All Forum Posts by: Marcus Auerbach

@Andy J. maybe I should not say this too loud, but I dont think it serves me well to hold someone to a contract they are no longer interested in. I just feel it causes trouble and headache, because at that moment you loose any sense of cooperation. So I usually try to work with them and find a mutaully acceptable solution.

Here is what I would do: if they want to leave on March 2nd I would aks them to pay half of March and move out on the 1st or 2nd. This should cover the majority of your vacancy cost (PITI). And most tenats will think it's fair to pay half a month rent if you work with them allow them to break the lease. My other concern with sub-renting and finding someone overnight in general is that you have the risk to not have the right tenant. I like to take my time to find the right person, who really like the place, take care better and stay longer.

Then you have basically the whole month of March to get the unit rent ready and show it for a April 1st move in date. I always like showing empty houses better than when they are still occupied, never sure in what condition you find the place. It makes it a win-win.

Also, March is not that bad month for finding tenants. Activity seems to pick up as soon as the snow melts.

@Andrew J. Sure, I will PM you a good guy.

@Neil P. Ah, now we are getting to the bottom of this. It's not conforming, that's why it is not selling. I would be concerned about a house twice the size and price for the neighborhood. Most people want to be in a matching neighborhood and the same social bracket, income level etc. Even if the adjusted comp would suggest 850k you may have a hard time finding a buyer who wants to live in a 400k area and spend twice the money. I have seen people in my old neighborhood move across the street in the other subdivision because the husband got a promotion. Talk about keeping up with the Jonses. That smells like long holding period and steep discounts. Crazy thought. Can you chop off the second floor and make it a ranch that fits the area? You would have to buy for 200, finish for 100 (incl new roof) and sell for 400.

@David Robertson and @Kyle Hipp thanks for sharing your experience. I am sure its shocking to find out that your basement wall just had been crushed. Did your wife almost have a heart attack when she saw it? Glad to hear the insurance picked it up.

We actually made a decision last Sunday. I have to say after hearing everyone's opinion, reading online and just thinking about it making a taking a decsion quite easy, especially once back on the job and looking at everything.

We gave up about 20% of the square footage by framing about 3 feet in front of the walls and leaving a crawl space. The big advantage is that all mechanics and pipes like gas meter, water horn, sewer lines and clean out are now outside the finished area and accessible from the unfinished part of the basement. This way the drywalling is pretty easy, just straight walls and we have 100% of the block wall accessible and well ventilated, although it's dry anyway. We will have an office room and a TV room with a built in nook and shelfing for the components. In front of the landing we have a storage closet. About 30% remain unfinished and include the laundry area as well as furnance and water heater. Just the usual paint job battelship gray and white. Granted we have not maxed out the potential squre footage, but I feel thats a fair trade of. Hope it turns out the way we want it.

@Robert Obniski I will send you the information via PM. Owner seems motivated and indicated they are willing to negotiate about the price. Depending on the rent you could get it could be worth looking into it. Too far away for me, good luck!

@Robert Obniski funny, I came across a lead a couple weeks ago for a small manufactured home in the Dells, motivated seller, but not my market and I did not feel comfortable working with them. Any ideas? 

@Albert Thornton let me share with you the perspective from the other side of the fence: the investor buyer who is looking for a deal. I have money sitting on the sideline right now and that does not feel good: I need to find a deal. It sounds weird, but investors will tell you that having money sitting arround and not finding a workable deal can make you pretty anxious. I am driving arround and looking at properties almost on a daily basis. I am making offers where I can (I don't do shotgun lowball, the asking price has to be within reach) and I am really, really, really looking to get something under contract!

If a wholesaler would present a deal to me that is workable, do you think I would tell him that the numbers don't make sense just to see if he would be willing to give up his profit so I can fatten up the deal on my side? No way would I risk loosing that deal to someone else!

If I can live with the numbers I really don't care that how much he is making: I will be happy to sign on the dotted line. I know how hard it is to find a deal that's good enough for an investor - a wholesaler has to do that and then beat that by at least another 5k. That is very hard to do and I respect the guys that have mastered this art!

Like @J Scott said earlier wholesaleing is absolutley not an easy startegy and it requires a lot of hard work and a lot of different skills that most newbies just don't have.

I contact every wholesaler that I come across. I call the number on the bandit signs, I sign up on their web page, I answer all their questions so I can can get on their "buyers list". I even tell then to contact me with every deal they have, even if they think it's a bad one. You may have guessed it, I have not gotten a single lead from a wholesaler. 

And it makes sense. Most of the guys are completley new to the business and are fresh from a seminar. They have been told it's easy, but it's just the oposite. After half a year they disapear again. I know there are some successful wholesalers out there, but I have not met one yet. If someone asks me my advise to get started it would be - safe some money and buy a house, fix it up and rent it out. That's probably easier and wil teach you what you need to know to become a succesful and respected wholesaler - eventually. 

@NA Burkart what a story! You have been very patient and cooperative, but some people take this goes the wrong way. Instead of appreciating an accomodating landlord they just sense weakness and keep expanding the boundaries. I have had my share of this and had to learn to act and respond more like a business and not like ... I owe my tenants something for being willing to rent from me?? It seems like we have to go through a few bad tenants before we learn how to toughen up a bit and become more professional.

Read Mike Butler's book about landlording, probably the best read on the subject. He is talking about treating your tenants not like your customers, but rather like your employees. It's interesting and makes perfect sense to me. You start with an application and an interview, next you enter an agreement. The next step should be an orientation, but this is where most of us fall short. Have you ever told your tenant what happens if she does not pay? 

I my case I actually have to front the payment out of my pocket to pay the bank, insurance and taxes. I have told that a tenant once and they were shocked. They seem to think that because you are a landlord you are sitting on piles of money and you get to keep 100% of the rent.

Finally it comes down to enforcing your policies. The most important one is probably paying rent on time, every time. There are a lot of different ways how to encourage this behaviour and its a matter of preference. I have all my tenanats enrolled in autopay, so they dont have to think about writing a check and mailing it and I don't have to go to the bank to deposit them. All I do is checking my bank account on the 5th and updating my books.

I would not worry too much about not extending the contract. I am just a couple miles south of you and chances are we rent in the same neighborhood. I have no problems finding great tenants, even at higher rents and at this time of the year. Granted winter is not the best time to move, but there are always people moving for a number of very different reasons and there are only so many SF's available. Actually right now almost nothing if you look on craigslist. What I have started doing is to adjust the length of the lease so it expires in spring, for example 14 months instead of 12. Tenants have no problem with that, because they don't want to move either in Jannuary.

Hope I was able to give you some perspective as you were looking for and good luck!

@Steve Babiak I have a feeling that the further east you go the tighter all kinds of regulations get. Really appreciate your comment though, now I am thinking again about egress windows for a fourth bedroom on another property. I think I can ad one for about $2500 and wonder what that would do to adjusted values of an appraisal.

@Steve Babiak  we dont have egress window requirements here for rec rooms, only for legal bedrooms.

@Jim Peret  I am with you and I'd rather see what I buy. Personally I have no concerns with a proppertly braced wall, but a first time buyer might get scared, because they don't understand. The word foundation issue comes up in the inspection report and they might just run for the hills. Leaving some space to access the block wall will allow for future inspections and I feel it's maybe not the smartest way of doing business, but at least it's honest.