All Forum Posts by: Jennifer T.

Interesting to read all the responses.  Definitely a "your mileage may vary", depending on the location.

I just had a vacancy in New Orleans.  Zillow is one of the places I post.  It didn't mention anything about charging now or in the future, so apparently I'm "safe" for now.  I would laugh in their face, if they did charge.  At least in my market, Zillow/Trulia/etc. has become almost useless.  Craigs List has been useless for years, though it was my go-to when I first started.  Over about two weeks, I got less than 20 initial responses from Zillow and their affiliates.  That's "total", not each.  Of those 20ish responses, only 3 set up a showing.  And none of those people showed up.  That's been the typical experience for the last couple years.  At best, I'll get 2-3 potential tenants who come for a showing.

Over the last two-ish years, Facebook is where the vast majority of my good inquiries and tenants have come from.

Of course, if I actually got valuable leads from Zillow that led to where most of my showings/tenants came from, I'd consider paying to list there.  But I don't.

Since she has chosen to stay in the home, as someone who lived without heat/hot water/stove for 6 months, I will pass along some tips for her.  I was a renter living in New Orleans when Hurricane Katrina hit.  The flooding also flooded the gas lines for the area I was living in.  And it was about 6 months before we had gas again.  And that was 6 months after we had moved back (end of Nov.).  I guess it was actually down for 9 months.  As an aside, I neither expected nor got a rental discount.  In fact, I was impressed with how promptly my landlady handled everything.  She needed to replace the heaters but, understandably, waited until the gas was turned back on.  However, once it was, the new heaters were installed promptly.  Of course, by then it was spring and we didn't need heat anymore.  But we appreciated she took care of it as soon as it made sense.

--Washing dishes:  Use a coffeemaker (for hot water) and fillable dishwashing wand.  Keep dipping the wand into the coffee carafe to hand wash dishes.

--Dusted off my slow cooker.  Used that and the microwave to prepare hot foods.

--For bathing, sometimes we used the shower but would stay outside of the spray.  Just get the wash cloth and soap wet.  Sometimes we would draw a bath with the normal cold water and heat up water in the microwave, in large Tupperware containers.  Pour that hot water into the bathtub, which would at least bring the total temp up to tepid.  If her stove is electric, that would be even easier to heat large amounts of water.

There are some good aspects to this deal, but you haven't accounted for any future repairs/vacancy.  When crunching my monthly cash flow numbers on a potential deal, I typically use 18% of the gross rent to go to account for those items.  In your case, that would be an additional $435/mo. expense.  And I did include the current rent for the unit you will be living in because you might have something break for yourself, that you want to fix.

General good advice, not necessarily aimed at you...don't fudge numbers to make a deal look better.  Accounting 8% for vacancy = 1 month of vacancy for 12 months.  Will most people usually do better than that?  Probably.  But it's better to be conservative with numbers...then not conservative enough.  Case in point.  I have a duplex I've owned for over 4 years.  Over that time, I have done much better than the 8% of rent that I set aside for vacancy.  Then I had to evict the tenant in one of the units.  She wasn't out until Dec. 11th.  Just in time to try and find tenants over the holidays.  Awesome.  I lost Dec. and Jan. rent, plus had to pay $185 to evict her.  Fortunately, I have new tenants moving in on Feb. 1st.  Still doing slightly better than the 8%

But the other unit that is bigger/higher rent?  Killin' it!  Only one turnover in the last four years and that one was only 10 days long between the tenants.  But, you never know.  

10% of gross rent for repairs and capital expenditures (capex).  Those are not a matter of "if", but "when".  Especially for a 4-plex.  Even if it is in fairly good condition.  For example, you might go a few months and not need to spend anything on repairs.  But now the kitchen faucet in Unit 2 is leaking and needs to be replaced.  The fridge in Unit 1 is broken and needs to be repaired or replaced.  Etc., etc.

Different buy/hold REIs might have different numbers/percentages than me.  But don't overlook these expenses just because they aren't a "fixed" expense, like a mortgage payment or property taxes.  

New Orleans, Louisiana (Orleans parish, ie county).  I've done five evictions, though two of them were at the same time for inherited tenants who both didn't pay the next month's rent after closing.  One of those five wasn't for non-payment of rent, but for refusing to comply with a 30-Day Notice to Vacate.

On average, an eviction takes 30 days from soup to nuts.  5 Day Pay or Quit notice posted.  Go to the City Hall to request an eviction hearing...$186, which includes service.  I've never hired an attorney, the laws are pretty simple and straightforward.  The court date is typically 10-14 calendar days later.  If the tenant doesn't show up or loses, they typically need to be out by noon the next day.  If they aren't, the LL/PM can file for a constable visit.  That typically takes about 1 week.  However, it is also not required.  Just heavily recommended by the court.  Whatever is in the unit can be put out on the curb.

