Inheriting Moderatley Normal Tenants in a Cash Cow...

[Pete Fiannaca]

Hey BP - 

Soooooo stoked to say that I just had an offer accepted on a 3-unit home this morning. The 3-units are so important to my wife and I in that, 1) it puts us past the goal we set for ourselves on Jan. 1 this year and, 2) while not financially free, it is going to allow my wife to spend a year home with our two babies.

Because I know this community loves numbers...

Purchase Price: $165,000

PITI + 10% CapEx: $1500/Month

Apartment 1: Occupied at $750/Month, Market rent is $800-$825

Apartment 2: Occupied at $950/Month, Market rent is $1000-$1050

Apartment 3: Occupied at $1150/Month, Market rent is $1250-$1300

Projected COC Return, Year 1: 72% (WOW)

Current Net Cashflow: $1350/Month

Three Things...

1) I spoke with all three tenants during my initial walkthrough of the property and they all seem... normal. Weird, right? We hear stories all the time about inheriting terrible tenants, but the ones I spoke with were actually communicative and quite transparent. Knowing that I (seem to) have decent tenants already in place, what are some general thoughts about keeping rents stagnant for a period of time, vs. raising them slightly, vs. any other creative ideas out there. 

2) What have some landlords here done in the past to address the needs of inherited tenants upon property acquisition? I'm a total people person and, though the money is great, I'm really in the business of making people happy and fulfilling a need. It's not crazy for me to order a pizza and wings and schedule a dinner for my tenant and I one-on-one to talk about improvements needed to a property, wish-list items, etc. Anyone here utilize a SUPER personal approach to assessing tenant needs (especially with tenants you may not have placed in a property yourself)?

3) Lastly, just wanted to SHOUT OUT to this amazing community and say, don't ever stop chasing your dreams! Timing and finances were all wrong with this property acquisition, yet everything seemed to work out ever so perfectly. BP Podcasts, blog posts, and books have given us the will to push through some precarious times. Could not be more thankful to the contributing members of this community for, if nothing else, just the raw motivation to take charge of our future!

Go.Get.It.

Pete