All Forum Posts by: Kyle J.

I would chalk this up to a lesson learned.

You should never have rented to (or even considered) an applicant with 32 judgments against him. He has already clearly demonstrated his inablity/unwillingness to pay for what he owes.

You also should not have let him move ANY of his property onto/into your any part of your property until he has paid you ALL of the initial move-in money (rent + security dep).

As for what you should do now, I would cut your losses and refund the $200 he paid to you back to him, and the $400 the GF paid to you back to her. Then find a new tenant.

I personally wouldn't worry about his threat to sue you for "lost wages". Not even sure how he could argue/justify that with a straight face.

I've seen two TV shows recently that talked about hoarders in apartments. What caught my attention was the pest/rodent problems that these types of units can cause.

Even if the unit doesn't smell, the typical hoarder does not (and cannot) clean the entire apartment due to the amount of stuff piled around. This can often attract roaches, mice/rats, and the like. Once those pests show up, they can spread to the rest of the complex and infect other adjoining units. Also, they can be extremely hard to get rid of since the hoarder's unit often cannot be effective treated/controlled for pests with the vast amount of stuff piled up inside. And if you can't treat the source, you can't cure the problem.

Something to think about when deciding on whether to evict or not.

Without a job, you're options are going to be limited. Just because you don't live at a property, doesn't mean it's going to be considered a "commercial mortgage" or that a lender is going to use the property's income/cashflow as the sole basis for qualifying you for a loan. Usually 1-4 unit properties still fall under residential loans, meaning your earned income is going to be a factor.

I understand you have $385K invested in the property, but how much equity do you have in it? What do you think the current ARV of the property is? Is it cashflowing?

There's a lot of factors that determine what a "deal" is.

What is your goal? Long term buy and hold? Flipping? Wholesaling?

My model is buy and hold. Obviously, I (like everyone else) want the best deal possible. However, I don't have to get a ridiculously good deal to make money because I don't have to worry about having enough of a cushion to be able to mark it up and re-sell it.

I also don't think price per square foot is a good bench mark. What is a good price per square foot in one neighborhood/market, could be unattainable or way overpriced in another neighborhood/market.

Basically, I look at purchase price vs market rents for the area and what my monthly cash flow will be.

Keep in mind there is good debt, and bad debt.

I avoid carrying all types of bad debt (i.e. car loans, credit card, store credit, etc). With those, you are literally throwing money away. And usually lots of it.

However, I do utilize good debt (i.e. mortgages) to purchase/hold properties that make me money. And I will continue to do so. I see nothing wrong with taking on a new mortgage payment of $500 a month when it makes me $1000 month. In fact, if I had enough money to pay off all of my real estate debt, I wouldn't do it. I'd just use that money to buy more properties that produced even more monthly cash flow.

Is the tenant willing to move? Is there a written lease, or is it a month-to-month?

Everyone is going to have a different policy on pets. Some allow them, some allow them with conditions, some don't allow them at all.

My policy is that I do not allow them at all. This policy was set as a result of personal experience. I made an exception once to allow a tenant to have a dog (medium sized Husky), and it did SO much damage that I will never let another tenant have a dog. It's just not worth it to me.

This dog dug holes all over the yard, chewed sprinkler heads completely off, chewed ALL of the wires off the sprinkler valves/solenoids so that they all had to be completely replaced, scratched/chewed up an exterior door and door casing, and literally chewed through a brand new fence/gate I had recently built. Not to mention the fact that the tenants left about 3-4 five gallon buckets full of dog poop in the backyard when they left.

Yep, never again.

Troy Baughman Yes, ideally you would get the tenant to sign a lease with you (assuming you want to keep them).

Do they already have a written lease with the prior landlord? If so, it's likely still binding on you (depending on your state's law). In California, the lease goes with the property (unless it's a foreclosure which I'm assuming this isn't since there is a tenant in there already).

As for what else you should do, I'd work on getting stuff done BEFORE you close. You won't be able to do any actual work on the house until you close (or at least it's not advisable to do so). However, you can prepare to have the work done before you close.

For instance, if you're going to be doing the work/repairs yourself, take any measurements you need and buy any supplies you'll need beforehand so that you're ready to get to work as soon as you close. If you're going to pay to have the work done, get estimates and choose/schedule your subcontractor(s) so that work can begin the day you close.

I always start working the first day that I own the property and can get in there and work. I've done complete remodels in a week and a half or less. Not sure why it's going to take you a month to get the place ready to rent if it just needs "a few repairs", but I'd work on cutting that timeline way down. Every day it's not rented after you own it is a day you're losing money.

Ditto. And if you don't count the time I spend on BP, I spend less than one hour per month on my business/properties.

I've always just used cash. Seems to be accepted at most places. :)