All Forum Posts by: Mary Cronin

I almost always see 10% if you ask a PM company. What they actually do is individually negotiated. 

When I commented on a 6% management fee on a MHP, broker told me it was normal for MHPs. (not from what I've seen) It'd be nice though. Maybe on MHPs where the MHs are tenant owned it makes sense, since there are no repairs to be arranged. 

You have to buy from the owner and the bank is not owner. 

Find out why the owner is unwilling to sell - there may be a solution you're not seeing. Finding out what they're thinking may help you convince them to sell. 

Do you have a property profile from the title company to ensure you're speaking to the owner of record? 

Don't over-improve, you'll never recover your investment. What's the neighborhood? Don't turn a C investment into an A if it's in a C neighborhood. 

I looked at a complex built in the 1940s (maybe 50s?) that had tiny metal kitchen cabinets (still - 2016), but it was a complex of 1b1bs and the cabinets worked even if they were nothing like more modern structures have. Except for carpets I don't think it had been remodeled since being built. And it was built of concrete block walls, so maybe any other type of remodeling would have been cost prohibitive.

Of course I felt there was no opportunity for value-add - the rents were as high as they could be for the units, all considering. (And I don't like 1/1s or studios in general.)

A question and a thought - is tenant on a lease? If only month-to-month, give her a notice to vacate and find a different tenant, assuming it's allowed. 

PS

Reserves (roofs, bathroom & kitchen remodels, carpeting, vinyl etc etc)

It's kind of hard to look at and see what you're including or missing. 

If this is a multifamily (I think yes?) then you're missing .... 

Back taxes (if any; check county website; last one I looked at had $22k in back taxes; should be in title report/policy) 

mortgage arrearages (if any)

cost of forming an entity (if needed) & tax (CA is minimum $800; why don't I move?)

acquisition fee (usually 5% if you're buying with partners or investors) 

Credits at closing ... 

repair allowance (maximum of 5% at most banks) 

prepaid rents (if closing on the 6th of month then 25/30 of rents go to you) 

first & last months rents (if charged to tenants; less whatever was used from 1st Months)

Security deposits (go to you at closing) 

Pet deposits (go to you at closing) 

Income ... 

Storage income (if tenants pay for storage sheds/lockers etc) 

Laundry income (you had laundry XP but not income) 

Vending income (if property has vending machines) 

Expenses ... 

Internet (you may need to have this if laundry machines, security cameras, etc etc need to be accessed remotely; with a big enough property companies may pay you to be exclusive - larger apartment complexes, MHPs, RVPs and marinas) 

Payroll, Payroll taxes, Employee benefits & workers' comp insurance (if onsite employees)

Vehicle expenses, repairs, licenses, gas & oil & insurance (even for cushman carts for maintenance people)

Licenses 

Bank charges (NSF checks etc; I include an allowance for this in expenses just in case; also credit/debit card fees if tenants pay with cards) 

That's all I noticed. 

Here's a quote from Dave Lindahl's booklet The 23 Most Costly Mistakes Investors Make, and How to Avoid Them (maybe 2011) ... 

"When someone used to call my office for a repair, I estimated how much that repair would cost and asked him or her to have payment ready when the maintenance man got there. It's amazing how many clogged toilets became unclogged before the maintenance man got there! It's also amazing how tenants seemed to be able to fix a number of other minor issues that arose after that."

My friend had a tenant that dumped more than a pound of pasta down the kitchen sink. The plumber she called refused to let her pay him - said the tenant had to - they caused the problem and they should fix it. Unusual for a vendor, but still enlightening. 

I would think this might solve your problem. 

Besides, wouldn't a washer be appropriate to repair a leaky faucet (rather than replacing it?) 

You need to learn to control your tenant. Stop fearing being sued, it affects you more than the tenant. 

Have you taken care of asset protection? (LLC, appropriate insurance or corporation etc.) If not, see your attorney.

Probably a dumb question, but how much does replacement cost? And then, how many hours have you spent trying to clean them? 

I guess, a little cost/benefit analysis. Is your time better spent looking for more investments? 

But I haven't used it lately, but does CLR work on it? 

@ Marybeth Green

Live in CA (for the moment) but looking for rentals in NM.

Recall Gavin Newsom? Good idea, but how about the rest of them?

They should all be unemployed for the same amount of time that the longest unemployed person in CA has been - teach a little reality to them - preferably without any stimulus rescue. I have a friend (a welder) who's been unemployed probably close to a year (so part-COVID, but otherwise? union worker in Bay Area, but lives in Stockton).

@ Marybeth Green

"The solution for California's fiscal woes will never be to give
Sacramento more money. That's like giving a compulsive spender a new credit card, he will continue his same bad habits.'

Now if we can get them all fired, there won't be anyone in Sacramento to enact more stupid laws we don't need or want. 

Hmm. I forget what I'm advocating - nihilism or anarchism? 

Sorry as a science (and law) grad, never had to suffer through poli sci.