All Forum Posts by: Adam Meckler

@Drew Sygit thanks Drew. What you describe is definitely something I've been imagining could happen. Especially as we work to fill the unit next door. I talked to a lawyer this morning. Appreciate your feedback. 

@Chris Seveney thanks chris. Hiring a property manager has been something I've been considering. Appreciate your advice. 

OKAY here we go. 

I bought a fourplex in a small town in the upper peninsula of Michigan in February with plans to keep the tenants in the bottom two units happy, and renovate the top two units (which were in total disarray) within one year's time. My business partner and I are doing the Reno ourselves so it is taking some time but it's coming along. 

I inherited leases that were five years long. I know now that this is a red flag. Won't be buying leases that long again, ever. In the lease there is a clause that with increases in taxes and insurance, rents can be increased. 

Taxes and insurance increased significantly when the building changed hands because it had been the same owner since the 60s and their taxes were capped. 

The bank estimated taxes to be wildly high, something that both surprised us and caught us off guard. I sent a letter with 60 days notice to raise rents based on those estimates (and included the bank's estimates in the letter). I am just starting out (we own another duplex we bought the November before and that's been super smooth even with rent raises) and did not know that you could go to the city assessor and get the actual numbers for taxes (which it turns out were much lower than the bank's assessments...which was good for us! I was happy about that!). 

As soon as I was made aware of my mistake I told the tenants we would NOT raise rents until we've confirmed the lower amount with the village. We had an in person meeting where my tenant from Hell threatened to "beat my ***" more times than I can count. I'm a people person and generally get along with everyone so this energy, especially after I apologized for the mistake and agreed not to raise rents until we know the correct numbers, was a little jarring. 

Since then this person continually calls me a liar and a coward on his envelopes he uses to mail his rent checks. When he sees me he continues to threaten me, saying I'm constantly lying and am incompetent, a douchebag, "I just want to take you in the back and put my foot in your ***""Beat your ***" "fold you in half" etc etc. 

It feels silly to even say it here. Why am I so affected by this? Should I just be able to let it roll off and keep cashing his checks? It's honestly causing me a ton of stress. He does seem unstable, and I have a wife and kids and don't want some crazy person to decide he's going to end me because he's built up a whole narrative about who I am. 

Anyways, he hired a lawyer before we could get actual numbers from the village and suggested his own rent raise amount. We immediately accepted and agreed to pay his lawyer fees for drafting the letter (we paid $1200). 

So this tenant's rent is slightly higher but it's still almost half of what his apartment can get market rate. Thats fine. I just wanted it to be over with. But the threats and accusations continue.

After being in the apartment adjacent to this tenant in order to take pictures and list it as an open rental, he accused me of messing with his back door. He must have heard me open the back door of the other apartment and walk into the back shared storage space, all in order to take pictures for the listing. Obviously, I never touched his back door but he just continues to accuse me of that and call me a liar when I tell him exactly what I was doing. 

sigh maybe you're all just my therapy right now, but how do I handle this? I've taken pictures of all of the envelopes he sends, and I have voicemail messages he's left that are threatening saved on my phone. 

Is it worth looking into a restraining order and eviction? Is that too crazy an action given that he still is paying rent each month? 

I'll never claim to be perfect. I made a mistake when I didn't go to the assessor to ask about taxes. I haven't claimed otherwise. I knew there would be some learning curves getting into real estate in my 40s. I'm continuing to get better and feel pretty good about where we are, aside from this mess. This situation has just taken a real toll on my mental. 

Any advice from the crowd? Sorry for the book, appreciate any advice you can lend. 

Hey thanks for this thoughtful reply. Really appreciate you taking the time. Meant to say thanks months ago and forgot. We were able to raise rents there, as there is a clause in their lease stating rents can be increased based on increases in taxes and insurance. However the tenant is in a five year lease that is up in 2028 and their rent is still wildly low compared to what we could be getting. It’ll be a while before we can renovate the space and get new folks in there at market rate.

Way to get in the game!

Hey everyone! I am new to investing in real estate, sort of, and a long time listener to BP pod, but first time being on the forums. I'm a professional musician and have dreamed of being in the real estate game for many years while I read books and listed to pods on the subject. The dream for me is to eventually free up my time and have enough income from real estate to be able to pay for my music projects, travel, etc. 

We've had an Airbnb out of our primary residence basement for 2.5 years. That space beats our mortgage on average, which is rad. We used a HELOC on our primary to purchase and begin renovations on a duplex nearby, and just this month closed on a fourplex that has a couple units rented, and a couple that need full demo/flip (which is now in progress).

I'm taking some big swings and really having a blast doing it. Just wanted to say hi and that I appreciate this platform and all I've learned listening to the pod that empowered me to make these moves. I'm sure I'm making some mistakes but I'm in the game and having a blast. 

We're investing in the Upper Peninsula of Michigan. I'm a tenured professor in the music department at Michigan Tech University and lead my own bands and play with some folks it's possible you've heard of. 

Woot!

Hey all! Im new to the game. Have had an Airbnb out of our primary residence basement for 2.5 years and bought a duplex in November after taking out a HELOC on our primary to use for the down payment and some renovations.

We also recently closed on a fourplex as a partnership with a friend. Used enirely OPM to buy this one, and borrowed money from a family member who is in commercial real estate to do the renovation. (I have experience raising money as a professional musician so this came somewhat naturally to me). 

The duplex is rented well under market rate ($600 on each side. 2-bed apartments), and the fourplex has two rented units on the lower half well under market rate ($475 on one side, $600 on the other also 2-bed apartments). 

Market rents in this area for those size units are closer to $1,100 (a little more, actually).

Previous owners owned these spaces for a very long time, so their taxes were low and those rents were manageable for them. These rents do not cover mortgage/insurance/taxes as it stands now. Plus, we're investing heavily in each property with the intention of doing a cash-out refi within two years of owning each one. 

OKAY. That's pretty much it. Any advice on how to raise rents? 

I was planning to send letters explaining the higher cost in taxes, market rents in the area, and then offer a gradual raise to meet in the middle somewhere. Yeah? No? Appreciate you all!!