The judge will often try to broker a deal between the litigants, if the tenant shows up.  But, unless the landlord/PM did something "off", it's always up to them if they want to give the tenant more time or not.  The other thing that is nice about that (not that I've ever done it) is, if the tenant and LL/PM enter an agreement that the tenant will pay $XXX by Friday (or ABC date)...but the tenant still doesn't do it...no need to start over!  Because the eviction is pending, unless the tenant follows through with the agreement.  At that point, I believe the LL/PM can go back to City Hall and enforce the eviction.  They don't even have to go back to court.

Keep in mind, all those dogs/animals may not have been ESAs.  People are allowed to fly with their pets (with restrictions), even if they are not an ESA.  But, if they aren't an ESA, the airlines usually charge an extra fee.   

No, I meant there are a lot of people out there, including potential tenants themselves, who don't understand what a real eviction is. For example, a property owner is selling a rental house. They ask the tenants to find a new place and/or give them a 30-Day Notice to Vacate. The tenants comply and find a new place within the allotted time frame. Of course, that is not an eviction. But the tenants might erroneously call it that because, to them, an eviction=landlord/PM tells them to leave. I've heard people misuse the term eviction dozens of time, both inside and outside of REI. It's right up there with my pet peeve of people mixing up the words "borrow" and "lend", which also happens frequently though I've never understood why that is.

I also wanted to add that it is probably not a wise decision to buy a 4-plex with no or little cash reserves.  Owning rentals is a serious responsibility of providing functional housing for people.  You never know when problems are going to arise or things will break.  If the heater goes out in the middle of winter, you need to be able to fix it or replace it.  Tenant loses their job and now won't pay their rent or leave?  You need to be able to weather that loss of income, while also paying for legal services and/or court fees to evict them.

I'd suggest looking for a different lender.  I'm sure you can find one that only requires a 20% DP on a non-owner-occupied property.

I've only heard of sellers helping with closing costs.  I'd suspect most/all lenders would not allow that to extend to the DP also or at least not that large of an extent of it.  But I don't know that, for sure.

Plus, when I bought my personal duplex, the seller concession could not exceed 6% of the purchase price.  With that said, I kind of did something like you're talking about when I bought it.  I wanted the seller to max out what they were allowed to for my closing costs.  My offer was $79K with $4700 seller assist for closing costs.  They accepted my offer of $79K, but only $1700 for closing costs.

More than one way to skin a cat!  I countered back at a higher price of $82K, with the same $4700 toward closing I'd originally asked for.  From the seller point of view, that offer was equal to what they countered.  But, for me, it was $3K more that I could roll into the loan instead of having to bring to closing. 

One thing I always like to mention is people don't always understand what the term "eviction" means.  I have even seen posters on BP misuse the term.

A true eviction is court-ordered.  And, just like @Kyle J. mentioned, that is really concerning because it means that someone couldn't pay their rent AND refused to leave.

But I have heard people say their landlord evicted them because the property was being sold.  Or something else like that.  Where, no, they weren't being evicted.  They were being asked to leave.  For sometimes perfectly innocent reasons.

As such, I will always ask follow-up questions as to what happened.  I still run my background check, which includes an eviction history, of course.

It's hard to say without knowing where the property is, ie how difficult/time consuming it would be to have a court-ordered eviction.  But, just to get her out more smoothly, I might consider doing a pre-walk through.  See how bad the damages are/aren't.  If they aren't too bad...though it sounds like that would be unlikely...I'd agree that, as long as it stays in that same condition, she can have the SD back at move-out.  Not a second sooner.  Keys need to be in your hand.

I served a 30-Day Notice to Vacate on a S8 tenant a little over a year ago.  It actually gave her the rest of that month and all of the next month, so she actually had more like 6 weeks.  She was always someone who didn't do anything she didn't want to do, until she was forced to.  I was sick of having to nag her about her portion of the rent every, single month.  And having to post a 5 Day Pay or Quit notice half the time.  I was pretty sure she wouldn't comply with the Notice to Vacate.  She didn't and I immediately filed for an eviction on the next possible business day, after it had expired.  I suspect she didn't even start looking for a new place until I filed for an eviction, because that would be her style.

The original date she was supposed to be out was Sept. 30th.  Our eviction court date was Oct. 17th.  Longer story short.  The judge brokered a deal between us that, in exchange for her paying her portion of October's rent (which was the majority of it and she had), she could stay until Oct. 31st.  But now there was also a court order that she had to be out by 10/31.  She was.  Finally.

However, this property is also in a landlord-friendly state (Louisiana).  Or, as I like to more accurately say, it is a state where landlord-tenant laws are FAIR to both parties.