All Forum Posts by: Karl B.

The tenant call yell all he wants - as long as you have the photo and/or video evidence of move-in and move-out condition there's not much he can do. 

When a tenant loses any security deposit money I send him/her the damage photos as well as the post-repair photos along with the cost of repair. 

PS. Send the former tenant some of the leaves from the yard and tell him to go smoke them and chill out.

One option is to file a lien. I did so at the prothonotary's office. Liens last for different amount of time in different jurisdictions but it gives you a chance of getting your money if the tenant wins the lottery, receives an insurance settlement or sells a home (such as if they inherit a home and decide to sell it).

A lien needs renewed every few years (typically every 4-10 years) but they're often cheap to file (I paid under $20.00).

With cash, you can buy value-add that a bank loan wouldn't touch. 

I bought a small portfolio in November and the roof on one of the properties (a triplex) is swiss cheese and the 2nd floor unit is down to the studs due to a roach infestation (the seller did the demo after having it fumigated). 

Also, the rents are below market which banks don't like as the rental revenue is of course factored in. 

The seller (who held the properties for roughly a year before selling to me) said when he bought the properties the original seller said if he wanted to buy the other properties he must also buy the 3-unit (I think it cost an additional 28K for the 3-unit which is insane despite it needing a new roof). 

No bank would ever give a loan for the condition of the roof. But the foundation and plumbing in this place are solid and it has some new windows on the 1st floor. I'm replacing the 2nd floor windows and am adding new siding and gutters along with the roof. 

Once the place is tricked out and the 2nd floor unit is remodeled I'll be getting around $1900 a month in rent and I've calculated that even at current rents in five years the rehabs and the cost of the properties will all be paid for. 

This is what cash buyers can accomplish if they have patience and can envision the repairs. Value-add is a beautiful thing. 

When it comes to explosions, over there it's terror leaders over here it's meth labs.  :-(

Great question. I felt really good when I found my first property. The numbers made sense (and then some) and the property (a 4-unit) was C-Class but in a pretty good neighborhood surrounded by SFH (which I consider a good thing).

The seller made a lot of the repairs I wanted - a few didn't get done because I didn't walk the property prior to closing to make certain all repairs were done (lesson learned). Over the past 5+ years I've fixed it up and rehabbed it. One unit has yet to be worked on (inherited tenants still live there) and I've had no issue renting the apartments out. 

When I started I had watched a lot of the Brandon Turner webinars where he talked about the 2% rule. I know some BPers hate that rule but it has worked for me in my market where I've exceeded the 2% rule (my record at purchase is 3.68%). I like cash flow and don't factor in appreciation as it's minimal in my market, plus I buy-and-hold so appreciation is not a factor for me (and I'm less likely to be reassessed if it's low, which is cool). 

I had watched a few dozen Brandon Turner webinars (which are geared toward new investors and the info is somewhat repetitive which drummed it into my mind) and so I was confident I knew the difference between a good and bad deal. 

Me personally, I set up the LLC myself and had a RE attorney write up an Operating Agreement (he charged me $250 for that but I can always reuse it for future RE LLCs).

I don't mess with collections, who tend to either charge a high percentage or buy the debt outright for cheap. 

If a tenant isn't paying, immediately begin the eviction process.

I evict and sue the tenant for money owed (In my PA market it's done at the same hearing which is nice) and 30 days after the judgement I go to the prothonotary's office and get a lien against the tenant(s). That way if they ever receive a judgement (or an insurance settlement) or they sell a property I'm first in line to get paid. 

For my local PA market:

Pros:

-Great cash flow

-Good local laws

-I grew up there and know who the good tradespeople are

Cons:

-It can be harder to self-manage when you're not there and most PM companies suck

-It can be tougher to get good deals when you're not physically there and the competition is

I keep buying property in my PA market and so I'll be moving back there to be my own boots on the ground. :-) Plus it will be easier to secure more deals. 

I would install a door. Most people know how to use a shower curtain but I've had tenants who can't seem to figure it out and thanks to them I've had to replace sub-flooring. 

Also, a random tip that doesn't apply here but for tubs I've started installing splash guards on both ends of the tub.

For my C-Class rentals I do:

-3.5X earnings

-No prior evictions

-625 credit score

-1st month's rent and security deposit

-No smoking or vaping on the property

-Pets depends. In the past I didn't allow dogs but I bought a small portfolio and literally all the occupied units have dogs and so I would be more likely to admit a dog at that place but not at my other dogless MF properties. I accept up to two cats with a $20 monthly pet fee.