Inherited properties

[Abel Rodrigues]

Like many here I'm new and need to get my thoughts done and see what people make of my situation.

I lost my father last January (2016) and I have inherited 3 multi-family buildings. These buildings are in very low income "The neighbors in...making it among the lowest income neighborhoods in America. NeighborhoodScout's research shows ... income lower than 95.6% of U.S. neighborhoods." 

There are 2 buildings on 1 full block: one is a 3 family (B), 1200 sq-ft/unit and the other is a mixed use (S)with 2 apartments on the 2nd and 3rd floor 900 sq-ft/unit and an vacant store front (its been vacant for 20+ years). The 3rd building (R) is a 1/2 mile away and its a 3 family, 1300 sq-ft/unit. 

The rent ranges from $550 to $850 and there is NO mortgage but no access to what ever was coming in prior to January. 

I have been managing them 100% since January and I'm learning a lot! I work full time 50+ hours a week so it takes me a while to get thing done.

In the past my father has tried for the quickest turn around when a tenant left, generally a coat of paint and a floor fix or two. Usually getting tenants by word or mouth and never doing a background check.

Building "B" 

The tenants have been there from 15-20 years and there are not many problems there. My grandmother, who was the owner, tells me that there used to be many problems however i have not come across any...yet. 

1st floor- pays every 1st of the month and never has complaints

2nd floor- is my only Section 8 unit and i get rent on time

3rd floor- slower payer but not bad

Building "S",

Store front-this used to be my father package store 20+ years ago but has been empty since the early 90's. i would love to fix it up and get it rented but have NO clue where to begin.

2nd Floor- Empty for about a year now, I've done a lot of work to clean and try and get ahead of any problems that may come up when its occupied. i have recently finished all the work and im working on getting it rented for section 8

3rd floor- i have had many problems here, ive already sent a marshal with an eviction notice for late payment and then they paid and ive had many chances to evict them. the scary thing is that if they are not there the whole building would be empty and that scares me more.

Building "R"

My biggest problem here is that it is very dirty, we had a REALLY bad mouse problem that has gotten significantly better in the last 2 months. 

1st Floor- there are about 5-6 kids that live here between 2-18 y/o and its pretty upsetting seeing this place. they are typically good on the rent but they have about 7 motorcycles in the driveway, toys and just garbage.

2nd Floor- nothing

3rd Floor- decent people how ever currently they are about 2-1/2 months behind on rent... and they just had a baby. i may be a sucker but how do you evict a family with a new born......

I guess im looking for any suggestions on what i could be doing to make more income, reduce head aches, anything really! i understand financially im in a good spot having these properties with no mortgage and so far starting at $0 i am well in the green. 

Honestly that just feels good to get all that down

[Thomas S.]

You should either sell or hire a no non-sense property manager to take over all the buildings.

Your post indicates you are not able to properly operate the business and appear to not have what it takes to be a landlord, especially C class.

This is not meant as a criticism strictly a analysis based on the facts you have provided.

1) you have owned it since January and still have vacancies.

2) you believe having no mortgage means you are cash flow positive, not the case.

3) your work schedule does not afford you time to properly manage rentals.

4) B building 3rd floor tenant pays late and is a bad tenant, you consider them to be not a bad tenant

5) empty store front, don't know what to do with it. 

6) S building, 3rd floor, you still have a terrible tenant that you should have evicted

7) R building all terrible tenants that all should be evicted.

You are on the verge of becoming a bankrupted frustrated slum lord and need to get your business in shape with a very strong PM or sell before it gets much worse. You are losing money every month, defiantly negative cash flow you are not even aware of,  based on there being some equity in the properties. 

Reality bites.