All Forum Posts by: Patricia Steiner

Document, document, document...you'll need photos, receipts, and proof that the damage wasn't just 'normal wear and tear." The lifespan of a stove is 10-15 years; the tenants were there for 8 years so charging them for half of a new stove will probably not hold up if challenged.  You will also need to tie back each offset to a lease term such as was the tenant responsible for rat/pest control per the lease?  Was smoking prohibited per the lease?  If smoking was not prohibited, the burden for offsetting will be greater and require more documentation (after 8 years residing there, the allegation that the paint was damaged from the smoke - versus time - will be difficult to prove).  

Expect the tenant to claim that the damage noted was there when they  moved in and that you were a horrible landlord in that you would never make repairs, etc.  You will need to address those charges analytically (collect all communications from tenant for maintenance repairs).  

Offsetting a security deposit is not a happy event for either landlord or tenant.  I recommend - going forward - to require renter's insurance with landlord as additionally insured coverage in addition to the security deposit. An 8-year term tenant will be given more lead way and the argument for wear and tear over 8 years will be the defense against your offset.

Hope this helps...sorry you're having to deal with this.

@David Sohn

In response to your mention, I would recommend, as did an earlier contributor, that you do business in your market rather than to go shopping for a state that you would have little to no knowledge of and it's laws. To venture out-of-state at this early stage of your business adds complexity and chaos that you simply don't need when the focus should be on building your reputation, credibility, and knowledge/skill set.

The Tampa Bay market and Florida in general is in a housing crisis and inventory is at historical lows - and has been for a decade. You're already in a really big pond there in Texas; carve yourself a niche and get disciplined on learning.  I am not an advocate of wholesaling; real estate is expensive enough without adding in a middle man who adds no value.  Consider getting your license and/or entering a different segment of the industry.  

Hope this helps...

Show up.  You're in a city that is filled with investors/landlords/contractors/builders.  Stop by job sites and introduce yourself; it may or may not be too late for that job but be known for the next.  Don't forget to go by tile, paint, lumber stores - and introduce yourself to those people.  Invest in being known/visible and then be the best trade they've ever had.  

Go where your future clients go...

@David Sohn

You 'unluckily decided?"  

No words...okay one:  STOP.  

I recommend finding the opportunity first - and then deciding the best way to acquire it since you have options. Depending on where you're located, the opportunity for a BRRRR might not exist at the moment. I know in my market, that ship has sailed. There are a lot of ways to be part of the real estate industry and become a 'serial investor.' I would explore those. I just see BRRRR in many markets going the way of the 1% rule and more - and that's gone/poof!

Congratulations on being an investor already (owning your home did that!) and for the equity you've built. Sometimes opportunities pop up when you're not expecting them so think broader than BRRRR.

Best...

You're asking if it's worth it to the lender to refinance that small balance - when you might want to consider if it's worth it to you.  Closing costs on a mortgage aren't exactly a cheap date.  You may want to look into other financing options that may avoid the need for an appraisal, new title policy, and more.  A commercial loan (not mortgage) where the property could be pledged as an abundance of caution only or a credit line might be better options.  

When you consider the cost-benefit in terms of cash flow, you have to consider how long will it take to recoup closing cost expense associated with the refinance.  I would look at rent price increase and additional income streams from the property (like laundry, parking, more) to improve cash flow rather than a future mortgage paydown/refinance.

Just one opinion here...

@Jack Quin

The #1 reason why landlords fail - according to the American Apartment Owner's Association - is failure to manage to the lease.  The first time - the first day - a tenant is late, act.  Partial rent is not rent and in many states it negates your right to evict (it does in mine).

And, having said all that, the tenant's failure to pay rent isn't your fault but it doesn't have to be your issue either.  Bet he's paying his car payment and his cell phone bill.  Time for him to understand that paying you on time isn't an option...he will have to choose someone else to late pay.  Hopefully your notice will let him know that he's misinterpreted your patience and kindness - game over.  

May the force be with you...

@Alexander Parunin
I wish my post was an exhaustive explanation - but it is far from it.  And, no - you cannot pull a permit on a NON-OWNER  OCCUPIED property unless you are a GC.  Investment property owners are not eligible to act as their own contractor; only those owners who agree and certify that they will not sell and/or lease said property for one year have that option.  All of this is readily available online for your state (http://www.nvcontractorsboard....)

The bottom line with all of this is once code enforcement knows you exist, you're on the radar.  And, once you're on the radar, you can expect to be "visited" frequently. It is actually cheaper to pull permits than to have your project stopped, pay the fines, and endure court hearings before the magistrate court.  

It's hard to overcome stupid.  Don't date code enforcement...

I like SFH as investments; so does institutional investors. It is estimated that Wall Street owns 40% of all SFHs in the US. Why not hang with the big boys! There's a lot available online about the change from MF to SFH by institutional investors and the reason for it. Here's one article that you may find interesting: ttps://www.cnbc.com/2023/02/21/how-wa...

Real Estate is about leverage. You should look at your mortgage payment as 'what is paid by the tenant' through their rent - in addition to your profit. The interest rate is not the driver here; it's the ROI.

Be sure you know the market you're considering - to include the year-over-year property and rent price appreciation.  If a market doesn't have both, reconsider.

Hope this helps.