All Forum Posts by: John Sanderson

Hey everyone, I searched around and couldn't find anything about this ( I may have missed something), but if you have multiple applicants, do you process all of them at the same time, or process them one at a time and stop at the first qualified tenant?

And my main question is, if you process them one at a time, what do you do with unprocessed applications that you collected a fee for? Do you try to return the fee to the prospect or do you pocket it? Pocketing it sounds shady at best, and illegal at worst for an unprocessed application.

Any insight is appreciated, thanks in advance!

One thing to add to what @Dale Walker said, before giving Notice to Quit(if it comes to that) or informing them you won't be renewing their lease, be sure to read the current lease thoroughly, as well as Michigan's(if that's where the property is) Landlord Tenant laws. If the lease is solid, it will most likely have a clause stating how much notice you're required to give the current tenant before termination of their lease, and what the required notice is for tenants without a lease.

For tenants without a lease, most states consider it a M2M lease, and you're usually required to give either 30 or 60 day notice, but again, read the Landlord Tenant laws.

If they like living where they are, and they're going to be good tenants in the future, you probably won't have any issues after letting them know they'll need to apply for and sign a lease. 

I'm all for using leverage when buying properties, but I see where you're coming from. If you're unsure as to whether you've got the right numbers on a property, in my opinion, you've got 2 options.

1.) Partner with a more experienced investor, if you can. They can help you go over your numbers, make sure they're correct and work for the property in question, help you with any rehabbing that's needed, and ultimately lower your risk significantly. I can't speak for everyone, but I know if someone came to me with money to invest and offered me an equity share in a property just for guidance, I'd be more than happy to accommodate them.

2.) Use leverage, but put down more than the required down-payment, probably somewhere in the ballpark of 30-50%, depending on your risk tolerance and how sure you are of your numbers. This way you're not 100% into the property, but you're holding costs during rehab will be lower and more manageable than if you were leverage at closer to 80%.

I'd also like to add this is from a BRRRR standpoint, and not a flipper's perspective. I haven't done any flips, but depending on what your relationship is with private money or hard money lenders in your area, it may be easy to break into flipping using your own cash, and once you've done a deal or two, you'll be able to bring that to the table when approaching a PML or HML.

They're both inherited tenants and I haven't had issues with them before. You shouldn't assume, but thank you for your input.

Hi Everyone,

I've got a tenant in an apartment building who has recently started complaining that the tenant above him is being extremely loud at all hours of the night (1, 2, 3 AM). He complained the upstairs tenant is stomping around, moving furniture, and having yelling matches with his girlfriend. I called the upstairs tenant to inform him that he needs to be quiet after 11 PM, and if he does get into an argument with his girlfriend, they need to take it outside or somewhere else.

After doing this twice, I asked the downstairs tenant to record the upstairs tenant's stomping and yelling, as the next step is to give him notice to comply with the rules of the building. The downstairs tenant told me he didn't want any legal trouble, just to have the upstairs tenant be quiet. I told him I'm not going to put up with someone breaking the rules, so if I'm going to serve a notice, I need some type of evidence, rather than just "he said, she said".

Fast forward to 2 nights ago, the upstairs tenant was apparently being loud, the downstairs tenant went up and they argued for a time and I received texts from both tenants, with the door frame eventually being damaged. I called both tenants to get their sides of the story, both telling me opposite stories. The downstairs tenant then told me that he couldn't record the upstairs tenant being loud, as his phone wouldn't be able to pick it up.

My thinking here is that the downstairs tenant just doesn't like the upstairs tenant and wants him out, as any cell-phone today would be able to pick up loud stomping or a screaming match if it's keeping my downstairs tenants awake.

So, short story long, I examined the damage to the door frame and concluded it was caused by the downstairs tenant pounding on the door and am planning on sending him a bill for the damage. Are there any other suggestions as to what I should do in this situation? I think it's reasonable to require evidence if I'm planning on possibly kicking someone out for non-compliance. If I rambled a bit or you need more information, let me know and I'll provide it ASAP.

Thanks Everyone

I can't say I know a whole lot about HVAC systems in particular, but if you know your system is being phased out and also has a leak, that means any future repairs are just going to cost more. If you're aware of a leak now, it's only going to get worse over time, and it'll just eat into your bottom line. I'd say bite the bullet now, replace the system(preferably with some type of warranty) and then be able to rest easy knowing you won't have any high repair costs in the next few years.

Plus, as @Seth Borman pointed out, if the system goes down during a heat wave, you're going to have to pay a premium to get it fixed quickly.

If all the carpet was installed 10 years ago, it's unlikely you'd be able to charge the tenant for it. According to the IRS, carpet depreciates in value over a 5 year period. I don't have a link handy, but I know there's a list of average lifespans for CapEx somewhere, and I believe, for investors purposes, the average lifespan is 8 years for carpet.

If the carpet was in great condition on move in from the tenants, and they were there less than a year, you may be able to charge them a percentage, but I wouldn't hold my breath on that.

I'm gonna have to go with the general consensus here, I wouldn't put the fence in. It's not a repair, it's an upgrade(for the current tenant only, although possibly for future tenants). If the tenant was willing to take an increase in rent or to split the cost with you, I'd say probably do it as long as they're a great tenant. That being said, it sounds like you don't have a great tenant on your hands, just an OK one at best.

I will add this, if you plan on keeping the property pet friendly for increased rent(and costs to you, generally) I'd say go ahead and install it. A lot of pet owners will gladly pay more in rent to be able to keep their pets, and a fenced in yard will probably help you attract higher quality tenants. So, if you can, try to get this tenant to help you pay for the upgrade, if in fact you do plan on keeping the unit pet-friendly.

@Thomas S. as well.

To start off, I'd like to say I'm going to continue paying utilities even during the eviction process. That being said, here's my question:

I have a tenant that I'm currently in the process of evicting. Their rent includes all utilities, including electric, water, sewer... Only the electric is metered separately for their unit, so, if I were to stop paying their electric bill since I haven't received any rent from them, would this be detrimental to the eviction process? My reasoning being that utilities are included in the rent, so for all intents and purposes they are not paying for electric service. 

If this falls into the realm of legal advice, I apologize, however, I'm only looking to get some insight as to what others may think about this subject.

Thanks!