All Forum Posts by: Warren Lizo

Water-tight LVP is a great product. Yiu get what you pay for in terms of durability. While not all the rage -yet- carpet tiles are fantastic in many applications. You can replace just one tile at a time. However there's no padding underneath  

Hi @Eunha An

I was the Director of PM for a company with 2000 units and commercial parks before starting my own property management business focused on enhancing ownership for small investors. I was also on the international Board of Directors of IREM for 2 years and served as the IREM Boston Chapter  President in 2020. Happy to have a conversation with you as you get started. 

Hi Nima,

Google Translate is incredible! You can easily have a conversation with a person speaking a different language entirely. So long as they are willing to communicate with you (a baseline for ANY tenant) you can have a productive relationship. 

HomeBase is a tricky program  make sure you understand it- the application process, inspection process, the renewal process, and how long the contract lasts  It qualifies as Housing Assistance so you can not discriminate against it as a source of income. Apply the same rental screening criteria as you do all other applicants  

also, the use of the phrase "blend in" could be construed as a Fair Housing issue  There are A LOT of laws for landlording now, especially in Massachusetts, that can easily and detrimentally nail an unaware landlord. 

if you have any questions, feel free to give me a call  We have property management clients throughout Quincy and I'm happy to just have an informative conversation with you  

@Aaron Landau

Screening tenants is probably the MOST important steps of renting a property. In Massachusetts they love making it difficult. The MassCourts.org dataset that feeds tenant background check companies is currently deleting records because of eviction sealing!

First, not all screening systems are the same. Most small landlord screening platforms rely on TransUnion which is not my favorite. (If anyone knows of a platform that uses Experian, please DM me!). Websites that reduce screening down to a "score" always do a bad job, in my experience. Don't rely on Zillow's app. MyRental.com from SafeRent does a decent job. 

Second, learning how to read a credit report and setting consistent standards for renters will reduce the risk with each rental and to ensure Fair Housing Compliance. If you get sued for Fair Housing discrimination, whether intentional or not, it's going to be expensive. I've seen it break some small investors. 

Third, just my general professional advice here: If an applicant owes any utility or telcom - reject. Get the prior landlord's recommendation. Search the county courthouses of prior addresses. While brokers are great at soliciting great applicants, Property Managers do a better job of screening than brokers because PMs have to "live" with the tenants. 

If you have any questions about screening or property management in general, feel free to reach out. I can be texted at the number in my signature. 

Nice presentation, Tyler. I don't know the Peabody market well (my property management business is focused Boston-Weymouth-Westwood area) so I can't speak to what the after-renovation property finishes should be. Paint would go a long way on making this one shine! The floors all look in great condition. The biggest thing I notice on this one (just from the pictures) is the absence of electrical work (receptacles not present on some walls/kitchen, ceiling fixture with pull) which means the electrical panel is probably 60amp, and the odd gas supply repair which indicates the landlord was cutting corners. 

Yes, it is possible to put lipstick on a pig, but in my 15+ years of experience providing property management, the best way to make the asset profitable over the long run is to do the repairs the right way from the start. Even if you can't do them all. Doing a job twice costs 3x as much as doing it well the first time.

Good post! I look forward to seeing more of your deals!

Generally speaking, Boston proper is an appreciation market (low cap rates) unless you have a solid value-add play. It's still an expensive entry point. The further you go from Boston the inverse happens- stronger cap rates with better cash flow. That's why mature investors with long positions like Boston while places like Brockton and Holyoke are more affordable.

Consider thinking about CAP rates as 'measure of risk' and relate it to your risk tolerance. I was taught this my the principal of one of the largest industrial REITs in the country and it has always proven to be true.

If you attempt to go to court, the 30 days repayment is most likely what the judge will grant in my experience. Without seeing your lease, if the lease says that 'charges are due as additional rent' the charges may fall into housing delinquency law. If they are billed separately, the charges may fall into Fair Debt Collection Practices Act laws. Someone on BP may have a different suggestion on the later. Ultimately, you want to be fair and firm.

Nothing says you have to use the GBREB lease or MA Realtor lease. You can craft your own or modify it in the Addendum(s). We use a custom lease that has evolved over more than a decade to protect us and the property owners. If you connect with a good real estate attorney, s/he will certainly have a strong lease for you to use.

@Katharina Bormann

Hi Katharina, you need to put something in writing to the tenant with a reference to the lease clause to officiate the lease violation, as @Nathan Gesner mentioned. Not only does this provide you a reason to non-renew, but if it gets worse you have a paper trail. 

In MA, tenants generally have 30 days to pay repair costs. Be sure you provide them with copies of the invoices. You lease should state a interest fee for unpaid balances. This is a good incentive for them to pay on time.

If this is a single family, they are responsible for pest control. If this is a multi, then you are. But, you can charge them back if the pest control report indicates they are the cause. That is a health code violation. Clutter/hoarding are a different issue and create a fire hazard. If you have a multi, I usually recommend not allowing tenants to store items in the basement. The risk is too great.

Overall, I recommend revising your lease to include less arbitrary language to set clearer expectations and make it more enforceable in court.

Feel free to reach out directly with any questions. 

@Lorenzo Lopez

Pretend a map of Boston is a pool of water. Imagine dropping a stone on the Public Garden and watch as the ripples extend outward. Where you dropped the stone is where you get max appreciation. They further out the ripples go from the stone, the less appreciation your receive while the cash flow increases.

Don't think of CAP Rates as just NOI/value. They really shouldn't matter to you. CAPs are an individual investor's measure of acceptable risk for a given reward. Some investors have an appetite for 3% (low risk) buys, like a Walgreen's parcel. Others want a higher reward so take on more risk, like low credit tenants.

Boston is a "mature" market with strong appreciation, as @Dan H. mentioned. If you want some cash flow, aim for secondary markets like Worcester or Fall River. Starting out, buy a shabby condo and live-in/flip it. Or explore a 40B lottery condo purchase and look into house-hacking. Follow RobertNichols on IG (who also has a hard money company OnyxCapital, btw).

Keep trying until you find an 'equation' that works for you.

And. if you have a property management question along the way, feel free to reach out to me. 

Hi @Inderpreet Singh

An Umbrella Insurance policy is a cost-effective way of getting your general liability coverage up. For a few hundred more it is well worth it in my opinion. When you move all of your insurance under one insurer, they can also bid down your individual policies to help save you money. I understand that Geico is good for car insurance, but not for rental property. Every carrier has their own specialty. If you're interested in an insurance broker that can help you with that, msg me and I will provide a local name of someone that can walk you through some options.