All Forum Posts by: Karl B.

I use Millville Mutual for my PA multi-family properties. They were the cheapest and the coverage is good. 

I'll be vague but I dealt with a suicide in one of my duplexes. It happened about 45 days after I purchased the property and the tenants were inherited. They immediately arrested the other tenant but that person was released hours later when it was ruled a suicide. 

It's not a good feeling to be watching the morning news (I was in town and rehabbing the vacant unit) and seeing your property on the morning news linked to a death (at that point the news reported it as a murder). 

Luckily, there wasn't a mess (not trying to be insensitive). The family of the person who committed suicide was of course distraught. The other tenant didn't want to live there anymore and so I ended the lease. 

The family of the victim cleaned the unit and removed their family member's belongings. They blamed the suicide on the other tenant who moved out later in the month. 

It was a sad, strange situation. I was there earlier that day painting the vacant unit until 7:00 PM. It was quiet the entire day. After I left I was told there was a crazy argument - smashed glass tables, a damaged vehicle and worse. I contacted the local detective assigned as lead to the case and even left my info with an officer who was parked outside my house (I wanted to know what was going on and figured they'd want to ask me questions as I was there earlier in the day) but the detective never contacted me (they seemed unprofessional - they tossed their latex gloves they wore inside the house outside on the porch which I found to be rude and insensitive based on the situation).

I think I handled the situation well - I got a card from the deceased's family thanking me. They told me a lot about what was going on in the unit and of the relationship the tenants were having (alleged illegal activity which I was also told about by neighbors). 

It's just tough getting money from a lot of those renters. I'm all about buying on the cusp of B-neighborhoods. Though I believe there's opportunity in small commercial properties in those areas. My house is on a rather quiet street but is near a sketchy street. The corner stores make a lot of money. The foot traffic is amazing. It will be interesting to see if cheap Erie land/lots start being bought up. Let me know if you've noticed this - I haven't looked into it yet. 

Please let me know who your handyman is. I work with two handymen but they're both so busy their client list is backed up for months. Many thanks. 

@Dennis M. It's amazing, isn't it? The headaches some of these investors are going to experience! You know the areas/streets I'm talking about (Wallace, Ash, German, etc.). 

It's just amazing. No doubt local RE agents are loving this too. And I bet Howard Hanna, Marsh, Agresti, etc. are going to inflate asking price (Howard Hanna always has) but it simply means we'll need to adjust our game plan and adapt. 

Also, - who do you use for window replacement and installation in your properties? 

---

@Jay Hinrichs There are a few I will hold onto but you're right - if the price is right it makes sense to sell and 1031 into something else. My siblings and I own some commercial properties in Erie and we're ready to sell those. So far, activity has been good - just a matter of working with buyers who can deliver (maybe that out-of-state money will consider buying commercial!). Selling large commercial is a much slower process but is exciting to be a part of. 

---

I agree. My local market (NW PA) has been traditionally cold. The returns are great but it's tough getting good renters and local property management companies are notoriously bad. 

In the past six months A LOT of out-of-town investors have been buying properties (including the cheap houses in the bad areas). 

I'm even getting letters wanting to buy my rentals (something that never ever occurred previously).

Point is, I see some investors doing foolish things - chasing returns in a market they're not knowledgeable in. There's no doubt some of these investors are going to have trouble filling a unit or they're going to have nightmare experiences with the inept PM/bad tenants and will sell for a loss. 

At times, I see dumb money throwing itself around. It's similar to people buying stocks before a crash simply because the stock keeps rising. 

The good news (for the city I invest in) is they'll have additional property tax income and I doubt most out-of-town investors will contest their property taxes to have them lowered. 

I've had a few BP members from out of town contact me (about where I invest) and I commend them for doing due diligence so they don't buy a bad deal (I.E. a property in a bad part of town) but on the MLS I'm seeing a lot of bad properties being purchased.

You're right: there's no way to time the market - we can simply be prepared for it as I 100% believe riches are made in the worst of times (buying great deals or investing in beaten-down stocks). 

Remember when the stock market kept tanking because of Euro debt (Greece, Italy, Spain, Ireland, etc.)? It's amazing - it was talked about on the news daily and the 'reason' for bad days in the market (this was around 2009 or 2010). When's the last time these debt-ridden countries were blamed for a bad market day? 

And then there's that elephant in the room - I also wonder when our insane government debt will 'become an issue' (I quoted that because it's already an issue but it's been ignored for decades).

Hello. I tried it with one tenant. He wasn't even asked to trim bushes/trees - only to mow the yard with a mower and gas I provided. He couldn't even do that (the grass grew too high and the other tenant in the other unit complained). 

If you go ahead and do it, I would recommend you have the tenant agree to mowing a specific number of times a month and not when he thinks it needs mowed.

And this is why periodic landlord inspections are essential. 

Since you're in Missouri, here's a link as to how to evict in that state: https://legalbeagle.com/8262728-evict-someone-missouri.html

Hi. Over the winter I spent just under 2K for labor and around $500 for material (new fixtures, new toilet, new vinyl flooring, wood to replace the floor).

The bathroom was a mess. The pipes kept freezing and there was a mold issue (the bathroom was like this when I bought it - not sure how my inspector missed it and it turns out the floor was rotting as well.

My handyman couldn't get another tub surround in there and so he installed these wall panels/planks that were waterproof. I forget what they're called but I think they have the letter z in the name. They ended up looking pretty good. 

He used a few layers of wood to replace the floor - he showed me the old wood and it was bad - rotten. 

We closed off the window and that remedied the freezing pipes as well. I know I have the before photos - I don't know if I took after photos or not but the handyman did a good job. 

I have to have a ventilation system put in (since we removed the window the city requires this) and my electrician wanted me to be in town for that - so thanks for reminding me to call him. :-)

I look to see which units are kept nicely by the tenant. These are the inherited tenants you want to keep. I also look for ways to bring in more income (such as coin-op washers/dryers), storage, etc. 

If any units aren't being shown I ask why. I also ask about the utilities and which are on separate meters. If current rent amounts aren't provided, I ask for them. I also ask when each lease is up and how long each tenant has lived there. 

Finally, I ask why the seller wants to sell. That will tell you a lot and if a property can be had for less. 

I've got a few Section 8 renters. 

Pros: 

-Section 8 typically pays between 70%-100% of the rent and it's wired into your bank account on the first of the month. 

-Section 8 tenants tend to follow the rules or risk losing their voucher

-If a Section 8 tenant damages your rental (and the deposit doesn't cover it) you can get a judgement and if you provide the Section 8 office with the judgement they will require the tenant to pay it before he/she/they can move into a different Section 8 property

-Section 8 tenants tend to move less than typical tenants (especially if your property is halfway decent as most Section 8 properties in my market are in bad areas of town)

-In my market, a Section 8 unit isn't inspected by the city because the Housing Authority inspects it yearly. This is nice when the City Inspector is more of a pain than the Housing Authority inspector

-The Section 8 office in my market is pretty cool. They realize when a landlord offers a nice, safe place and appreciate that

Cons: 

-When it comes to getting a unit Section 8 approved, Housing Authority offices are known for being a pain when it comes to the initial inspection. For example, they wouldn't let a tenant move in because a few windows were missing sash cords. That was literally the only violation. And ironically, I have an inherited Section 8 tenant whose windows are missing sash cords but they seem to be cool with that unit. 

-Section 8 tenants, in my experience, will call you for any little thing - much moreso than my other tenants. 

*Some Section 8 tenants are messy/dirty and have clutter and some are clean and keep their place nice.