All Forum Posts by: Laura Williams

@AJ Vanderhorst If this 4 plex is your primary home then it shouldn't be too hard to go to a traditional lender and get a HELOC.

If this property is an investment property and held in an LLC you should be able to get a business line of credit with the house as collateral. It's like a heloc but they call it something different. And usually banks don't want you to keep a large balance for more than a year or 2 on these lines of credit without seeing you pay it off. Whereas a traditional heloc you can take 30 years to pay off.

There’s a lot of smaller local banks in KC that offer this product you just have to talk to someone in the commercial department. 

@Jake Sanders it varies so much based on the tenant and the property. In general I usually get a lot less maintence request from men tenants than from woman. A lot of times if the men know how to fix something and it’s small they will just fix it themselves verses the aggravation of having a maintence worker come to their home. And it also depends on how much of a perfectionist the tenants are. I have a couple who call all the time but those properties are kept in perfect shape and they pay rent on time so I indulge them as most of their request are reasonable. And the other thing is how much they pay in rent and if the property is a higher end verses a cheaper property in a more working class. Usually the lower end properties people don’t complain about too much where as in a higher priced luxury rental they feel more entitled to complain about everything. 

One tip I can give you is to not rent to people who complain about non existent problems before they move in. For example if they ask the property be professionally cleaned before they move in ....but the place is already spotless. Or asking for things like changing out a perfectly good lock on the front door or stuff done that doesn’t need to be done consider this a warning sign and don’t rent to them. My worst most filthiest disgusting tenants who caused me the most aggravation & called me screaming and threatening started out complaining before they moved in with small stuff that didn’t need to get fixed. Now I see it as a red flag as someone with mental issues and I would cancel a lease with such a person if it wasn’t too late. For example the lady who requested the place be professionally cleaned before she moved in  ....never ever ever cleaned the place after she moved in and then expected me to pay her hotel bill cause she claimed her place wasn’t inhabitable & broker her lease. Or the guy who wanted the trash in his yard picked up & was constantly hounding my PM about trash in his yard was hoarding 5 dogs in his house and filthy & smelled like dog pee & I evicted him after only 3 months. 

But in general my experience has been 95% positive with tenants & the bad 5% was where I could trace it back to screening of the tenants that could have been avoided. Most of my tenants have been normal and pay on time and if they ask for something to be fixed it’s legit. 

As far as the light bulbs I’ve started using LED bulbs in all the light fixtures. I’ve found usually when tenants try to change the light bulbs they beak the fixtures plus it also saved money on electrical bills which helps with an older house. 

@Jake Sanders from my experience in KC  it’s all over the place. I have some houses that go years without needing anything and then other houses where it seems like there is maintenance issues all the time. Usually tenants complain the first 2-3 months after they move in about whatever is wrong and then they calm down. And then occasionally you get a big expense like a water heater goes out or furnace.  A lot depends on how well the house was rehabbed and if preventative maintenance is done ...preventative termite treatments or making sure the soil is graded and gutters are clear and hvac/A/C serviced regularly. Also doing a yearly inspection of the house to catch small issues before they become big and make sure the tenant is keeping it in good shape. 

I budget about $250-300 month per house for vacancy/maintenance and turnover cost & cap ex. That’s using a PM so definitely cheaper if I was handy & could do some work myself. Most months it’s under that amount but if I have heavy turnover then it goes more than that. 

The one thing that will kill your budget is the property manager. Everyone always says get a good PM blah blah but what they don’t tell you is how incompetent so many of them are that know how to sell themselves and talk the talk & how screwed you are with a bad one. 

Here’s some real life examples of stuff that’s happened to myself & some of my friends using KC area PMs to give you an idea: Not listing a property for rent until a month after it was vacant, not listing a property at all for rent (and owner finds out 3 months later after he keeps lowering the price and lowering the price and can’t understand why it isn’t getting any interest and then finds out PM never listed it), doing half a** repairs that have to be redone or cause more issues and money later, stealing rent money and telling you tenant never paid, putting horrible tenants in your place without doing background searches (they lie and say they did but you do a simple google search and felon mug shot comes up)  & all hell breaks loose ...tenant trashes it, or you have to go through costly eviction cause they stop paying, can’t get your property rented to save their life ...months go by and you get feedback from interested tenants the PM never calls them back....upon confrontation they say they are busy and if a tenant doesn’t call them several times they assume they aren’t interested, being friendly with tenants and letting their rent slide for 4-5 months without eviction, using con artists repairmen who lie and say you need repairs that you don’t, PM paying an insanely high utility bill without question (from your money) or without inspecting for leaks/issues or that there isn’t squatters in there. Repairing an item that was clearly the tenant negligence and charging you for it ...I.e. broken door on microwave  .......you get the idea. Between myself and all the investors I know investing in KC right now I can only recommend one good PM company there and about 10 to stay far far away from. 

