All Forum Posts by: Timmi Ryerson

Not enough information presented.  I suggest that you get a book, even if it from the library and read about what to consider when buying rental property.  You have said nothing about the condition of the property, the area that is in, insurance etc.  Have you brought a contractor or inspector to see the property?  You need to know the condition of the plumbing, heating system, foundation, roof etc.  Do you have a rental history from current owner?  You should look at all of those things before you make a judgment about whether or not it is a good deal.  Just sayin'  and I wish you good fortune with this deal.

Congratulation on your new investment Michael.  I have had many more units that I owned and only once hired a property management company.  If I had had Nathan around or someone like him, I would have been very happy.  But my experience was not a good one.  When I managed my properties, I was on top of renting vacancies and getting turns done in record time.  My average loss of days rented was 2.  At that time, I did not use software to help me do my job so rent collection week was always a pain. So when I got my units paid off, I decided to hire a property management company to do the work for me.  All of a sudden my vacancies were not filled. Some went as long as 6 months of vacancy.  What was worse is that the repairs they did were horrible. I found that they replaced vinyl in sections rather than the whole floor and used a different style and color to do so. The value of my properties was dropping fast and my income became non existent.  I had my accountant come in and do an audit of my books and found that they were using my money to buy supplies and do repairs for other properties they managed.  In one unit that had 8 windows there were 46 sets of blinds ordered and billed to me.  We noticed that the size of those blinds did not fit any windows in my complex.

I tell you this story because choosing a property management company is extremely important to having your investment be successful.  You can contact your local NARPM group or landlord association and get recommendations is you wish.

In my example, I sued the PM to get out of the contract.  The judge ruled in favor of the contract even though I presented evidence that fraud had occurred.  So I bought out the contract and took my properties back.  

If you cannot find a good property management company in your area, the next best thing is to use software to help you with the repetitive tasks that are required in property management.  I use Smart Property Systems which automates almost everything.  You can get good sample leases from your local chapter of NARPM or online.  The software also had built in leases for you to choose from.  I will not expound on all of the features but suggest that you look for yourself if this is your only option.  Good luck with your new investment.

I use Smart Property Systems and love it.  It is easy to use, my tenants have not issues logging into their portal and it is competitive price wise.

This situation is strange indeed.  It is unclear from what you wrote whether you really know much about that unit.  I cannot tell if it has been rented under this property manager who is either still managing or just quit and put his niece into the unit.  I am surprised that you do not have details about the lease.  It sounds like you know very little about what is going on with your valuable rental properties.  With that in mind, I would suggest you proceed as follows.

1.  Get and electrician to look at the panel and tell you how it is wired and whether it was rewired in some way.  If the panel is not metered to each unit, find out what needs to be done to be able to turn the responsibility for paying utilities over to your tenants.  But remember that when you do this, especially if you have a landlord agreement with the utility, you will need to have a way to be sure that the tenant signs up for taking over payments so that they get the bill and not you. 

2. Give the tenant notice to move out.  In most states it needs to be 30 days unless she is found to be out of compliance and then you can give her a notice to comply.  I would not give this tenant a second chance at anything.

3. Request access to the unit to do an in person inspection of the unit. (She may be growing plants with that kind of water and electrical utilization or worse cooking drugs).

4. Have the water company come out to check for leaks. If they find any, get them repaired immediately.  Ongoing leaks can undermine the soil below your building which can cause catastrophic issues. Also meet them there to find out about your meter system.  You may need to consider putting separate meters on the units.  Ask the water company for suggestions.

5. Advertise for a new tenant while you are doing these other steps so you have someone to rent when the unit is ready.

6.  Once you have the information about the wiring and potential leaks, if it turns out that it was rewired and there are no leaks then contact a good real estate attorney who can assist you with any recovery of money you may be entitled to..

7.  If you do not want to manage your properties yourself, then find another property management company but now you know what you do not want.  There are great articles about how to hire a property management company and what to ask on this Bigger Pockets sight.  

Finally, I will say that you will need to be more hands on with your investment even if you do have a property manager.  You are losing so much money with these kinds of mistakes that you may end up losing your whole investment. You can manage your investments yourself as an alternative.  You will need software to do that and be successful.  There are many companies to choose from. I use Smart Property Systems because it does everything I need and most of it is automated.  But that decision is up to you. 

I wish you well.  I have honestly never heard anything like your story in 35 years of doing property management.

I own a property management software company. We have people from MA who own properties and manage them. They use our software to automate that process. I say this because you can keep your inherited property, and refinance it as you suggested, and buy more real estate. If you buy right you will have a great cash flow where the mortgage or HELOC will eventually be paid off again by rents. So it becomes a great investment for retirement. You can save considerable money when you use software to manage instead of a property management company but then you may not want to have the involvement with tenants. Either way, I think you can be successful in your own state. It is pretty exciting and all of the suggestions you have gotten are good ones. I recommend that you either buy a book or take a course in property management. Join a local landlord association or NARPM in addition to checking out software.

I had a handy man do all of my retrofits and rehabs but that was years ago.  It worked well for me because he only worked for me. But I also used specialists for stuff like floors and painting.  I would get our turns done in two days (my requirement if they wanted my business).  In order to do so, I would order the carpet or flooring and make arrangements for the flooring company to install.  I had a tile guy do the tile where needed.  My handyman did the counter and vanity replacements.  If windows needed to be replaced the window guys did it.  

All materials were delivered to the garage the day the last tenant moved out..and I sequenced the workmen..windows (if needed) painting, floors, tile, handyman and appliances.  But I also knew a couple months ahead of time that the unit was ready for rehab so this coordination was possible.  

You may pay a bit more, but you will usually get the best job possible and you will make up this additional cost by not losing so much rent.  I was able to raise rent which paid for those repairs in a few years and upgraded the overall value of the property and quality of my tenants.  So you may what to have a talk with your handyman about managing that sequence; but in my experience, I had to do it myself to make it work well.

Thanks @Jorgeroman

Tell us how you do this management of thousands of maintenance requests across such a vast physical area.

Yes John Craig, when I started I bought a large group of duplexes.  I had listened to a course and decided to find a buyer broker.  He was very good at trying to meet my requirements and found me the perfect property right away...so I listened to the course...got my property and closed within a 2 month period of time.  It was very successful and I was able to make a handsome profit over the 25 years that I owned that group...You can do the same.  I recommend that you consider looking into using software to assist your management.  I use Smart Property Systems and it really organizes my workload.  If you have questions you can PM me.

Good luck to you John.  You will find many good things here on Bigger Pockets as well as ample advice.