All Forum Posts by: Alexander V.

We're planning to move to Saint Petersburg shortly. I think it's a great market and feel good about the appreciation, but it does indeed look like it takes creativity to get year 1 cash flow right now. The STR ban hurts.

@Calvin Pringles, I've been looking around Saint Petersburg largely for this reason, I noticed coincidentally that unlike many/most other jurisdictions, their city ordinance doesn't seem to require owner-occupancy to lease an ADU, so I thought the same thing as you. Buy a SFH, build an ADU, have a pseudo-duplex at a lower cost. But then I got some quotes on how much local builders actually charge to build an ADU, and I balked a little.

Actual example: I almost bought a property on the north side for 400k. The home itself is maybe 300k of that and was a 3/1 with 1200 sqft. It has a ~480 sqft detached garage in good shape. So I got a quote from a local construction company to convert the garage into an ADU, and they said 90k - 125k, probably toward the high end of that range. 125k. To finish the interior of a 480 sqft garage.

If an efficiency ADU costs 33%+ of the total value of the existing improvements, it's really hard to make the numbers work. Rent in Saint Petersburg is high... It isn't THAT high.

If I'm approaching it the wrong way and you have secret strategies you're willing to share, I'd love to hear them. 

(FYI I'm working with an agent in St Pete already, but if the first one goes well I'm sure we'll buy more.)

 In my situation, the PM did not attempt to fight me letting them go. 

Tenants have special rights that are typically addressed explicitly in the law. Property managers have no such special protections. However, if your PM is hiring lawyers to harass you, they're clearly litigious and I would question whether it is worth fighting them. If I were in your situation, I'd hiring my own lawyer to call their bluff, but if they don't back down and still seem willing to take legal action on it, it may be in your best interest to just let it go and keep them until their agreement with the previous owner expires. 

People in real estate who constantly threaten legal action rarely would actually win a lawsuit if it came to that, but even if they have no chance, the amount of effort you'd have to put in to fight them likely outweighs any gain from actually winning the fight. I know that's tough to accept, but it's reality. 

I sent a friendly email requesting a more specific notice closer to the date of entry, and his response was "this is your notice of entry." I don't think they want to bother keeping a schedule, and this allows them to shirk that responsibility. The repair team is on-site and a filter replacement from grabbing the part from their storage area to installing it in my apartment would in total take less than 5 minutes, so there's really no other excuse.

As far as quoting the statute, that specific statute unfortunately gives an explicit definition of "reasonable notice," and the definition is purely that the notice must be "at least 12 hours prior to entry." I'm mainly wondering if there is a different statute or I'm misinterpreting it, because it seems wide open for this sort of abuse. It says nothing about being specific, and "reasonable" is not left open to interpretation.

The reason is a simple filter replacement. This is obviously a legitimate reason, but the repair team definitely does not need a month long open interval to walk in and spend 30 seconds to put a new filter in my utility closet. Management are maintenance are not "bad" per se (don't harass anyone and do maintain the property), but I get the feeling that they aren't particularly well organized or professional. I can't think of any reason for giving an open interval like that except as an excuse to not bother keeping a schedule. Keeping a schedule and log of tasks over dozens of apartments takes a consistent effort. 

I just had an interesting exchange...

I'm both a landlord and a tenant in Florida. While I always give specific advanced notice of entering to my tenants (e.g. I tell them exactly what day and time I will be there), my landlord just attempted something that seems unusual to me. He just emailed me that he will enter my apartment "sometime within 1 to 4 WEEKS" and said that this email constitutes advanced notice under Florida's required notice law. The law in Florida is that "tenants must be given at least 12-hours advance notice before landlord may enter." It doesn't actually say that the entry time needs to be specified.

Obviously, a standing notice like this is completely useless. I have no idea what time, what day, or even what week he may choose to barge in. But is such a uselessly broad standing notice legally compliant? Can you really get around the law so easily by saying "I will enter your apartment sometime within 6 months" and then just enter whenever you want since this "notice" was technically more than 12-hours in advance? I wouldn't do this to my tenants anyway even if I could, but it doesn't seem legal to me since the notice conveys essentially no meaningful information. It is not a notice of any specific entry, it's a blanket statement that does not prepare the tenant at all.