Long story but just be careful to choose a good ethical PM that is very detail and professional oriented as they can so easily kill your numbers. Just one mess up is your profit (&/or negative cashflow) for several years especially if you have a mortgage and thin profits. 

@Angela Milosevich this time of year is a little tough. I had a property last year that took 2 months to get a tenant (the tenants didn’t work out) so same house back on the market in the summer. In summer it rented in one day & had tons of interest. Also if this is a higher priced & higher end home then sometimes those can take a little longer to get rented. My cheaper priced properties in great areas people beat down the door and then the higher priced but nicer & larger homes can take longer cause I think most people in KC can’t afford more than $1200ish a month for rent.....unless it’s a room mate situation. Also in the more suburban areas with families people tend to want to move during the summer when school is out.  

But that being said how does the listing look? Is your PM using nice photos? That’s HUGE. It’s a big peeve of mine when PMs use crap photos or no photos on the listings it really makes a difference. Also your PM should be reaching out to these people who have viewed it to see what feedback they have. 

If your house has been on the market since Sept and it’s in good shape, clean, doesn’t have a bad odor and is priced right in a good area it should have gotten rented already from my experience. You might need to lower your price or do a move in special or 1/2 month-1 month free rent. Or it could possibly be your PM if they aren’t marketing it well or responding to tenants who are interested. 

I think the longest it’s taken me to get a tenant in KC was about 2-3 months.  80% of my places get rented in first 2 weeks. I don’t think I’ve had one go over 3 months. If that answers your question. 

Also going forward if you can have your leases set to come due during the spring/summer that will make things easier for you. Generally get it rented quicker and have more tenants to choose from so you can pick the best one. 

@Rob Gribben

One tool I have found VERY helpful is casenet.  If someone even has a parking ticket in the state of Missouri it comes up on that site. So it wouldn’t be a bad idea to run all potential tenants through that site to double check your PM screening.  

Another idea would be to ask for a higher deposit. I’ve notice with cheaper rentals where the deposit is less there is more incentive for someone to leave a place trashed. If someone has 1K or more deposit on the line they usually want to see it again. 

I’d also not do carpet in rentals as it’s too easy to ruin. My choice is vinyl laminate flooring in a distressed look so it can take abuse without having to be replaced. 

And the other thing that’s been mentioned on here is doing inspections ..at least once a year. I just bought & gut rehabbed an animal hoarder house that had 49 cats living there. That house was a rental and the cats belonged to the tenant. I’m guessing the owner never did his yearly inspections and paid the price as that house was totally destroyed ...and the smell!!! 

Or another idea you might consider depending on your house is section 8. Those tenants have incentives to keep it clean as they get kicked off the program for life if they trash it. I just Section 8 my first place last year and they did my first yearly inspection and on the list was there couldn’t be any trash on the property and appliances had to be clean etc etc. So far I’m a fan of the program. 

@Toby M. that's a good question. I'm not sure what code is or if there is a code for that. I have a put a couple closets in that were pretty tiny. More than anything I've done it for the appraisal since I try to BRRR as much as possible. When it comes to appraisals is where the extra legal ‘bedrooms' really count more than in the rents prices ...in my opinion. Tenants can see the size of the space and probably don't care about having a 2 foot closet or a window in a bedroom but the appraisers do.

@Account Closed Good point. It never hurts to try. I've been told to pi** off on some of my low bids or in one case the seller was so insulted they didn't even counter lol but then again I've been surprised at some of my bids that was accepted. My friend once got a seller down from asking price of 250K to only 50K. So lesson is it doesn't hurt to ask for a lower price lol

@Mason Wade Morris I think tenants could probably use that room for whatever they wanted but you couldn't advertise it as a bedroom for rent without the window and closet and it would effect resale value of the building since the second bedroom isn't legal. You might get a bid to see how much it would cost to add a window before making a final call. I had a friend who added an egress window in the basement where they actually had to cut through the foundation and he got it done for $1800 which I thought was really cheap for something like that so it might be less than you think. 

Or the other possibility is that it will get a nice rent as a one bedroom since it has the "bonus" room and all that extra space and you still go through with the sale. I would comp this duplex as spacious one bedrooms for running the numbers.

@Mason Wade Morris from what I know a bedroom has to have a window and a closet otherwise it’s not technically a bedroom. Any RE agent I know or ever worked with would advertise this as a one bedroom if the second bedroom doesn’t have a window. Maybe they’d call that second bedroom a ‘bonus room’ but not a bedroom.  

If it’s a good deal as a one bedroom then I would move forward. But if it drastically changes your numbers and gives you negative equity & there’s no way to add windows then I guess that’s something to think about. 

@Jahbari McLennan I bought one house on Hubzu in 2015 and very happy with my purchase. I didn’t have any issues. I think there was some extra fees but it wasn’t a big deal.