All Forum Posts by: Kimberly T.

Dang it, I just pasted over my text!  Give me a second, I'll retype my question as a reply.  See below.

Depends on what you mean by letting them slide.  For a tenant's first time having to pay the rent late, we may let them pay a few days late without paying the late fee (but they still have to pay within the Notice to Pay or Quit time period), though it depends on how long they've lived there, if they've been a good tenant otherwise (not causing problems with neighbors, not breaking stuff, etc.), etc.  As our AZ PM calls it, they get one "mulligan."  I think that's a golf term, I don't remember, I hate golf.  We don't let them pay after the Notice to Pay or Quit time period, we don't accept partial payments, and we never excuse any portion of the rent from being due.  Ever.

After their mulligan, though, they have to pay the late fee if they pay rent late again.  No exception.

I know, I know, you're shocked, right? ;)

https://homes.yahoo.com/news/experts-rent-control-causes-more-problems-solves-181219436.html

Rising rents nationwide are causing rent control to gain traction — but not among economists, real estate analysts and other housing experts.

A whopping 63 percent of experts surveyed for the Zillow Home Price Expectations Survey (ZHPE) said rent control ordinances are “government intrusions into the marketplace that, however well-intentioned, always create more problems than they solve.”

It’s unusual for such a large group to agree on a single answer, according to Terry Loebs, founder of Pulsenomics LLC, which developed the Zillow-sponsored survey.

Even if it's "legal" per state law, it's still illegal per federal law.

The potential for damage to the house alone is enough reason for me to never allow marijuana in any form in one of my rentals.  That's just my view, of course.

Listed our apartment Friday at lunch, had dozens of calls for the next couple of days, and over 2 dozen showings.  Good time to be a landlord!

One call that stood out (I'm paraphrasing and summarizing here):

Caller: (after asking some basic info about the unit) What is the criteria to get the unit?

Me: You have to fill out an application, then we verify income, check credit, background, etc.

Caller: What is your maximum for credit?

Me: Maximum?  The highest score I can get.

Caller: No, I mean like what's your maximum, what will you take?

Me: You mean minimum?  Well, we have a cut-off score, do you know what your score is? (I don't tell them our cut-off until they tell me they score... I've noticed their "estimated score" always comes in above our cut-off if I tell them ahead of time)

Caller: Yeah, well, yeah, my score is 589.

Me: Sorry, that's below our cut-off. (Our cut off is 600, no exceptions)

Caller: Well, this isn't that great of a place (I think he's referring to the neighborhood, which is probably C+ or B- class), you aren't going to get a score higher than that. (said in a very condescending tone)

Me: Well, ok. <<click>> (I hung up)

Sorry, I'm not going to debate a person on what quality of tenant I can get.  Didn't even want to bother telling him that the last 3 tenants we've gotten in that building all had credit scores over 600 (it's only a triplex, and we've only owned it 5 years, so we don't have too many vacancies).  Btw, got it rented over the weekend to someone with a score over 600, so now it's 4 tenants with scores over 600.  My husband joked that i should call that jerk back and let him know we got someone with a higher score. :)

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Also had someone put in an application with an obviously fake SSN/TIN (he wrote 999-99-9999).  Seriously, we told them we check credit, did he not think that would come back as an issue?  Who does that?

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My husband reminded me of a call he got a year or so ago when we were advertising, and I don't think I posted it here before:

Caller: (after asking a few other questions) What is the security deposit?

My husband: It's equal to one month's rent.

Caller: Want to try again?

My husband: Excuse me?

Caller: Want to try again?

My husband: <<click>> (hangs up)

I just don't understand people who are so rude/entitled, do they really think that makes us want to rent to them?

We schedule our showings in groups, typically 2 showings every 15-30 minutes, so we could end up with several showings within an hour, perhaps for even a few hours straight.  Last year we spent most of a weekend showing a unit because so many people came to see it, and we got to pick the best applicant.

This has 2 benefits: 1) if you have a no show, you didn't waste a trip to the unit; 2) having several showings fairly close together let's people see that there's lots of demand for the unit, so they better act fast!

There was another similar post here recently:

http://www.biggerpockets.com/forums/52/topics/2025...

I stand by my opinion in that post.

We currently own our home and a triplex in CA, and some fourplexes in other states.  I recently saw a 12 unit apartment building get listed in another state for sale for about the same amount our CA triplex is worth (I know, right?  CA prices are crazy).  We're planning on selling our CA triplex in the not too distant future, so I was pondering doing a reverse 1031 on this as I don't see us being able to sell our triplex before buying the 12 unit.

Current triplex info: worth around $725,000 or so, mortgage principal is about $340,000. We have about $135,000 cash into it (original down payment + closing costs + etc.). Net profit every month is around $750 after accounting for all vacancy/expenses/etc., so that's about a 6.5% ROI.

Here's the 12 unit info/estimates:

(11) 2-beds and (1) 3-bed, plus a storage garage that is rented out separately.  Consists of 2 one story buildings, a pool, some lawn, and some covered parking.

Asking price = $750,000

Current income = (11 x $585) + ($685) + ($300 for storage garage) + ($125 laundry) = $7545/month

Market income = (11 x $650) + ($750) + ($300 for storage garage) + ($125 laundry) = $8325/month

Insurance = $3000/yr = $250/month

Taxes = $5000/yr = $420/month

Water/sewer = $700/month

Trash = $120/month

Electric = $200/month

Landscaper = $220/month

Pool guy = $150/month

Maint + cap ex = $85/unit/month = $1020/month (I know most people don't lump those together, but it's just how I do it to run numbers, and this is what we allocate per unit at our other units in this area)

Above total expenses = $3080/month

If I go with the same vacancy (7%) and PM (6%... yes, our PM is giving us a deal) as for our other units in the area, that means current net income is $6600/month, and market net income would be $7275/month.

We have enough cash that we could put 25% down now to start the reverse 1031, but I want to look at this longer term to see what our final numbers would be. Now, let's say we sold our triplex for $725,000; accounting for realtor costs/etc., let's say we end up with $670,000 (with $330,000 of that being cash and the rest paying off the mortgage).  So we'd have $330k to put into the 12 unit, so loan amount would be $420k (assuming we paid full price).  If we could get a commercial loan amortized at 20 yrs, I'm thinking our payment would be around $2850/month.

So expenses + mortgage would be 3080 + 2850 = $5930/month.  So...

Current rent profit = 6600 - 5930 = $670/month = $8040/yr

Current rent ROI = 8040/(135k + another 12k for closing costs & 1031 expenses) = 5.5%

Market rent profit = 7275 - 5930 = $1345/month = $16,140/yr

Market rent ROI = 16,140/(135k + 12k) = 11.0%

Not crazy about the numbers because we don't know what the interiors look like yet or how much effort/$$$ it will take to get the units up to a condition to be rented at market rate, but it's something we're pondering.  Thoughts?

That sounds like discrimination based on age, which is illegal.

There is a huge complex right across the street from our CA triplex.  The complex has a pool, play area, fitness center, etc.  Their units may be a little bigger, too.

However, our units have private fenced back patios (the complex doesn't), a garage directly off the street with easy access (the complex is big, so parking isn't close to all the units), and it's relatively quiet (since there's no pool or play area).  Yes, we charge lower rent than the big complex, but we don't have trouble renting it out.  Not everyone wants the big complex amenities (and inconveniences), and we aim for the people who would rather save a few bucks than live in a complex with lots of amenities.

We know we aren't going to compete with the fancy complexes with all the upgrades and amenities, so we don't pretend to be comparable and we don't ask the same rent as them.