All Forum Posts by: Rob Gleason

This is our 3rd month into our new real estate business.  Here's what's been going on:

Of the 4 units we have renter #1- pays on time, no issues.  Renter #2- has yet to make a timely rent payment, and is about to be late for this month.  She owes $140 in late fees as well.  Lease is up in 2 months.  We will not renew her.  Renter #3- pays on time but COMPLAINS ABOUT EVERYTHING. Mind you, everything he complains about was present when he signed the lease with the previous owner.  I replaced all his windows because we were upgrading the unit next door and I also offered to touch up the paint in his unit too.  He gave my painter such a hard way to go that I ended up canceling that part of the job.  LESSON: don't offer any favors.

Ok, so that brings us to renter #4- our empty unit.  The work schedule got set back almost 2 weeks due to the weather so we're going to be down 2 months rent.  The before picks are in my previous post: Newbie rental diary.  Here is were we are now:

My guy created that patch in the hallway floor.  Previous owner had a piece of plywood in there.

With the updates and fixes we have about $54k into the property. I expect to spend another $3k to clean up the other unit once it's empty.  We'll  get at least $650 for this side and the same for the other side once it's updated.  We will begin the vetting process for the new tenants this week. 

Congrats on the flip and welcome to bigger pockets!  Looks like your off to a great start. IMHO, it's extremely important that the first deal be profitable.  

This looks kinda expensive to me, even before you factor monthly expenses: taxes, water, sewer...etc.  AND  $55k for repairs?  An all cash offer is always a motivator but in this case that still might not be enough make this a good deal for you.

 Such as , say, lending it out as hard money?

I agree. Didn't know you could have condos without an HOA. How does that work?

I'm no lawyer, so no legal advice here, but it seams to me the tenant DID report the problem so he fulfilled his obligation.  One might argue that you did not respond in a timely manor, resulting in the damage to the pipes.  I agree with Michael, just fix it and move on.  I don't see how you win the argument and you're liable to piss off what otherwise is a "good tenant".

 Agreed.  Our screening process will be by the book - backround , credit check and references.  If possible a drive by their current residence might be in order as well.

@Bryan N. We inherited those tenants and knew there was gonna be a mess when we got rid of them.  That's why we got it so cheap :)

We are now 60 days into our new business and it's getting a bit more complicated.  

Duplex #1 - tenant "B" eventually payed last months rent but is late AGAIN this month. My wife  ....er, partner doesn't want evict because tenant is a single mother and according to the prior owner she always pays but she is always late. There's 2 months left on the lease and I don't thing we will offer a renewal.

Duplex #2 - Tenant "A" no problems: young pregnant couple that pays on time.  Tenant "B" has been in violation of the lease by keeping 2 small dogs in the house.  They're lease was ending February 1st so we gave them the option of $300 pet deposit + $25/mo rent increase or get rid of the dogs or move.  They moved and we kept the security deposit due to the absolute FILTH they left in the appartment.  Now we are renovating, which I wasn't planing to do for a few months but we couldn't let the opportunity of an empty unit pass us by. After we tossed the garbage and ripped up the carpet and linoleum this is what we have: both bedrooms have water stained hardwood floors, bathroom and halway floor rotted, mold around bedroom windows, 6 of 8 windows are broken/damaged, duct work for HVAC is damaged.  Oh, and I've never seen so many roaches !  All totals about $8k in repairs and updates, bringing our total investment to $54k. On the plus side, we think we can rent for $600 - 650 once it's done (current rent was $490).  We put up flyers locally and a sign in the front.  Got 15 phone calls in one week and only 3 said the rent was too high.  Plan is to do an open house around the 24th and pick a tenant by the 26th, with lease starting March 1st.  Is that too ambitious ?  Do we need more tome to vet the applicants?

 Expenses = landscaping, water + sewer.  I tried to be conservative with this number.