All Forum Posts by: William Walker

For me personally I have to hire out the big stuff like was mentioned above.

The small stuff like painting, putting in new air vents, changing a faucet, putting on a new toilet seat, all of that kind of stuff saves lots of money.  I can go to home depot, get something that I know is quality for less than what I'm quoted and install it for free.  Or pay 2-3x for a product that I don't know the quality, and then pay to have someone install.  It's not a rip off, it's the cost of not being able to do things yourself.

I'll try not to be a Debbie downer but try to shed some light on why the numbers might need some work.

Purchasing a house for 40k that is listed for 130k is HIGHLY unlikely.  Less than 1/3 of the asking?  Not to say no way, but no way. 

The good news is that the house really doesn't look like it needs a new roof.  That could be 15k right there.  I also don't think it needs siding, a pressure wash for $150 and it would be fine.  That's another 10k.

Are you doing any of this work yourself?  Spend a day painting the outside windows and you'll save yourself another couple thousand according to your spreadsheet.

We don't know what the inside looks like, but 10k for framing seems high just based on the exterior pictures.  I'm imagining the house needing a kitchen remodel and bathroom remodel and things like that, but still having walls with a good layout.

The final say is that you need to at least see the inside to know what ballpark those numbers should be.  With a possible 30k profit you could see big % swings in your profit if just a couple of your numbers are off.

Thanks for all the feedback!

After some discussion with my PM we will change the lease renewal time to late spring to target the market when school is out and people are moving. 

I also asked about the one time lease up fee of $150 that is normally applied to finding a new tenant and the PM said it would not be applied in this scenario.  I'm surprised as this means the PM is doing the work of finding a new tenant for free.

@Kimberly H. I wouldn't exactly call Wilmington NC a "cold climate" and it is a good PM company.  I agree that January isn't prime rental time though.

@Robert Melcher as @Max T. said the contract really doesn't allow this but I can't exactly make them move back into the house.  As far as I'm concerned I don't really have any incentive for a new tenant to be placed.  The outgoing tenants could just continue to pay the rent and live wherever they want.  My only real advantage of getting a tenant in now is that I eliminate the possibility of outgoing tenants no longer paying and hopefully the new tenants will renew and I won't have to deal with finding a new tenant in August.

Wanted to post a brief interaction I had with a wholesaler.

I saw a property on craigslist that was listed for 19k.  It's a gutted house and there was only one picture which was on Zillow.  The house was off market.  The add states that the price is the "wholesale price" and that it must be closed by Jan 4th.  I send an email asking about the property and if I can be added to their buyers list.  A few days go by and I don't hear anything back, but then I see a post on craigslist with no pictures titled "Home for sell" listed for 12k.  I click on it and it's the same property!  So I send a text to the number asking if they are a wholesaler and the guy replies "No, I'm the homeowner.  I just had some dumb@@@ whole selling company that has wasted my time for about 3 months and then I found where they had on Craigslist asking like 19,000 when I thought they were buying it".

To add some whip cream to this treat I get a response from the wholesaler the next day saying he would add me to his buyers list.  Sends me an email that has two "deals" typed in comic sans, no links, no pics. 

And finally to put the cherry on top, the wholesaler has an account on BP.  I click on it and the description reads, in all it's glory "I learn for 6 years, no deal yet".

Your PM is being shady.  Everything between you and the PM should be crystal clear.  What else is this guy hiding or "just not telling you" about what's going on with the property?  It's easier just to continue with the current PM rather than finding a new one and going through the transition, but I would start looking around if I were you. 

A great thing to do while you don't have much cash is to focus on the area you want to invest in.  Research property values and track prices.  See what properties are being listed for, how long they sit on the market, how much they sell for, etc.

The great part about not having any cash (few and far between great parts of that), is that you won't have the impulse to jump at something you think is a deal but isn't.  After spending time really researching your area, once you have the funds you'll know a deal when you see one.

I'm not sure about the 30 day notice as they are still paying the rent and on the hook for the lease.  I'm talking to my PM later today and should find out more details about the timing of everything.  I have to go back through the lease and read the details that pertain to this situation.  I know my lease pretty well but this was a bit of an eye opener.

My PM is really good about presenting a tenant to me and asking if I want to proceed with the rental process which I appreciate.  I agree that I shouldn't worry too much about the outgoing tenants paying rent, just another possible headache but that's why I pay a PM.

I'm talking to the PM today and I'll let her know that I don't want to start a new 12 month lease now.

Yesterday I got the following email from my PM:

"Hope you are doing well and had a nice holiday. I wanted to let you know that the current tenants have moved out of the home as of yesterday. They bought a house in Oak Island. Due to this, we are going to be doing a lease fulfillment, finding someone else to take over the remainder of their lease (until August 13, 2017 or they can extend beyond that date to do a 12 month lease). The rent must stay the same as they will be taking over the current lease. The current tenants did have the home professionally cleaned and I am going over later today to do the move out inspection and then schedule the carpet cleaning (carpet cleaning is a tenant responsibility so I will be charging this back to them). On lease fulfillments, we do not do any turn work such as painting, major repairs, etc only cleaning and carpet cleaning. The new tenant takes the home basically ‘as is’. The current tenants signed an agreement to do this which also states that they are responsible for paying rent and all utilities and maintain the yard until the day before a new tenant moves into the home. They paid January rent yesterday so we are good there. The home will go back into advertising today and we will begin showing it to new prospective tenants. I will inform you and the tenant when I have secured a new approved tenant to take over the lease. There is nothing you need to do but I wanted to make you aware of the situation. Please let me know if you have any questions. Thanks so much!"

There are two main problems this presents to me the way I see it.  First is that if new tenants move in and decide to sign a new 12 month lease, I now have a property with a lease ending in the winter.  I was thinking of only letting the new tenants continue the current lease and then in June if they want to stay have them sign a new 12 month lease starting in June. 

The second area of worry for me is that the tenants are elderly and just purchased a house.  The have no incentive to continue paying on the rental if new tenants can't be found.  I doubt they care much about a hit on their credit score at the age of 90 and with a house.  I doubt they would stop paying based on previous interactions with them, but it's a possibility.

Does anyone have any experience with this type of thing and any advice is greatly appreciated!

Why did the tenant decide to move out after 3 months?  Moving is a lot of effort and money.  Does his reason to move have any correlation with why you can't find another tenant? 

I agree with some of the above posts in that it sounds like you should be somewhat happy with the 3 months of payment and cut your losses.  I don't think pursing this legally would benefit you in the long run.