All Forum Posts by: Melissa Stanley

Great to hear you’re in Dayton, Chase! It’s a 2 bedroom house in the Historic South Park neighborhood. The extra person got “kicked out by their landlord” and my tenant told me about them because they wanted me to change the code on the door lock after he and his pit bull moved out (tenant moved in Dec 1, guest moved in Jan-April). My handyman later realized he had seen the extra person smoking weed in the living room but he mistook them for my tenant. The lease says any guest staying more than 10 days needs to be approved. The tenant referenced this clause saying that’s why they didn’t tell me but they needed the door code changed. They took me off guard so I haven’t had a conversation with them yet.

Our other properties are pet free and mostly families renting with a 650+ credit score (Kettering), but in this house we have never kept a tenant more than 12 months. This couple is a bartender and a pizza store manager with two large dogs. They didn’t have strong credit and income on paper is just over 3x rent. They were struggling to find a place and unlike my other options had a history of living in houses for multiple years so I thought they’d be longer term tenants.

I would want to do repairs and the 2 bedroom cottage would sell for much more if it were vacant so if I want to kick them out, I think now is the time. The lease says I’ll give them 60 days notice.

Quote from @Chase C Henderson:

Melissa,

I think some of the details can help make your decision. How did you find out about this additional occupants? Did they come forward, just a little late or did you find out during an inspection. Does the unit support that many people? I.e if its a 400 sq ft studio, that a problem that needs addressed. If its a 3 bd house, well its a smaller problem. Did you let them know when they moved in that if anyone else moves in they need to tell you? If yes, this is a problem, if no then set the boundary moving forward. Finally, I think the greatest factor is what type of property/tenants do you lease to? If they are work force, then a strong hand can be beneficial, if they are working professionals like nurses and they moved a coworker in, id be a little less concerned.

In my experience it is always best to be up front with tenants, let them know this third person needs to go through the application process if they are going to live there, (assuming its not a child). Let them know they will be charged an normal application for that person. It's not just for your protection but theirs. You should do a background and credit check and more. That way the existing/original tenant know that their new roommate isn't a safety hazard or liability.

*** Side bar love to see Dayton investor on here and glad to see you have such strong cash flow on this deal!! Way to find a good project!

0 Votes

Dayton, Ohio

I have some tenants I am considering kicking my out. They’re really great people, they’re clean, their dogs are well behaved but they just informed me that they had 3 people living there for 4 months. They have only been in the unit 6. I purchased the house in 2021 that was built in 1860…it’s cosmetically well done but I’ve struggled to keep a renter for more than 12 months. It’s drafty/quirky in a neighborhood that attracts young people. Because it’s at 2.8% interest, it’s my most profitable rental ($650 cash flow per month). I’m over there often - frozen pipes, backed up garbage disposal, a perpetual ant issue that all tenants have faced…but I really think the neighborhood is appreciating and constantly struggle with selling. These tenants have expressed a desire to stay long term and have been much more forgiving of the house’s quirks than anyone else. Also they’ve paid on time, but when do you say enough is enough and sell the property from under them? Maybe raise their rent? Maybe give them a warning on keeping people there? Would that encourage them to be dishonest in the future? How would you handle this one?

0 Votes

Dayton, Ohio

I keep hearing people say they have 2-4 week vacancy periods between tenants, and I don’t get it…It seems like if I have a tenant move out at month end, even if I show it to a prospective tenant the next few days, they can’t move in the following month.

Example: I had a tenant move out Oct 31, did some touch ups, and showed the house the first week of Nov. almost everyone looking said they’d move in Jan 1. I ended up getting a tenant for Dec 20 so she could move before the holiday.

It’s difficult to show a new tenant the house when the old tenant is still living there, and when I was renting I don’t remember ever being asked to accommodate showings for my landlord. Is this common practice now?

0 Votes

I am renting a single family home and found an unmarried couple who is incredibly interested. One applicant makes 3x rent and has a 792 credit score. The other applicant had a bankruptcy in 2021 and has active trade lines (I can’t see the detail on when these went into collections).

I intended to write the lease to hold both financially responsible regardless of occupancy (effectively making her a co-signer), but I’m worried that I’ll end up evicting him if she ever does move.

Overthinking it? They are otherwise ideal applicants.

0 Votes

Dayton, Ohio

This is a tough one. I’m in Ohio, so I can purchase a property with $40k cash out, invest $10k in repairs, and rent for a couple hundred above the monthly operating costs. It’s quite appealing as a long term investment - even at today’s rates. My excess cash flow per year is around $300k in cash, meaning theoretically I could do 6 deals, but in order to make that salary (HHI $722k) I need someone with the time to do the repairs and manage the tenants. He has been alongside me on the other deals so I’d like to give him equity/skin in the game and I don’t know how else to do it

Quote from @Basit Siddiqi:

Getting a property with a partner / friend will not help you from getting hosed on taxes.

I wouldn't move forward - You mentioned beng a high income earner so your hourly rate is very high. This arrange that you will have will likely be a headache(major assumption on my part).

First - Do not do business with a friend.
A partnership requires three things to be successful - Experience, Capital and Time.
It looks like you have the capital and experience but maybe not the time.

I have my doubts about this working if you have a friend who has weak credit and a limited cash flow. That likely means that they are not good with money management which you are likely expecting from him.

To answer your question, if you are doing long-term rentals, the LLC taxed as a partnership is likely the go to route.

Best of luck.

0 Votes

Dayton, Ohio

I’m hoping to purchase a few properties with a friend/business partner but after meeting with a lawyer am even more confused. Any advice on what setup is easiest and most tax advantaged?

I’m a high income W2 earner getting hosed on taxes (currently own 5 properties). My business partner owns a roofing company but has weak credit and more limited cash flow.

4 Votes

Dayton, Ohio

All Forum Posts by: Melissa Stanley

Melissa Stanley has started 4 posts and replied 6 times.

Post: When to overlook tenant problems

Post: When to overlook tenant problems

Post: Long vacancy periods

Post: Bankruptcy on one applicant?

Post: Starting with a Friend (LLC?)

Post: Starting with a Friend (LLC?)