All Forum Posts by: J. Martin

Hi Darieal , and welcome to BP! I’m a ‘fix and hold’ investor from the Bay Area in CA, and loving it! But you’ll find a variety of every type of investor on the site, and everyone is amazingly helpful. Some pointers for you: The "Learn" link across the top navigation bar has lots of great info, and so do BP members! You can click on the ‘vote’ button if you like someone's post or is helpful, and there are ‘awards’ to earn on your profile. And you can tag people by typing @ before you type their name, then clicking their name at the bottom of the message box. Welcome to the site, and good luck in everything!

@Marcia Maynard ,

Maybe it's just me, but you have a beautiful, radiant smile - and look like a wonderfully positive person! The kind of people I love running into! Keep it up! But on the other hand, don't let tenants get the mistaken impression that you will have so much sympathy, as to not enforce the rental contract.. (not implying that's what happened here.. sounds like maybe some bad luck, or constant job turnover..) But just my 2 cents, since I'm pretty nice to my tenants too..

@Marcia Maynard ,

Thanks for sharing. From what I understand, if they can ultimately charge you for unpaid utilities, they will typically tell you about unpaid balances if they exist - if you ask them.

It looks like you are very perceptive about picking up on little clues. I think you might just need to be more honest with yourself about what you know and what you feel - then ACT on it. Last time I had those same uneasy feelings before move-in as you describe, I made the same mistake, and ended up with a short tenancy. But I charged 2 months deposit because I practically knew something would happen. So I didn't lose a dime on it and rented it out with 1 day vacancy because it was clean and worked with them to do showings before they moved. Got lucky that time.

But trust your observations, and if your tenant pool has issues, get something to mitigate that, to the extent possible. You'd be surprised how people can come up with a deposit when it's required. Or let them pay extra deposit over a month over the next few months..

Congrats! And great rate! (if it's fixed.)

Consider buying a 4plex with an FHA loan for the next one if you're low in cash after this one. Also, if you plan on buying a washer and dryer for your unit and installing plumbing if it not there, consider spending that cash on a small coin-op laundry add-on area to the building. A little extra income, and a nice amenity for renters in the future..

Congrats! And good luck!

Also, take into consideration how close your current rent is to market, and what the rental market is like there. The higher above market, the more the concessions are justified. If below market, maybe nothing is justified. If the rental market is tight and rents are up, it might not hurt to remind them of that either.. Some tenants will stay long-term for a fair deal and a good landlord, so don't feel like you have to give up thousands of income on every unit every year just to keep people.. but strike that balance relative to the market...

@Blake C. , I would consider ways to not lose income first.

I considered this when my first leases were coming up. However, I had received 2 month deposits (1 month is market) - so I offered some of the deposit back.. I figured for $50/mo, I might as well take that as income, and I can use it to replace the deposit money if I can't get it from the remaining deposit or tenants. Of course, you still want them to have some skin in the game.

But if you're going to give up $100/mo, or $1200 for the year, why not give back $500ish in deposit, which might help them out after xmas? (if the place is well kept, and you want to keep them). Or why not pay for upgrades instead of just cash out of pocket? Offer to spend some money on an upgrade to the place, or something they want - that will stay attached at the unit. Is the bathroom old? Maybe a new vanity/mirror set? They love to cook? Maybe a nice backsplash, faucet, spice racks.. Fridge too small for their family? Sell the old one on CL and upgrade to a bigger fridge..

I would look at those options first. Shows you care, better bang for your buck, and hopefully should lengthen their tenancy by giving them something they need/want that will also provide benefit for a future tenant, reducing your turnove time in the process..

@Donald Longo , my best recommendation is to keep your expenses low, read lots, and I recommend using an FHA loan to buy a 4plex if you want to really utilize limited capital..

I am considering this now with a habitually late tenant.

But instead, I was thinking about having them enter a new lease at $25/mo higher (they are already near the top of market, or I would do more), with a late fee after 5 days, then daily.

I would NOT convert. Gas is much cheaper to operate. I know prospective tenants who have actually asked me gas or electric because of this. Most people prefer gas also for cooking because it heats up quicker. I am not aware if they are ACTUALLY more dangerous or not, but haven't had any issues (for example, electric burners stay hotter longer, even though they don't look hot - easier to burn a kid accidentally?). Get a carbon monoxide detector for any area with a gas appliance.

To be honest, I've only heard of people wanting to convert from electric to gas, but mostly in owner-occupied houses for cooking purposes..

Some may call me crazy, but with all the boomers retiring and many downsizing, is it crazy to just buy and hold a 2br home? Better rents/ft with smaller homes. Better sale price/ft..

Either way, I would be asking myself what the ROE of the marginal costs of the additions versus the marginal cash flow created by it.. There is also the added value. But I would just add the marginal value as a cash flow way in the future when you plan on selling it.. then discounting back..