All Forum Posts by: Kyle Benham

Jim, thank you for taking the time to comment. I super appreciate the detailed feedback and references for places to start for putting a system together. Based on all the comments, I plan to start out with increasing the amount of lighting, and then I will reassess. While I am reassessing, I will definitely look into your references and costs and see if/how I can make that work while still returning consistent cash flow for investment. I get it is a one time cost, but it looks like it costs about 1-2 months of cash flow to make it all happen. I do want to provide the best place for my tenants, but I also am trying to put myself in their shoes and accept that I knew what the area was like when I signed the lease.

Greg, thanks for the advice and info. I figured I'm not even close to the first person to have this issue, and it's great to hear your story and experience, and it falls in line with how I feel, but I was unsure of the ramifications to my property. Also, as I am just starting my journey and business, I obviously want to make money like everyone else, but much like everyone else, I also want to provide the best place to live in that I can for my tenants.

Dick, that makes a lot of sense. I have some exterior lighting, but it's definitely not bright enough and easy enough to hide in. It's awesome to see so many comments along the same lines which tells me it works. 

My property is in the vicinity of GCU, just east of I-17 and south of Camelback. Every time I'm driving the area, I see a lot of improvements and renovation and gentrification happening, which is one of the reasons I bought in the area. Sure, I'd love to be in a better area, but I went where I could get started, and it's worked out and I've learned a ton. I continue to believe the gentrification will move southbound from the trend I've seen over the last two years, and that will make things a lot better when/if it does.

Bjorn, awesome idea for the signs, I will add that to the lights and motion sensor inputs. Thank you. 

John, thank you for that advice. I don't know why I didn't think of that. This is why I love BiggerPockets, somebody always has a simpler and easier solution to solving/helping the problem. 

Hello all, my name is Kyle, and I'm looking for some advice from those that have potentially gone through and experience similar and what you all did to resolve it.

I bought a 4-unit multi-family two years ago. It is my first property. It's located in Phoenix and I live on the outskirts of Phoenix about 30 minutes away. I self manage currently and plan to turn it over to a property manager in the future at the next turnover of one of the units so I can focus more on my next purchase, which I am in the process of acquiring now. My issue recently has been theft/vandalism of the mailbox I installed almost a year and a half ago as well as last night, one of my tenants had their catalytic converter stolen in the middle of the night. This is a C/D area. It's right on the line of where properties start to improve as you move north and where things get worse as you move south, and I'm hoping gentrification continues southbound. It's no secret that crimes of this nature are prevalent in this area. I've worked hard to improve the property since purchasing through full scale cosmetic renovations of the interiors and most of the exterior. This allowed me to raise rents and attract better tenants than the average in the area. So I've been running through some potential options in my mind and on paper to fix this problem since I do feel that it hurts my properties reputation if tenants are having issues. Do I?

1. Leave it to the tenants. They are encouraged to obtain rental insurance at purchase, and they know the area when they sign the lease. Most have lived in the area a while and are very familiar. For those that aren't, I've been up front with them when they show interest. 

2. Invest in a security camera/system of sorts. The problem here is that from what I've researched, I'm looking at the need to then acquire internet (potentially place it in the laundry area, which is locked and closed off, unless of course a tenant leaves it open). This would be an added monthly expense and take from my cash flow, but would provide some comfort to the tenants. I've thought of maybe getting faster internet and then providing it "free" to tenants, but increasing rates at turnover by $50, so essentially I could turn it into additional income, but then if the internet doesn't work at times (which we all know happens), it's an additional headache to keep it up and running. And what keeps the same types of vandals from just stealing the security cameras is my other thought.

3. Does anybody have another way they have solved a similar issue?

@Sarah Bancob

You probably did the math, but $350 per month for 6 units seems low for CAPEX (depending on the what you put in that budget). I put roof, air conditioning units, water heaters, and plumbing all in my CAPEX. I'm in Phoenix, so heating isn't a huge problem. I just take the cost of each of those, and plan to pay for a new roof or AC unit or water heater at the expiration of the warrantee. I just add those costs up over 10 years and divide by the number of months in those 10 years to get my amount I need to set aside each month. It often comes out to about $100 per unit per month, but each location is different. If those items last past the warrantee, then it's extra money in my pocket.

@Gayle Eisner

I’m probably not nearly as experienced as others on here, but here’s my screening.

1. Interested applicant fills out a pre-screening questionnaire (I made this and asks for work and previous landlord references). If they don’t pass me calling their references and checking the info, then I tell them sorry. If they pass this, then on to step 2. I wait 1-2 weeks to select the top 5 for step 2. No fee.

2. We schedule a walk through so I can meet the individual, show them the place, and get to know them. I see how they dress, how clean their car is, etc... At this point I select my top 3, and I tell them where they stand and their chance of getting the place. No fee.

3. I tell the top applicant the place is theirs if they pass the credit check and background check. I have them pay the fee upfront. I also tell them it is non-refundable if they don’t pass, so they need to disclose what I should expect to see so that I can tell them prior to spending money if they are wasting their time and money. If the reports come back good, then I refund them the fee on the first month’s rent (reduce the first month equal to the cost of the background and credit check). I don’t have the backup applicants pay for any checks until they become the top applicant.

I do this because as an individual that has rented previously, I understand how frustrating the process is, and I want to make it better for the tenant. It also builds a trust between us as landlord and tenant that I’m not just looking for money, but I want a good tenant and will provide them a quality place to live with good service. Additionally, it helps me compete against the big complexes and “professionals” that charge a ton of fees prior to ever moving in. I also get a better pool of candidates.

You might think I get too many, but that’s not typically the case because as soon as I email them the pre-screening questionnaire, probably 80-90% never fill it out and return it. So that narrows it down pretty quick.

I hope some of this helps, good luck!

@John Farady

Great point John. I currently don’t rent to any students as I am just east of the I-17 and it’s not a big student area despite being less than 2 miles from campus. I have found the demand to be extremely high each of the 3 times I’ve listed in the last year post a full remodel of the unit.

@Bariso Sora

I like the min numbers you’re using, they’re very similar to mine that I used a year ago when I bought my first property, a 4-unit near GCU. I made a lot of mistakes in underestimating expenses (even though I thought I was over estimating). It worked out because I also under estimated what I could get in rents after renovation/remodel. I would say it will likely be difficult to find a property that meets those numbers day 1 (mine didn’t), but if you look for value add through under market rents and a neglected property in need of repair, then you can achieve those numbers plus some. DM me if you have more questions or want to chat, I live locally in Phoenix.