All Forum Posts by: Sean McKee

@Trevor Bond- It depends on the situation. If they are month to month, you probably don't want the entire building to go vacant at once (loss rents, increased security cost). If they have yearly leases, yes I would let them know ahead of time.

Stuff can get very dicey when buying distressed properties with tenants living there. I actually had a near disaster. One of the tenants had a "gas leak" a few days after closing and got "sick", so they weren't going to pay. Then another on the same building refused entry and refused to pay rent. This was during COVID moratorium, so with advice/help from my lawyer, I ended up paying a total of 5k for them to leave in two weeks. I budgeted around 2,200, so this was definitely not ideal, but that's the risk you take with these kinds of buildings sometimes. I doubt you will have pay this much, if anything, as you are in a landlord friendly state and the moratorium has ended. 

If they still have 6 months left on leases when you take over a building, that is plenty of notice. The best way in my opinion is to be real with them and let them know the building needs a lot of work to bring it back to standard. They likely already know this and will likely accept it and move off. 

If you plan on buying a distressed building with tenants on it, I would just make sure you factor in the potential for issues in your purchase price. With good interpersonal skills and the preparedness to take action should stuff go wrong (cash for keys/eviction), you should avoid any kind major disaster.

@Trevor Bond I have done this a couple times. I think it will be unlikely you'll have perfect tenants if it is a serious rehab. Usually there is always one bad one if the properties weren't maintained. 

If you were truly to get perfect tenants and they were fine with paying market rents with improvements done, a lot would depend on what kinds of improvements you are making. If you are having to do serious electric , plumbing, HVAC, or layout changes, it probably won't work out well.  If it it's more surface work, like painting, light fixtures, new cabinets, etc, you could likely accomplish it.

The more likely scenario is that you have one really bad unit that you can start on either through terminating the lease or offering the tenants some kind of move off incentive. You can then fix this unit and any exterior/common area work. You can let the remaining tenants know you plan on increasing rents and offer one of them the updated unit for higher rent. If they accept it, you can rotate them into the updated unit, and fix their old unit.

I've never had this happen, once you mention all the repairs you have to do and the rent increase, they will likely move out on their own within a few months. I've only had one person stay.  They were already paying market rent and had a year lease. I had to re-pipe their bathroom as part of broader building update. They were a constant headache despite complaining their bathroom never worked.

Lastly, a lot will depend on if they have formal year leases or just verbal month to month. If they are month to month, then you can proceed with terminating the leases if you wish. If they have year leases, you'll have to abide by the terms.

@Wesley Rugg- What is your projected ARV of the 2 unit once you have completed renovations? I'd go with your gut regarding the tenant being a potential headache.

 @Jonathan Klemm I agree with Baris.  There aren't enough landlords to cause a lot of push back.
Landlords are outnumbered by tenants, former tenants, and people who simply don't care about landlords. The truth is landlords struggling doesn't really stir the same kind of emotion in the broader public as their favorite restaurant closing.

You are correct, there's not a lot of hard data to support this extension. The Governor to my knowledge did this very discretely and did not provide a lot of details on why.

@Aaron Zimmerman. I read a news articles about the Governors intention to extend till 10/3, it is not an official executive order yet. We will probably find out for certain what his intentions are this Friday.

@Sandeep Agarwal- I would check your local laws. A lot of places you either have to hand serve them, post, or send by certified mail.  I assume in Connecticut you only have to give them a 3 day notice or quit? If so, assuming you served them proper notice you could turn it over to a lawyer and go to court. Again you would need to consult your local laws.

If they are only 3 days late, hopefully the email wakes them up and they let you know they won't have it until the 10th or something.

@Rob Hayes. Please see link below.  He has not officially released another executive order, but a spokesperson says he intends to extend it to 10.3 to match when the CDC ban would have ended. So I would expect him to further extend it, and hopefully he decides not to.  He kept his decisions to extend it very low key and I almost missed it. I hope I am wrong with him going past 10.3.

https://chicago.suntimes.com/c...


"A spokeswoman for Pritzker said Friday the state’s moratorium, which was slated to end Sept. 18, would be extended to Oct. 3 — the date the federal moratorium was to end."

@Rob Hayes. I believe Pritzker extended it until 10/1 unfortunately. I hope he doesn’t keep extending it, but I won’t be shocked if he does. He now has the momentum to extend until at least end of the year.

In your case I'd terminate. In my opinion that's way too many pets.  I've had someone sneak a pet on before. I worked with them and they turned into an absolute disaster. If they bend one rule, they will bend more.

This is a potential warning sign of a tenant willing to do whatever they want. She is clearly testing the waters. If you do decide to keep them as tenants. Make the pay a 200 dollar pet fee and charge them an extra hundred a month. If they become annoying later, at least you are getting paid for it.

@Cindy Schneider-  Tenant screening criteria depends heavily on neighborhoods and local laws. 

As long as you are following fair housing and any local laws, you can set your criteria to whatever you want. You just need to be consistent about it and apply it to everyone. 

I used the use this criteria for high level screening on sites: 600+ credit score, income must be 3 times monthly rent, 2 years of work history, no evictions, must provide at least 1 landlord reference. We can't blanketly deny people in my market based on criminal history, so I would double check in yours.

I'm in C class markets, so everyone pretty much has some kind mark on their credit. My key areas of rejections are: any past eviction in last 7 years, past due car payments, judgements/bankruptcies , utilities in collections, address/social security mismatches(I've caught a lot of scammers this way), fake landlord references(usually caught through simple county searches). I would error on the side of caution and just go with what the report says about their background unless they can provide compelling evidence against it.

Both your applicants seem like typical renters and both have credit scores higher than my average renter.  Just verify all their information before you proceed.