All Forum Posts by: Wesley W.

Hi all,

There is a distressed property I have had my eye on for several years that is in extremely close proximity to a property from my childhood, and an area I would like to own in. I have written a personal letter to the owner once every six months over the last several years, asking if he wants to sell. I include a photo of my family and explain my desire to own in this area I have fond memories of. Sometimes I include a personal check and a P&S agreement with no contingencies. I have never gotten a response.

This gentleman lives out of state and is 96 years old.  He has not been to this property in several years.  I am told from the person who mows the lawn that he does not have a phone, and she only hears from him once a year or so, when he mails her a check for her services.  She says she knows of a cousin who happens to live in the same state as the property, but apparently he had a falling out with him and they have not spoken for many years.  

I'm not sure if there are any other next of kin; he has no children or spouse.  I wonder aloud if he is incpacitated or in assisted living at this point, or has someone that is taking care of his financial affairs for him. I'm looking for advice from the folks that find these kinds of deals all the time, and how best to proceed.  My worry is that the property might fall into probate or tax auction once he passes and someone who knows someone will get the deal under contract before it reaches public offering.

There is a real estate agent in the area that gets about 85% of all the listings in the micro-market, so she is farming these properties constantly.  She buys them distressed, renovates them, and then sells them herself for top dollar.  I am sure she is sending him letters (or using other methods to contact him) as well.

I'm a small long-term buy-and-hold investor myself, but this property is about 4 hours away from my own market, and would be used personally by my wife and I if we were to acquire it.

I'd really like some help from you large operators who work these deals all the time, as to how best make contact with the owner and see if he were interested in selling.  I'm reasonably certain this owner does not need the money, so that's probably not a motivating factor.

Please help David beat Goliath to the punch.  I'm anxious for some feedback and advice on how to get the best opportunity to acquire this property.

Thank you in advance for sharing your experience!

 Understood.  Thanks for educating me.

I've had just those very issues.  Here's my lease language:

(k) Yards, patios, balconies, vestibules, hallways, and entrances may not be used to store belongings or to dry clothes. Only appropriate potted plants and other outdoor furniture are permitted on patios, decks and balconies. Grills may not be kept or used on or under the wooden decks, or within 3 feet of a building. No fire pits, bonfires, tiki torches, fireworks, or other outdoor open flames may be used or stored on the Premises. We may further limit what is placed in outside areas.

(o) The yard is a shared common area for the enjoyment of all residents; lawn furniture and other items stored in the yard are subject to use by other Tenants. Items intended for private use may not be stored or placed in the yard. Any items/furniture in the yard is used at your own risk. The yard is not secure, and may not be used as an enclosure for pets.  

(p) Non-furniture items may not be left in the yard. You agree to be solely responsible for items that are damaged or damage that is done to power equipment from those items during lawn service.

It's probably a good idea to run this by your attorney as well.  They may have some other ideas/verbiage that might improve upon the above based on your particular concerns.

In your long-term rentals, which do you prefer and why?  What are the pro and cons of each?  Which is more durable? 

I'm building a closet, and trying to decide which kind of doors to use.  I don't think the room entry door's position/inswing will impede either kind of closet door.

Thanks in advance for your input.

What would a lot rent deposit be used for?

The reason I ask if it used to ascertain damage to something on the lot (water/sewer/utilities hookups or something) and you don't have pics and mutually signed documentation from the lessor/lessee upon each tenant's move in prior to your ownership, would you be able to justify a charge upon move out?

Or is the deposit used to pay a delinquent balance? I don't think tenants would abscond with their mobile homes under the cover of darkness without paying.  Or would they?

I wouldn't offer any discount.  An incident occured upstairs, not due to your negligience as a landlord, and you are responding appropriately and having the damage repaired.  Not every inconvenience in our life is someone else's financial responsibility.  Life happens.

