All Forum Posts by: Mike Adams

A tub may be best if there is none in the home since young families may want a tub in the home for young children. You can get an entire shower enclosure set for around a grand in Lowes or Home Depot. Remember, you are designing this for a flip, not for you and your family to live in. Consider taking a look at other homes on the market in your area to see how they are designing their homes for resale. Keeping material costs down is paramount.

Hello @Filipe Pereira, We installed remote thermostats that we can control, but if we do not monitor it, or basically check it once an hour, they raise it to 78+. Yesterday, it was at 82 before we brought it down to 70.  We can lock them remotely, but I am not sure how the administration would view that.  I will add, as soon as we took the building over last February, we sent a team in to seal any and all cracks, add insulation to help lower the energy costs. I know when we do our quarterly walk through, the tenants are wearing basically a t-shirt and shorts nearly all the time. They also do not speak English, which we're using Google Translate to converse.

@Peter Anderson thank you for the info. I've submitted the request for the 1st tenant to the case manager as I have confirm that we are renewing the lease; which we are but I added a request to raise the rent by $80.00 to cover the increased utility costs for that unit. They are paying around $2100 now for a 3 bed, 1 bath unit. I think that will be approved. The second tenant is a bit harder. Same type of unit, 3 bed, 1 bath at the same rate, but we cover their gas and electric. Thus, we have to ask for an increase of roughly $280 per month since her gas use is so much. They also keep the heat at 78 degrees all the time. That's why it's so high. I know it's a big increase, but the utilities in her unit alone cost over $3200 a year; which is not sustainable. I am not sure if they would approve that rate, but I think I have to try. As I listed in the OP, I raised the other tenant from $1000.00 to $1350.00 per month in December. I originally asked for $1800.00 for 2 bed / 1 bath, but settled on the $1350.00.  While I hope I do not lose the tenant as it's nice to have the gov't guarantee, losing 3k+ a year is unsustainable.

I happen to like the Springdale neighborhood.  We actually just closed on another 3 unit a couple months ago. It has a separate building that's being used as a workshop / garage. Has water, gas, meters, etc. It would be great if we can turn it into a residential unit. The realtor we used said we were grandfathered in under old rules, and he doesn't think they'd allow it. The building is nearly as big as the main building with the housing units. If you have any thoughts on this, I'd love to pick your brain on some ideas. It's currently being rented out as a workspace, but it really can be so much  more if the City of Stamford would allow a conversion.

100% HAP contract.  I have it right in front of me.  The case worker stated to me that the tenant must agree to the increase, then they'd okay the increase.

 I wouldn't normally as I already did have the rent raised on the top floor with no issues. Since we have the pandemic, and little recourse on our end, any small landlord would have cause for concern. After all, I only have five buildings. Years ago, we did use Real Property Management before, but they were horrible. I've come to learn that property managers in our area are mostly not looking out for their clients and only their bottom line. Since taking it over in-house, rents are on time, we have a good maintenance team, and everything is computerized. We even have an emergency number where tenants can call or text and we respond within one hour.  It wasn't hard to add to my current business, self-storage, so the learning curve wasn't that big of a deal. Dealing with tenants playing games in the pandemic, we'll that's a different story. Thank heavens we've only had two tenants who played the game. We placed one on a payment plan and another magically started to have money come in after a letter from our attorney. Funny how those things work.

I also have a heart and that's the biggest issue. I feel bad raising rent during a pandemic to low income housing. I've been able to lower the heating bills a little bit, but not enough when the heating bills are 200+ a month. I guess I am looking for advice to either have that conversation with the tenants this year or wait until next year when the pandemic is gone.  The building still needs work, so it's not rent ready to receive 2500.00 per month or more. I've dumped about 40k into it in repairs thus far. I cannot turn over and upgrade the units until people opt. leave. I would think, each unit would need 5k - 7.5k and the hallway needs another 4k for updating. Again, hard to do during a pandemic and people still there. The building is in the Springdale neighborhood.

Springdale

I purchased a 3 unit building in Stamford, CT last year prior to the pandemic.  The current tenants have lived there for 10+ years, one was north of 15 years.  One tenant pays somewhat market rate now as I raised it from 1k a month to 1.3k a month for a 2 bedroom unit.  The other two are 3 bedroom units paying around 2.2k per month; which isn't bad.  However, both tenants are HAP contracts which renewal annually.  The 1st floor pays electric, but I pay their nat. gas.  The second floor doesn't pay any utilities, and I pay for them all.  During the Fall, Winter and Summer, the utilities run around 150 - 200 a month.  During the winter, due to heat, they jump to around 600 a month.  I've weatherproofed the units and upgraded the thermostats, but the energy bills from December - March are still very pricey.  I have no issues with the 1st floor tenants as they are nice, pay on time and was even open in raising the rent.  However, with the second floor, the utilities are crazy high.  I was originally going to have the tenants move out prior to purchasing, but them the pandemic hit and I kept them since it was guaranteed income from the HAP contracts.  I was going to ask to raise the rent by $60.00 per month this year to help with the utilities. They would probably refuse and they could even stop paying the rent.  Under normal circumstances, one could evict. However, we all know this is not possible now.  The units and building need some work to bring up to date.  The last landlord did nothing for 15+ years.  So far, I've replaced the siding, updated the electric and repaired the roof.  I've also added washer and dryers to each unit for the tenants as well.

Any suggestions?

I've had them transfer to a sep. account being setup.  It was an additional few hundred dollars, but certainly worth it I guess.

I signed a lot of documents, but not sure on that.  As per their website: https://www.ipx1031.com/the-ro...

Holds Exchange Funds
The Exchanger is prohibited from having actual or constructive receipt of the proceeds from the sale of the Relinquished Property (exchange funds), or the ability to pledge, borrow or otherwise obtain the benefits of the exchange funds during the exchange or those proceeds will be taxable as boot. Treas.Reg. 1.1031.(k)-1(g)(6). IPX1031, as Qualified Intermediary, will hold the exchange funds in a separate bank account for the benefit of the Exchanger until the funds are used to purchase the Exchanger’s Replacement Property.