All Forum Posts by: Kimberly T.

Wow, you got thrown in the deep end on your first day.  Hopefully it is nothing caused by the building (carbon monoxide poisoning, etc.).

I agree with others above, let them out of the lease.  Personally, I don't like leases, we do month to month so that both we and the tenants can just part ways simply if things don't work out.

I've heard pros and cons to setting bills to auto-pay.  Pros include saving time and stamps, not having to worry about forgetting to pay it, etc.  Cons include having trouble getting them to undo the auto-pay set up (maybe that's only with private companies?), running into trouble when you change an account or something else changes, etc.

So I'm curious what fellow landlords do.  We own our house plus 4 rentals, so I pay a lot of bills.  Do you set up all bills to auto-pay if possible?  Only certain types of bills?  Why/why not?

Typically, what I've read is that you write a check to all tenants for the full amount, and let them sort it out.  So, you'd write a check for $XXX made out to "John Doe and Jane Doe."  You will want to address any damages prior to sending back a check made out to both of them (repair holes in walls, etc.) and deduct that cost from the check.  Though I guess they could both give you something in writing that they're ok with handling it differently (allowing him to take on the responsibility of all damages, or allowing him to have the entire deposit back, etc.).

If you're ok with keeping just the husband in there as a tenant (assuming he has sufficient income, credit, etc.), then you'll collect a new deposit from just him and write up a new rental agreement with just him.

Not a lawyer, not legal advice.  Check with a lawyer familiar with your state/local laws.

@Colleen F. I wouldn't tell him to leave, I'd just give him the happy clause: "Sounds like you aren't happy here, but I'd be happy to let you out of your lease without penalty."  If he leaves, great, no more pita to deal with.  If he stays, great, he'll know not to bother complaining about frivolous stuff to you any more.

a) As someone above stated, Postlets is another great site to use, and it's free.  It posts your ad to a lot of the popular ad sites (zillow, trulia, etc.).  I wouldn't bother advertising in the newspaper.

b) You have to decide whether you want to advertise/show the unit prior to the current tenant vacating.  Personally, we don't advertise/show a unit until it is vacant, clean, and ready to move into, so that prospective tenants can see what they're getting and know what our cleanliness standards are.  I know this idea is debated among landlords, but that's how we operate.  If you want to advertise/show it while the tenant is still there, you must provide at least 24 hours written notice of intent to enter the unit, and it must be reasonable hours (not 10pm or something ridiculous).  If you're going to show it while the tenant isn't there, you'll have to figure out how to make sure no one touches or steals their stuff (another reason I don't do that).

I highly recommend you read articles and forum posts here on BP regarding tenant screening, discrimination, how to get deposits and sign rental agreements, etc. prior to doing any advertising.  I also highly recommend you read up on landlord tenant law in CA (google 'ca landlord tenant law' and you'll find a pdf on the CA Dept of Consumer Affairs site).  I really can't stress that enough, it has a lot of very important info.

Also, you need to provide your current tenant a form about her right to a pre-move out inspection (did you do that form yet?), and you'll need to do the security deposit accounting for the current tenant after she vacates.

Sounds like it's time to serve this pita the "happy clause."  Seriously, if people don't like the sound of people walking above them, they shouldn't move into a downstairs unit.

No, we've only done conventional loans for our properties.

For me, I've never used the 50% rule.  Property taxes and insurance premiums vary way to much in different states for it to make sense to me to use it.

If you're asking about what kind of rule of thumb to use to determine if a property is worth further investigation, I personally use the GRM (gross rent multiplier) rule of thumb, because that's what I was taught. That rule is: I don't look at a property whose price is more than 10 times the gross rent. So if the gross annual rent is $30,000 then I won't bother with it if the price is over $300,000. Of course, that's just a rule of thumb, you still have to know what the real break even point is in your particular market. You can adjust it according to your market (8x rent, 11x rent, etc.). But it's an approximation that's really easy to calculate to determine if something is worth more time.

Now, as for buying a newer building, you can absolutely adjust your Cap X and repair budgets accordingly, but that goes deeper than the 50% rule. The 50% rule (or GRM or any other rule of thumb) shouldn't be used to actually analyze a specific deal, because each property is different. I actually spend some time figuring out exactly what we should budget for each property's Cap X and repairs based on the property's specific amenities, condition, etc.

@Philip Davis You should be using a real estate agent familiar with buying/selling rentals, so they can help guide you.  You will want to request estoppels from the tenants, get an inspection period that allows you enough time to walk through and inspect the unit(s) yourself (look at how the tenants maintain the interior, look for deferred maintenance, etc.) as well as getting an inspector in there, and get copies of all rental agreements and any other contracts the owner has for the building (landscape service, pest control, cable, etc.).  Review all documents you receive from the owner to make sure you accept the terms, because once you buy it you're stuck with those terms.  Make sure your lending is all lined up, if you're not paying cash, and that your lender knows it will be a rental.  Get insurance quotes and make sure the insurance companies know it's a rental.

We own 4 multifamily properties, and they were all occupied (at least partially) when we bought them.

We just bought our 5th property in December (all our properties have mortgages).  Got in contact with a local lender recommended by our real estate agent, and it wasn't any harder than getting loans 2-4 (first loan was for our primary residence, so that was different than buying a rental).  Just had to send them all the same kind of info as before - tax returns, bank statements, current leases, etc.  As others above stated, you can get up to 10 loans now.