All Forum Posts by: Jennifer T.

It was my first bad experience with tenants and I was definitely naïve about how unreasonable and wacky people can be.  I could see that.  Putting themselves and their three children in danger because the batteries on the tv remote died, smh.

And they were so furious with me.  Um, for what?  Because I kept politely and professionally asking them for payments to their overdue rent (yes, so naïve!)?  But the psychological lesson I learned was it's easier to be mad at someone else and blame your troubles on them, then it is to face the truth about one's own shortcomings.  Now with potential tenants, if I start hearing a lot of "woe is me" stories and their troubles are everybody else's fault, major red flags start flying!

The thing with an FHA loan is the property has to be in pretty good condition. It's okay if it looks outdated but, in a nutshell, everything needs to be functioning. Insisting on a property that will pass an FHA inspection will really narrow down your choices. Add on that you want a duplex...many of which will be non-owner occupied and there will often be deferred maintenance that won't pass FHA...and your choices are even slimmer. But is it impossible? It wouldn't be in my area. Just less selection and I'd be at the higher end of price points.

Most conventional, owner-occupied home loans only require a 5% down payment.  If you can swing that, I'd recommend considering it.  You'll have a lot more options to choose from and possibly better deals.  If not, then keep saving and keep your eye out for the right property to come along.  

The used batteries out of the smoke detectors.  Same tenant.  A part for the tub faucet.  I forget which one, but it was something we had just replaced a couple months earlier. It wasn't copper.  It wasn't valuable.  That one was a puzzler as to why they even took it.  They stole other minor items out of the unit also.  But those were the especially weird ones because they were worthless to the average Joe anyway.

And for as much as those deadbeat lowlifes cost me.  I was actually angriest about the smoke detector batteries.  Thank goodness I'm a conscientious  and detail-oriented landlady who checks for that kind of stuff between tenants.  Because they could have literally killed people if a fire had happened and I hadn't checked.  Over worthless batteries they could have bought brand new for less than $5.   

I don't see this as being the tenant's fault at all.  When I was a tenant, I didn't know anything about HVAC systems.  If my a/c was blowing hot air, I'd put in a maintenance request with the office.  If they wanted to troubleshoot with me, that's fine.  But if they didn't bother (they never did), then it's on them if it was an easy fix or clicking the correct button on the thermostat.

I manage my own rentals and ABSOLUTELY troubleshoot with my tenants about an a/c "blowing hot air".  Because this is literally the conversation I have with almost every tenant, every summer:

Tenant:  My a/c is blowing hot air, something's wrong with it.

Me:  Is it actually blowing HOT air?  Or is it just not getting the room/house cool enough?

Tenant:  No, it's blowing cold air.  But it's not getting the house cool enough.

Me:  "Unfortunately, residential a/c systems can typically only get a home 15-20 degrees cooler than the outside temperature.  So when the "feels like" temperature is 105.  Like it is today.  It's working fine.  But that's just the best it can do."

I'll also make other suggestions to ensure the unit is running efficiently, ie have the changed the filter.  I also suggest they supplement with window units.  They need to buy the unit, but we will install it (and insist on that) at no charge.  But I notice no one has ever taken me up on that offer, even though used ones can be had for $50 or new ones for $120.  Soooo...yeeeaahhh.  Apparently it's not that bad.

For rentals, I usually factor in 18% of the rent for vacancy/repair/capex.  That would put that expense at $306/month.  By those calculations, you're going to have a net loss more in the $250/month range.  Right now, you don't have anything factored in for vacancies.  Even a 2-week vacancy between tenants...and it can be much longer than that, especially if repairs are needed...is going to be a lost $850 in rent.

If I were you, I'd also do a calculation for what a longer term future looks like if you just sell the house now as opposed to holding it for a few years as a rental.  Because, right now, you're gambling a $250 monthly loss that it will appreciate in the future.

I inspect my rental units 2-4x/year.  To check smoke detectors.  Check ceilings and under sinks for potential leaks.  But I also look for tenant...or animal...caused damage.  It doesn't matter if an animal is an ESA or not.  If they have caused damage to the unit, you can require the tenants to pay for the damage NOW.  Not blow it off that it will come out of the security deposit.  At least that can help to possibly curb damages if the animals are causing those kind of problems.

I absolutely cannot stand wholesalers who call me on the phone.  And why would I ever trust some telemarketing, time wasting jerk who can't be bothered to comply with the Do Not Call list?  Obviously, I wouldn't.  Just send me the postcards where I can quickly throw them in the trash with the other dozens and rest of my junk mail.

I've purchased from wholesalers twice. Though I found both deals on Craig's List, not from being on a list. One of them was sleazy and lied about a few things. But the deal was awesome, so I put up with it. The other one did a little shading on rehab costs/values, but nothing crazy, and was a straight shooter from day one that he was a wholesaler and we'd be doing a double close. He was how a wholesaler should be. Spending the time I don't want to, to find a great deal. I'm on a few lists nowadays and will glance at new properties they have available. But, like a lot of people have mentioned, they're usually terrible deals. I don't even mind if the ARV is "generous" and the rehab costs are "conservative". I would fully expect that, considering the type of business it is. But, for goodness sake, at least be in the BALLPARK!!!!

