All Forum Posts by: Robert Brubaker

You asked about things you need to consider. In this

light several Issues Without a PM how are repairs to be

considered and then funded?

Without a PM who is going to make

Notices,,filings,,and Prompt payment of Bills?

Without a PM Who will keep abreast of

current affairs,New Laws,Municipal stuff

changed procedures?

No matter how you "slice it" even if you

are willing to stay involved you are not

properly positioned while " deployed" .

Good PM's will pay for themselves

in avoiding losses from" slippage" on

a number of fronts. Just make sure the

management contract covers your needs!

Go" do your thing," Keep Safe, return to

stable circumstances! Consider a PM!

Going In you always want to be conservative in your income estimates

and very liberal in anticipated expenses! You can also apply

several quick tests 50% test, CASH on CASH %return,etc. . Biggest

factor to keep in mind is you will be adding YOUR Debt Service expense

to operating costs not what the current owner lists against current rents

for a rough NET. If things don't easily work in the positive that makes

sense- Move On! Never " make it work" at this point!

Ps. Heat and Water Expenses can be killers You must be absolutely

certain about these!. You need Water Bills for Water, Gas,Supplier Contacts.Acct#s,Oil Supplier Contact and last two years billing.

The whole 9. Any offers always contingent on your review and approval of

your findings. Best For Success!

Sam I see two different directions here. If you are trying to

" flesh -out" the former owner's plans his papers will help.

If you are trying to get the City to " Sign-Off" on Compliance

you probably will be heading in a different direction.

You mentioned the order to restore to " original design

layout" This suggests that the City wants no part of the

"unique" modifications!

The City has already "Red Tagged" the place and it's

the current Officials you are going to have to please.

Easiest way to go is to " bite the bullet" by having a

Re-Inspection- laying out what they will accept- and

using this information to decide on the merits of

going forward. They don't have to show any of the

"history" to determine compliance and are free to

include anything else they see now that they have

cited the property. What it will take to obtain a " sign-off "

is what matters. Best to go to the " Source".

Best for Success!

A situation like this is not for the Tenants to figure out! You

are lucky the top floor cares enough to complain!

Consider the dynamics: The Problem Son Comes with the

Mother! As far as you are concerned this is ONE! If she won't

take responsibility for correction-fine: Eliminate the problem!

Start your paper trail of Notices of Violation, turn the " Heat-up"!!

anyway you can .Time only makes this type of scenario

cost you more! Your business interest alone should compel

your attention. This is not about " tenant Squabbles". This type

of condition calls out for you to ensure the " Quiet Enjoyment"

promised in most leases. There's a lot more to lose than the

upstairs tenant. Play it smart " keep your ear to the ground"

on this one" The Landlord/Tenant relationship involves more

than the " Bricks and Mortar " of the Unit. Others take heed!

You seem fixated on the prospects for making

a " silk purse from a Sow's ear". You only have

an older "conversion" for starters..

Further, I wonder what cost of plumbing, heating,

and Electrical upgrades would entail., let alone

the cost to "frame out" the new ownership " Doc's

You are going to need a Huge cumulative value

just to pay for such "inovations'! Assuming any of this

is possible!

My view would be that such a " worked over " property

would place you further away from your goals of

" residuals" and added value, Raising only " Red Flags "

For Buyers,Renters and Appraisers going forward.

You are smart to be concerned! For setting -up you

might want to get the advice of an attorney.

Practically speaking you both may want to have some

distance between you and your tenants -legally. As to

Insurance protection: Don't leave home without it! Look

at this concern from all angles both how you structure

and Protect! Best for Success!

I am not saying don't do it but I would want to look

at a couple of supporting issues.

1, At 23 and new to tenancy responsibilities ,what

is the motivation to pay for a whole house. Who else

would be living there?

2. What work History does this applicant have and what

are the prospects for future employment?-Verify

3. What about the parents as " Guarantors" ?

I'd just want to be certain that I am not taking on a " nice guy"

who "doesn't get it" who's response is going to be " Oh I didn't

Know" anytime there's a problem. The parents paid for his

car-did they put it in his name? Who pays the Insurance?

Get secured as you see fit but let him Know there are no excuses

to be entertained! Leasing is a serious responsibility and

his obligations both for " Form" and "content" in leasing

have to be met! Best of Success!

Just from the responses you see so far you should

get the picture: " One Size Does Not Fit All"

The return on investment from Low Priced but High Risk

Property usually requires a substantially greater commitment

of Time and Resources and Hence only a greater ROI would

justify the involvement !

Realistic assessments of the need for "on-going" levels of

both Management and " Bricks and Mortar" support over the

term of the "Hold",.Your Comfort Levels for" Exposure"as well as

" Direct Invovement " all have to be factored in.

The Playing field for Buy and Hold today commands either a

compelling set of future trends and anticipated positives for the

term of the " Hold" or almost " Iron-Clad" stability .in venues

not expected to experience changes in use over time. Take the

"High Road" or the " Low Road" neither one is the same for

all travelers! Best for Success !

A 20 year holding period? WOW!

Thanks for sharing. Good discussion piece!

Reminder of Different investment strategies and Goals.

One " investor" sees buying to "operate" for Profit on Rental Income.

Another Investor buys for "Profit on Margin for Re-sale". Others

A combination in" Buy-Stabilize-Resell",etc. No one best way,

" Different Strokes for different Folks" ! Can anyone come up

with a spreadsheet on just being " out here " over the next 20 years?

Best to All!

The others have pretty much given you positives on

these candidates. I concur. If you are still unsure- follow-up

on a local reference or two . This should clear up uncertainty

left.

In the absence of conventional " hard" credentials, Candidates

with apparently Good credentials may be evaluated using

" Character Underwriting" techniques , direct verifications, and

evaluation of reasonable representations.

The idea is to select good tenants not to worry that " one

size " of review" doesn't fit all"

For what it's worth you might be interested to consider that

the use of " in the Box " tenant selection criteria is relatively

new. A tally of factors "in "and" outside" the generic reports that

many rely on and consideration of " compensating factors"

as well, brings the best results. Good selection is as much

an art as it is a science. For the most part we are selecting

out good choices -not sure bets. Look at what you have against

what you don't. Best for success!