All Forum Posts by: Travis Lloyd

Sounds like you have two different issues: You have a tenant asking for his security deposit back, and you have someone living in your apartment who shouldn't be there.

The current resident first: Does this sub-letter have any intentions of leaving at the end of the lease? It sounds like you want them out - do they seem amenable to departing? A lot of sub-lets understand they're only short-term. Obviously if they are not going to go quietly, you have a much deeper issue. Just wondering if you have spoken with them to determine where they are at? And if they seem to be resistant to leaving - try offering some $ incentive to leave (and sign a release of course).

As for the security deposit - personally, I would not try to keep it due to the sub-letting. There is an old saying - being right is cheap, proving you're can get very expensive. And a tenant crying "the landlord stole my security deposit" goes way too easily. Turn it around - hoping the current occupant does leave (one way or another), can you identify (and document) sufficient damages/problems with the unit to justify keeping the security deposit?

Personally I would try to get the current occupant out, without taking them to court. Then try to identify sufficient problems to retain as much of the security deposit as possible.

There is an alternative - IF the current tenant could prove consistent rent payments, regardless of their credit, I might actually try to get them sign a new lease - at a slightly increased rent, PLUS a security deposit. IF they could come up with the security, and the increased rent - I might just keep them.

@Dave K. as far as keeping track - with 4 units, a simple excel sheet will do. For larger properties, people use specific programs like Yardi. For 4 units, or even 20 units, these systems can be more troublesome than they're worth. I've only ever used them on 50+ units.

As far as taking rents up front for a year - I would caution against that. If you did have a problem and need to get them out, you would have a very difficult time - even with the offer of returning their rent.

Also - there are those that suggest accepting online payments. I would strongly disagree (with a caveat, which I'll explain afterwards). If you were faced with evicting a tenant for non-payment - they could pay a minuscule amount online and it would restart the 'non-payment' clock. Perhaps that does not apply in Michigan, but it has been the case in every state I've worked in.

The caveat to the online payment system is if you were to create a specific online payment portal that restricts the amount that can be paid to the actual rent amount. If you can restrict them from paying you $1 (or something equally ridiculous), then you would not need to be concerned.

Good luck!

@Mike Wiesner we have a meetup in Fairfield that is also at Anna Liffeys - it is the LAST wednesday of every month, at 7pm. You can find all the details at our meetup page https://www.meetup.com/Connecticut-Real-Estate-Investor-Meetup/

Agree with the HML suggestions above, but if you'd rather get your 'hands dirty' (ironic, for passive income, I know) - you should think about partnering with an experienced player. 20-30k a month does not come from a small property or portfolio - and you should always walk before you run. If you joined with an experienced player, you can bring a good portion of the pre-finance capital to the deal, and your partner would bring a smaller portion of the capital, and the operations experience. Residential, commercial, and mixed use can all deliver these returns easily - you just need the experience side. If you're determined to do it all yourself - start small. Go buy a small multi-family (10 units gives you a decent idea of scalability - whereas 3-4 unit properties run in completely different ways). Use financing, so you're not locking up all your capital, and run it for a year or two before moving up in size.

Partnering for experience is the best way imo - because many operators are missing that piece of the puzzle (the larger share of the capital) and farm it out via pref raises.

Good luck! Keep asking questions - BP is a fantastic resource for knowledge.

Congratulations - just keep putting in offers! Its all a numbers game...

@Alfred Wechselberger we are still hosting these meet ups! The last wednesday of each month, at Anna Liffey's in Fairfield, starting at 7pm! Hope to see you at the end of this month!

I had a 1940s home with knob & tube, but it also had the old unshielded braided lines throughout the house. Is that more what you're referring to? The Knob and Tube is a type of panel - and you often can have such a panel but still have the shielded wire (bx). I have replaced many knob and tube panels and spent 2-3k on that. The house that I had to replace all electrical wiring from the braided lines to bx, that bill was about 18k. It was a 3400 square foot house though, so not a small job, and that included the panel and service upgrade. So the wiring was probably 13-15 of that?

Another way to look at it would simply be on a per unit basis. GRM can have issues if the units are rented below market vs units rented at/above market rates. It can skew your comps. Per units can be quick and dirty - though it won't dial it down to a specific dollar amount. If you are looking at something that is less than perfect - start by finding a few comps that were perfect - that gives you a per unit ceiling. Then find some truly abhorring properties, and that gives you a floor. Then you can dial in with more specific comparable units and properties to find out where you fall on the spectrum - but you have the added benefit of knowing what the high end of the valuation could be after you put in the time/work. Good luck!

Hey bob - let me see if I cannot help you find something that works. PM sent.

Hey @Phelim Lennon welcome to BP bud! Yes I'm here in Black Rock too! Sounds like you're already off to quite the start, not really a beginner. We should get together sometime - I'm happy to offer any help or guidance I can provide. And absolutely do not miss the monthly meetings - they are a must.