You could try and coordinate the work times between the handyman and the downstairs tenant, but I think that would be impractical for your tradesman.  My lease says we have a right to enter at reasonable hours to conduct repairs, inspections, etc.  I would say if the work is being done between 9am and 7pm weekdays, that is reasonable.

FIRST: This is ALL dependent upon your state and local statutes, so make sure you know what you are permitted and not permitted to do in your market with regards to terminating a lease.

And your post is written by someone different about once a week here on BP.  This is reason #42 why I only offer MTM leases.

Now that that is out of the way, if they are on a term lease, just give proper notice to terminate based on your lease verbiage and local laws(!).  Many markets allow landlords to terminate a lease (i.e. not renew) for "any reason or no reason."  I would NEVER, EVER offer up a reason to a tenant - minimally, you'd be subjecting yourself to an unsolicited argument/negotiation, and could be opening yourself up to a discrimination claim or other such legal entanglements.  If pressed, I would only offer "we made a business decision", but even that is going to prolong a conversation you would prefer not to even have.  If they are on a MTM lease, you can terminate now with proper notice, as that contract renews monthly.

The RIGHT way to handle this is to issue a legal notice to terminate as soon as you are able, and continue to conduct yourself in a professional manner with this tenant. You also should prepare yourself (financially and otherwise) for this tenant to holdover at the end of the term. Just make sure you have your attorney ready to go to initiate a summary proceeding to evict as soon as they do not vacate.

I would not try and drive them out with an unrealistic rent increase.  That may backfire, and it will only antagonize the tenant when they realize no one else in the building got anything near a high a raise (see "discrimination lawsuit" exposures, above).

Others may disagree, but I am with you.  Life is too short to have to put up with these kinds of people in this business, even though this may cause you a short-term interruption in revenue.  Months from now, you will be glad you did.

Good luck.

Candidate 1: pit bull is a liability for you, regardless of tenant's insurance; paying a year in advance is a red flag -  @Theresa Harris is right.  Very tricky to unwind a contract that's been paid in full.

Candidate 2: families will usually stay longer, but possibly more wear and tear; minor concern about small business vs. W2

I would pick #2.

With the typical proviso of checking your local laws for compliance, I would terminate their lease.  This kind of thing is reason #42 I only offer MTM leases.  If they are on a term lease, give proper notice of non-renewal.  If their lease has reverted to a MTM, give proper notice and terminate.  You do not have to (and should not give) a reason to terminate.  Any excuse you give (you SHOULDN'T) will be met with challenge, bargaining, threats and sob stories.

These people are wasting your time and driving away other customers in your business, and making trouble for you with the municipality, to boot.

You're also being too soft and they can smell it on you.  You are running a business.  For your next tenant, your only "reminder" to pay rent should be a 3-day rent demand notice posted on their door (or whatever local statute dictates).  Everyone signed a contract.  No "reminders."  I rent to adults.

You have already spent too much time and energy on these people.  They and their ilk will burn you out if you don't take back control of the helm.

Good luck!

This is a great time to update your lease to (a) a month-to-month contract, so that you can ask anyone to leave if they are messing up the feng shui, and (b) add a non-smoking clause.

I have written extensively on the merits of MTM leases here on BP, so you can read about my rationale if you'd like.

Here's my non-smoking clause:

SMOKING: Smoking is prohibited inside your unit or in any interior common areas. This includes marijuana as well as electronic cigarettes (i.e. “vaping”). You agree to pay an additional $200.00 lease violation fee each time we determine, at our sole discretion, that smoking has occurred in your rental unit, due as Additional Rent. Payment of this fee by you does not represent a waiver by us for this breach of the Lease. Smoking leaves soot and deposits, so an additional cleaning/remediation fee of at least $250.00 per room/area will be charged if we determine that smoking/vaping has occurred. Any cigarette butts from smoking outside by you or your guests must be picked up and properly disposed of.

Credit to @Nathan Gesner and Andrew Schultz for some of the verbiage.