Tenant Occupied Small Multi-Family - Landlording & Managing

Houston, TX · Member since 2017 · 8 posts · 0 votes

Hello,

I just got my first tenant occupied Triplex under contract and the leases don't run out till June 2022. I plan to vacate the two units in the front at least, do some remodel and move in ourselves. The third unit we plan to rent out and manage. This is our first home/property buy and we plan to live in there at least one year to comply with conventional loan and potentially move on and rent the entire property out.

This is my base goal and since I'm new to investing, I'm seeking every and any advise from my Bigger Pockets community during the near future process and managing the tenants, property and remodel. I'll appreciate your pointers on what to look out for now on and best possible path forward.

Many thanks in advance!

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Make a list of all the potential problems you may face in the next year. Arrange them based on which ones will appear first. Then, start educating yourself and developing a plan for handling that problem. Example:

- Late or unpaid rent
- Tenant not communicative
- Maintenance problem
- Tenant wants to break lease early
- Lease violation

If you decide "Late or unpaid rent" is your most immediate threat, start reading about how others handle this situation. Develop a policy of how you will handle it. Then move on to the next problem.

You can accelerate a lot of this by reading a couple books on the basics of Landlord and by learning your state laws. My favorite recommendation is "Every Landlord's Legal Guide" by NOLO because it includes a ton of practical advice and your State laws.

The DIY Landlord Book4.7248 Reviews

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Make a list of all the potential problems you may face in the next year. Arrange them based on which ones will appear first. Then, start educating yourself and developing a plan for handling that problem. Example:

- Late or unpaid rent
- Tenant not communicative
- Maintenance problem
- Tenant wants to break lease early
- Lease violation

If you decide "Late or unpaid rent" is your most immediate threat, start reading about how others handle this situation. Develop a policy of how you will handle it. Then move on to the next problem.

You can accelerate a lot of this by reading a couple books on the basics of Landlord and by learning your state laws. My favorite recommendation is "Every Landlord's Legal Guide" by NOLO because it includes a ton of practical advice and your State laws.
The DIY Landlord Book4.7248 Reviews
Website View Page
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Shivam Patel
OP
Houston, TX · Member since 2017 · 8 posts · 0 votes
4y
@Nathan Gesner Thank you for the direction. This is very helpful.
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Kenny Dahill
Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes
4y
@Shivam Patel, congrats on the triplex!
Since the leases don't end until June, there's not much you can do to move in early. Unless you negotiate with the tenants to move out early.
While the tenants still occupy, I'd take this opportunity to get all your contractor pricing, materials ordered, and schedule figured out. This allows you to start immediately upon tenant move out.
For the third unit, do you want the current tenants to know you're the landlord? Some prefer to keep it a secret so they're not bother all the time. If you wish to keep it a secret, I'd use online rent collection so it also provides a more professional experience. Regardless of keeping it a secret, set your boundaries and communicate them to the tenants.
Best of luck! BP is your place to be if you need more advice.
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Jasmine Delves
Denver, CO · Member since 2022 · 200 posts · 77 votes
4y
I agree with the advice about using online rent collection for the third unit (and going forward). If you set it up through property management software, you can use additional features such as income and expense tracking too. It should be a lot less confusing than using spreadsheets.
I'd recommend having a look to see which app fits your priority (for example, some are geared towards tenant screening, rent collection, accounting, or reporting). Either way, there should be one that helps make your job a lot easier.
Hope that helps!
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Shivam Patel
OP
Houston, TX · Member since 2017 · 8 posts · 0 votes
4y
@Kenny Dahill & @Jasmine Delves, thank you very much for the valuable info.
I think I'm leaning towards using online rent collection. Is there any good property management softwares that you'd recommend and then I'll look in depth to pick one for my need?
Also, on a complete U-turn scenario: If I decide to keep this triplex as a rental (investment) property as is and not occupy it. (Reason: I found out that this triplex have long term (5+ years) tenants in it and wish to continue further, so may be good to keep it renting as is and delay remodel). Saying that, I'll have to look for another primary residence at the same time and get financing on my spouse's name or vice versa. Nervous thought! Is this the only good scenario or are there any other ways to go about this or any flags to watch out for, if I do this?
Also, during financing, I'll have to decide NOW if I need to go with primary residence conventional loan or investment property loan on the triplex. Concerned about this! Any ideas on this?
I'll appreciate any advice on this.
Thank you!
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Kenny Dahill
Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes
4y
@Shivam Patel, as long as you use the property as its intended finance purpose, you should be fine. It would be mortgage fraud if you said primary but used it as a rental. You already acknowledged having to make that decision tho.
I’m a little biased for software solution but there’s plenty of good options out there.
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Shivam Patel
OP
Houston, TX · Member since 2017 · 8 posts · 0 votes
4y
@Kenny Dahill I got you there, Sir. ;) I'll surely be looking into it.
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