Because, when they're not. I assume the person is, at best, beyond clueless. So, why would I even want to waste my time with someone who has no idea what's going on. Or, at worst, a boldfaced liar who is looking for some newbie REI unicorn who does no due diligence. My personal fave was an estimated repair cost of $15K for a gutted 1200 sqft house. I almost spit my coffee out I was laughing so hard. At least the really bad analyses are good for some occasional entertainment.

I also had a wholesaler once...or maybe they were just an outright scammer...who wanted me to make my earnest money check payable to them instead of to the title company.  Not even to the property owner.  To them.  I actually don't think they were a scammer.  I think they just had absolutely no idea how real estate transactions usually work.  And this was after I'd already spent a ridiculous amount of time sending their poorly written PA back 3x.  Because they refused to use mine, which was just the standard Louisiana PA form.  I told her repeatedly, absolutely not and why.  She kept arguing that her and the seller needed it as assurance I wouldn't change my mind.  And I kept explaining YEEESSS, that's exactly part of what the third party entity title company does.  It was only after I finally told her I was done wasting my time on this and was cancelling the PA, that she suddenly changed her tune and now it was "okay if I made the check payable to the title company".  Because she hadn't realized how important that was to me?!?!?  NOPE!  We're done.

It sounds like this is an "area" thing.  To say a property is being sold "as is", in my area, is a standard phrase that is in pretty much every PA.  Usually there is also an inspection contingency.  And it's perfectly reasonable, even expected, that the buyer will come back with either repairs they want completed and/or a lowering of the purchase price.

With that said, the advice I've been given by my agent is to make sure to factor into my initial purchase price, any repair costs I can see from the showing.  Renegotiating after the inspection should be for things that come up during that process. 

Assuming an inspection contingency is in the PA, if the buyer and seller can't agree to terms after the inspection, then the EM is returned.

As a buyer, I've had it happen all three ways.  I'm still happy with the price after the inspection and don't counter.  I've successfully renegotiated the purchase price after the inspection (I've never asked for the actual repairs to be done).  And I've also walked away when the seller and I couldn't come to a new agreement.

In fact, that actually happened earlier this year for two duplexes (same seller). I knew there was a lot of deferred maintenance and accounted for about $60K in rehab in my initial purchase price. But because tenants were living in all the units, I assumed the major systems were at least in okay shape. They were not. Including one of the properties that was years past when it should have had a new roof. After my inspections, I substantially reduced my purchase price. I even wrote a letter that outlined the specific items and their repair costs...none of which I could have known from the showings...that was prompting the price reduction request. The seller didn't even counter-offer. We went out of contract and my EMD was returned and the properties were re-listed at $15K less than they were before.

Fast forward 5 weeks later.  The asking price for both properties drastically dropped.  Almost to where my second offers had been.  I put my second offers in again and we went back under contract.  I still had an inspection contingency.  But passed along that I wasn't bringing my inspector back out again.  I just wanted to pop back into the properties and make sure they were basically the same as they had been for my inspections.  Assuming that was true (it was), I had no intention of asking for a lower price (I didn't).  And I closed on those duplexes two months ago. 

I started house-hacking and still do.  I use the fact that I own the home and also live there as a "benefit" and talk it up a little, for when I have a vacancy in my other unit.  Prospective tenants respond really favorably knowing that I live there also because it gives more credence that I will take good care of the place and that the neighborhood is a safe place to live.  It would be especially stupid for me to lie about my ownership because it's my own house, so I own it under my personal name.  It would take someone all of 30 seconds to find that out.

For my other rentals, I emphasize that we live locally and take pride in keeping our properties in great condition.  Just like there are horror tenant stories, there are horror landlord stories also, so I like to allay those fears.  I suppose that implies we own the properties.  But, if someone asks, I tell them the property is owned by a business and I am one of the managing partners.  Because that is also the truth.

I have never felt the need at all to be a "bad cop".  I'm a "fair, firm, these are the facts" cop.  I show with my actions that I take my business seriously.  Just making it very clear I have background checks that cost the applicant money, I think goes a long way to weed out shady tenants.  Or at least have them  'fess up about what they are worried about before they pay an application fee(s).

LL-Landlord/Landlady.  The initials for a term used a lot on BP, lol.

I charge a $250 break lease fee, but I've seen others charge up to $500.  However, keep in mind, that fee is ON TOP of whatever lost rent there is.

I'll give you a real life example.  A couple years ago, I had a tenant sign a one-year lease in Feb., but then had a long-term family emergency come up and gave notice around May 23rd.  He actually moved out within the week and had left the place clean and in great condition.  He paid June's rent, plus I still had his one month's security deposit.  I told him I would fill the vacancy as quickly as I could, but would be deducting the break lease fee out of his security deposit and...if the vacancy continued into July...I'd also subtract whatever pro-rated days of rent I missed out on.  He was good with all of that.

And that was essentially what happened.  My next tenants moved in after 4th of July weekend.  I subtracted those few days of rent, plus the break lease fee, and returned the rest of his security deposit.