (vacancy means no tenants to disrupt). 

Originally posted by @Sarah Ziehr:

I agree that a lot of agents/brokers are terrible. I should know, because I work with them every day. Something like 50% of them won't even be in the business in 2 years from now, and another big % might do 1 deal a year. 

As a sellers agent, the home may be a slam dunk as you say- but what if the buyers agent is a total nightmare or a noob? Then I'm stuck doing double time, working on them to get everyone to the finish line.   

Add to this, my hard working agent gets calls on a Friday night when he is out to dinner with his wife. He works all weekend long. He has to "sell" my low offer as a good deal to the buyers agent in a hot market, because believe it or not a good realtor can deliver an offer with better success than a bad realtor! Even the relationship the buyers agent has to the sellers agent makes a difference. 

Consider these two ideas about how a real estate market works:

1. If a home sold itself, the market would move away from agents. There are many examples of industries that have changed and moved towards a different sales model. If agents had no value, their pay would decease or an alternate sales model would replace them. 

2. If it is true that an agent just makes tons of money for doing nothing, everyone would move into the profession. As Sarah pointed out, a large percentage of people who become agents fail. That supports the fact that it is not as easy as it looks. 

In the posters original example, the first deal he did the agent probably did more work than he got paid for. The second deal, maybe they got more paid more then the work they did. They are not paid for the difficulty of each deal, so it has to average out. 

@Diamond CampbellI think that @Chris Masonexplained it well. Let me just add... You could easily ask the question, what does an electrician do that I couldn't do? What does a plumber do that I couldn't do? What does a lawyer do that I couldn't do? What does my hair stylist do that I couldn't do?

The answer is specialization in a field. They go through training and have experience. You can do any of the above things. I am confident with training and experience you could do it as well as a professional. You just have to ask yourself what is the best use of your time? I would also caution you to not oversimplify a job and get yourself in trouble due to lack of experience.

Originally posted by @Robert Andrade:

I asked a similar question recently and the bulk of responses were that it should be a red flag.
My Q: would be, what is the relationship between the tenants and current owner? Why are they being so uncooperative?

A better question is what benefit does a tenant get? If they have a great relationship with their landlord and are happy, what possible good could come from the property being sold? Everyone just looks at it from the owners or buyers perspective. Human nature is to look at the negatives. Here is a list of good an bad from tenants perspective:

Bad:

People walk through my home, don't take shoes off and track dirt and mud on my carpet. I had this happen!

Someone looks through my private property during a showing.

Someone steals my belongings during a showing.

The new landlord raises rent. Happens all the time, people on BP almost brag about it.

The new landlord kicks me out because he has a friend he wants to move in.

The new landlord is unresponsive when there are problems.

The new landlord will not be understanding if I am late on rent from time to time - current landlord may be more forgiving.

The new landlord will show up at my property without notice and go through my belongings. 

The new landlord will reduce renting standards giving me bad neighbors.

Good:

One idea for owners trying to sell would be to offer your tenants a reduced rent for their cooperation during selling. Each mount you have it for sale you give them XX% off rent in exchange for their cooperation with showings. 

Alternately you could offer them all a bonus once you sell the property. For example you give them each a half months rent when it sells. This motivates them to keep the property clean and cooperate on showings. 

@Kaleb CarstenI manage myself, but there are several companies in town doing property management. It is going to cost you around 10% off the top plus they usually have renting fees. I have never worked with Real Property Management, but on the plus side for them they lay everything out on their website. Others you may need to call to get details. You want to understand fees and the corresponding service. There can be both landlord and tenant fees. For example Real Property Management charges a $200 fee to the tenant to write a lease on top of $49 per applicant. This is on top of rental fees and management fees that you pay. For some there could be other fees like inspection fees or maintenance call fees, etc. All fees cut into either your profit or result in a higher expense for your tenant. Make a list of what is important to you. Also consider that property management can be used for renting only if you prefer to manage yourself. Renting is the most time consuming aspect of property management.

I have talked to local applicants that have bad experiences with property management companies. This could prevent a good applicant from looking at your property if the management company is not viewed positive. 

Just curious why you have made the decision to not manage yourself?

I am not sure your tenant should pay or that your insurance will ask them to. The cause is key, but I assume it was a kitchen fire the tenant started by mistake. Insurance covers this minus deductible, which maybe your tenant will pay for you? Is the property livable? If not lost rents could be a harder hit for you.

@Roger Pokornyasking them to provide information, then verifying is part of the process. You want to see that they are truthful on their application. Even if you can see information on the credit report, you want them to declare it to you so you can verify. I have caught people neglecting to mention an address they lived at - obvious cover up of bad situation. 

It is true, someone may not want to disclose information and you have to be ready to say - I cannot process without it, sorry. I just had a guy that didn't want to give me his social security number and I told him there is no way to rent to him without it. Either he was covering something up or he was paranoid. Either way, it doesn't work for me.

@Brit Fosheeplease tell me you kept the palm tree wall paper with monkeys on it in the hallway.