All Forum Posts by: Michael Nemeth

@Aaron Smith

http://www.sokolowlaw.com/

They have been THE landlord-tenant attorneys in DC for decades.  

@Felsie Jones Go to BP's Resources -> FilePlace and you can find almost anything you need.  Like this wholesale contract.

Good luck.

@Nathan J.  I'm in the start small camp especially for newbies.  But it's hard to go against the likes of @Michael Blank , wisdom from experience there.

For a newbie, it's probably going to be more about education than profits (but don't ignore the profits!).

At this point, you don't know what you don't know.  You may not know how to handle: tenant relations, maintenance requests, contractors, turnover, lease admin, property managers, "professional" tenants, neighbors, capital expenditures, municipal codes, federal laws, evictions, lawyers, budgets, taxes, etc. and how each one can affect the profits (or eliminate them.) What you will learn in a smaller, less financially-demanding building can be applied to much larger buildings, hopefully, in your future.

Having said that, since you are just shopping, why not shop both?  It will help your understanding, probably increase your circle of contacts and may draw you to one over the other.  More doors can equal more profits if you know how to run them correctly.

Good luck.

@Dana Chun  It's not a pleasant thought, but play out the worst-case scenario if there were NOT any extinguishers.  You may have no "legal obligation" to provide them, but how does that argument sound in front of a judge/press/parents if a tragedy were to occur? I'd provide extinguishers, as well as smoke detectors (hard-wired if you can).  

Generally, if something is provided by the landlord, it should be in good, working order.  Checking or replacing extinguishers every year is a minor investment considering the potential downside.

BUT I would NOT provide the ladders.  The reason is for liability when there isn't an emergency.  I could easily imagine a provided ladder could/would be used for less-than-emergency situation (e.g. changing light bulbs, installing decorations, epic rail shots, etc.)  And in those situations, you would be liable for injury, etc. because you provided it.

It may seem like splitting hairs but just ask "what's my liability here?" for and against and the up/down sides become more apparent.

@Matt Faix These numbers look simplistic and I would not rely solely on them for the purchase.  Vacancy rate, maintenance, local business license tax/expenses, property management (unless you want to manage it forever and ever) are the most glaring.  I could easily see $5K+ disappearing with just those.

But to answer the question you pose: Pay future or current value?  If you will absolutely, 100% know what the future value will be, maybe.  (And LMK who will win the Super Bowl this year, too.)  Otherwise, pay today's dollar for what you get today.  And make sure it's valued as a commercial asset and not a common residential property.  It is only worth what it brings back to you and not a dollar more.

Good luck.

@Kimberly H.  From what you stated, you don't have a completed application so you don't really have an applicant to consider.

If they balk at providing any of the information you require, then it's usually better to say as little as possible, "Until I have a complete application, I'm not able to consider you as a tenant."  If she starts on a tangent, just keep repeating it.  She's probing for weaknesses she can leverage so don't provide any.

You may also want to consider not taking any application until the apartment's been seen by ALL tenants who will live there.  Not just in this case, but because often a husband/BF/GF/roommate will like the place and the other will HATE it and ask to be let out of the lease which costs you time and money. 

Finally, any qualification you have needs to apply to all.  If this couple gets the place (I'm hoping not from info to this point) and the next couple applies and is then required to provide pay stubs or employment information, you now have a potential discrimination case from the NEW tenants.  And since this conversation is now documented on a public forum (Better Pockets) you would be on the wrong side of having to prove otherwise.

Set the qualifications, it's their job to jump through, if they don't it's THEIR fault/falling/short-coming.  You can't be accused of discrimination because there was no application in the first place.  And don't bend for any reason, no matter the sob story, because it could hurt YOU in the long run, if not now then sometime in the future.

Good luck.

One question I'd always ask prospective clients is, "What were your issues with your last management?"  Because those were the issues they would most likely have with me.

A good deal of the time, it's not about the management, but the owner's perceptions of management and the owner's expectations of what should be done.  (You may want to jot those down for clarity.)

The best way to look at a Property Manager is as a relationship with someone who implements YOUR plan; You are the captain of the ship. 

I'm standing on the other side on this one.  I would not rent to them based on no employment, (savings would not be a consideration.)

I would not rely on "gut".  Since that will one day lead to discrimination or accusations of it.  I would not trust applicant-provided statements of holdings.  Since everyone has access to computer and printer. I'd trust verbal claims of funds even less.

Trouble happens when there is a different application process for different people.  Having a clear application process and stated qualifications is invaluable to reduce what could be trouble in the future.  Having a job or letter of employment from employer (as to when a job would start) should be one qualification.  

Having no tenant is better than having a bad one.  The prospective applicants are playing roulette with hopes of employment.  Are you willing to play roulette with their employment and your money, too?

@Kimberly H. I don't want to assume your situation.  Can you define what actions the applicant is doing that make them PITA?  That will show the best way to proceed.  

@Joel Owens  has some good thoughts and questions that need answering.  The only thing I'd add is timing.  Good thing you are asking now because you may be close to a market deadline.  Increase given today may not be in effect until Aug 1 meaning increase (if 30-day notice is applicable) would be effective Sept 1.

My guess is that MA Winters start stalling market rentals in Oct which means you may be risking a very long vacancy window if either or both tenants choose to vacate.  That is not a pretty proposition.  

And there is another variable not touched on: The $500 tenant is the son of the former owner, is that someone you have contact with or a friend?  What outside factors are affected should the increase to market be given?  That unit needs to be brought in line, everyone should be pretty clear on that already so there shouldn't be much debate, but is there any fallout that could affect you personally or the property as an investment?   

Turnover is always a costly proposition.  Be kind to the tenants but not at expense of the investment and make sure it's at a time that is best for you and the property.  It may be worth raising the $500 immediately and keeping the other set until Spring when rentals pick up again.  What you do NOT want is a fully-vacant duplex all Winter with no renters in sight.