It isn't a big deal, but to understand this facet of the law better, does anyone know if this is legal in Florida (or other states that have advanced notice laws, for that matter)?

When you've got an occupied apartment in an area where local rents have increased quite a bit over the last few years, what are the deciding factors in whether you take the initiative to renovate it and increase the rent to the new market rate versus let it sit and accept the lower rent?

In my particular case, I have a tenant who has been in a unit for over a decade. The unit has not been updated in that time, but rents in the surrounding area have increased considerably. He is paying below market rent and probably couldn't afford market rent. My options are A) accept the stability and lesser headache that comes with taking no action for the time being in exchange for accepting his below-market rent, or B) accept a turnover from a good tenant and pay for a renovation in exchange for a significant rent increase (in the ballpark of +15% right now with a strong upward trend).

My inclination is to go with option A and renovate when the tenant chooses to leave or when the disparity between what he pays and what the market rate is gets closer to 25%. My main considerations are 1) this is a good tenant who always pays on time and never complains and 2) the increased rent at this point, though getting to be significant, would still take 4-5 years to cover the cost of renovation.

Tangentially related question: when would you pay cash to renovate versus seek a renovation loan?

The loan officer called one day before closing and said that their "system" would no longer let them give me the loan. He said that he could use projected rental income to lower my DTI in their system, but that he couldn't do that unless I had X amount of reserves in the bank. The only way I could get X amount of reserves was to reduce closing costs, which could not be accomplished without getting a lender credit in exchange for a higher interest rate.

The first time they made a mistake, they miscalculated my cash to close by half. I got a phone that was basically "yeah, no big deal, but your cash to close is actually double what we told you. Hope that isn't a problem. We can help you with that by giving you a lender credit... if you will increase the interest rate." Then one day before closing "oh hey, by the way we won't give you the loan anymore. Can't really say why, but something about DTI. We could help you with that by giving you a bigger lender credit... if you will increase the interest rate."

They had locked in the interest rate both times and offered me the loan both times, but then both times they came up with reasons that forced me to "agree" to raising it and acted like they were doing me a favor. There's no way I would have agreed, but they sprung it on me after it was too late in the deal to look for a different lender. I had already chosen them based on the rate they locked in and the figures they had given me, which turned out to be wrong twice. I also lacked the reserves that I could have had based on their faulty calculations. I could have had the liquidity if I had anticipated it, but they were wildly off in their calculations.

I recently had a nasty lender experience. I had been pre-approved for a loan, everything was golden, I'm a low risk loan and had low DTI. Nothing changed since being approved and going through the entire loan process, yet 1 day before closing the lender called me claiming that they ran the numbers through their underwriting system again and it suddenly said I was no longer qualified for the loan. They claimed that they couldn't tell me what changed or why I was no longer approved, but--guess what comes next!--accepting a higher interest rate should fix it. This was the second curve ball that they'd thrown me, one in the middle of the transaction and this one is at the very end of the process. If I had any other option, I would have told them they'd lost my business, but I had no other options (and they probably assumed as much).

So for future reference, is it legal/fair to get pre-approved by 2-3 different lenders and go through the loan process with each lender so that if your primary lender does something shady or incompetent at the last minute you've got other options on standby and can quickly switch? Switching at the last minute without having a backup that has already been working through the process in parallel could take weeks and the deal could fall through, but having two or three lenders who are all planning on giving you the loan and have been going through the entire process would make it a non-issue.

The way this experience worked out, I had to take the higher interest rate just to avoid losing the deal. This amounted to me having to pay an additional $100 per month in P&I for the entire duration that I hold this property just because the lender "accidentally" realized this was the "only way" at the very last minute when I was in a corner and no longer had time to seek other lenders. The deal was still good, but this scheme was no minor error--it cut my cashflow by about 25%. I'd like to protect myself against this sort of nonsense on future purchases.

I've never been in this situation before. Honestly, I believe this management company is huge so they may not fight me over it since this is not a large property anyway and wouldn't be a major loss to them. I think the best initial approach would be to casually let the PM company know that I'm not going to need their services at this time and that I'll keep them in mind for future needs. They may just shrug and say ok to avoid burning bridges. If they try to dig in, I'll follow your recommendation and consult a local RE attorney.