First investment duplex stories!

[Jason Smith]

So I just purchase my first property, it is a house and a 1/2 duplex, here are the stats, insurance 660/year, taxes 1730/year total rents currently at 775 per month (350 and 425). The purchase price was 30000 with 4.75% for 15 years, 20% down conventional lending. The major repairs are a roof 3000$ and a small retaining wall I'd like to replace for an cosmetics. Well, inherited tenants may get me quick. The one unit has 3guys, 1girl, and two kids living in it..... It's a two bedroom apartment. I just discovered that one guy was previously arrested in Illinois (Mt. Vernon) for possession, distribution, and production of crystal meth, he has 2 burglaries and two grand thefts on his record also..... I have been in the apartment 3 times this week and will continue to do walk throughs often and I am currently running a check through the local sheriff. To me I looks like there is a 40750$ bond on him..... Is this a good deal gone bad too fast or is there a reward? The other tenant has been there for 6+ years, a single woman and her child. I'm really hoping my other tenants don't scare her away before the situation gets too far. I contacted the previous owner and her comment was "she wanted a winter tenant" Entertain me with some comments! Thanks all!

[Marcia Maynard]

Beware! If the one guy has such a rap sheet, the others in the unit are not far behind. You need to clear out the whole unit ASAP. I'm stating the obvious; I'm sure you know that.  

This is a case where engaging the services of a good attorney who specializes in landlord-tenant law is necessary. Do this immediately. The potential for serious fall-out is too great.

Time to renovate the unit or even move in and occupy it yourself! How long has he and the whole gang been living there? Are they on a lease, or month-to-month rental agreement? If on a month-to-month, you will have many more options available to you.

Since it is a two bedroom unit with six occupants, I would immediately establish and enforce a maximum occupancy of 2 people per bedroom. Check the original rental agreement to see if they are in violation of occupancy limits; if so, take action now to force out the extra people.

Who is named in the rental agreement? I bet not all of them are. Chances are, one person secured the apartment and the others moved in later.

I would be watching the property like a hawk to catch lease violations and to provide more of a presence for the well being of the other tenant. Consider installing a security system. Partner with law enforcement. Watch the mail to see who is receiving mail there. 

Keep up with the inspections but don't become so intrusive that they get back at you for interrupting the "quiet enjoyment" of their home.

Be very careful. Drug users are unpredictable. Not to mention dealers and manufacturers. Desperate people do desperate things. Act in a manner in which they don't feel threatened. 

Increase your attention on the property. Use the elements of CPTED (Crime Prevention Through Environmental Design). There is a good chance they will move out on their own when they realize they can't live the lifestyle they desire on your property. If they feel uncomfortable, but not threatened, they just might decide to leave on their own terms, without much fuss. 

Make it easy for them to leave. Offer them "Cash for Keys." If they don't seem to be able to get themselves out even with that, you could offer to help them move by footing the bill on a moving truck rental and paying for the first month of storage unit rental.

Good Luck!