All Forum Posts by: Andrew O.

@Jake Andronico I've considered selling, but all of these houses I've already gutted, fixed up nice, and have good tenants. Once the roofs are done, there shouldn't be much else that can be major. I've also never BRRRR'd any of the properties either so if I absolutely had to, I could cash out and pay for the expenses that way. About 8 or 9 units I'm locked in around 2.75% interest rate so I'm trying to avoid that.

@Jonathan Greene When I got into RE I knew it wasn't going to be passive.  I wanted the additional income in hopes of doing this full time, or at least retire from my main job early.  I'm lucky to have a job where I can start early and be off at 3pm everyday with no weekends and I can pretty much take off whenever I need to.  20 units is just an awkward phase where I don't think it's worth having a property manager, but it's also getting to be much managing on my own.  I fix my units up nice when I purchase them so I don't get too many calls, but sometimes luck just isn't on your side.

I think about selling all the time, but I don't quit that easily.  I've opted to vent my frustration on BP and suck it up for another year, then see where things are at.  How much worse can it really get?  A vacation would be nice though!

Good afternoon,

I was just curious how everyone handles the stress of owning rental properties?  Owning RE sucks.  I own and manage 20 units all on my own while working full time with a family.  This past year has been rough with maintenance issues and things breaking, and right when I start to think things are getting better, I have to replace 4 roofs (1 is just a carport), an AC unit gets stolen, and a racoon destroyed an attic.  From all the quotes I've gotten, that's going to cost around $45,500 and it all needs to be done asap.  I don't know how the average person could afford this.  I'm not sure how I'm going to pay for it all quite yet either.  I'm in RE for the long game, but I don't understand how people make money off of rental properties.  It is always one thing after another.

Thank you for all of the replies.  I'm sorry, I normally get email notifications from posts and never got any so I just saw the replies.  I didn't get a move in checklist and the previous owners sent an email with the security deposit amount and transferred that to me at closing.  I ended up deducting $100 for cleaning.  I tried to find local landlord/tenant laws but I couldn't find anything.  There were hairs in the bathtub that I could argue that were his and the cat hair I'd have a good argument that was from his pet as well.   It's definitely been a learning experience and I've learned the importance of having a good lease.  The other tenants all had leases by the previous owner and the lease was terrible.  Fortunately they all expired within the last month so I was able to get them moved over to my lease.

Good afternoon,

I recently purchased a 4plex that was fully occupied.  One of the tenants moved out who was month-to-month that didn't have a lease from the previous owner (he was a family friend just living there).  He only gave a 20 days notice and the house was somewhat clean after moveout.  There was quite a bit of cat hair, dust everywhere, and the bathtub is disgusting.  I don't know the condition of what the unit looked like prior to him moving in.  Should I still deduct a small cleaning fee, or just eat the cost?  I was probably going to charge $100.  He also didn't give a full 30 days notice, I'm not going to take his full deposit, but because he didn't give 30 days would that forfeit his right to the security deposit if he tried to fight the cleaning fee?

Thank you!

Good advice, it's definitely easier to get them out when they aren't in a lease.  Here's the letter I was going to hand-deliver or mail to them this week:

Dear [Tenant],

Due to the increased cost of the mortgage, property taxes, insurance, and maintenance, an increase in your monthly rent will take effect March 1, 2023. Sub-meters will also be added to the water lines and you will be responsible for the water bill for Unit A beginning March 1, 2023. This letter serves as official notice for the increase in rent and responsibility of the water bill for [Property Address].

Current Rent: $425.00

New Rent Rate as of 3/1/2023: $550.00

If you would like to sign a new lease, please provide me with your email address and I will send you an application to apply. Everyone over the age of 18 would need to fill out the application. If the application is not returned by January 15, 2023 it will be considered as your intent to move by March 1, 2023. If you do not wish to pay the increased rent you may decide to seek other housing. If you intend to vacate, please provide a 30-day written notice of your intent to move. If you have any questions or concerns, please text or call me at [phone number].

By signing below, you acknowledge that you received this notice and agree to renew at $550.00/month and be responsible for the water bill for Unit A as stated above or you will provide a 30 day move-out notice prior to March 1, 2023.

Sincerely,

Andrew

I had a quick meeting with an attorney last week and he also recommended hand delivering the notice. He said the notice needs to be treated as if it was an eviction notice and it should be hand delivered or have the letter served. Certified mail would be his last choice. Two of the units I could get in to swap out furnace filters and give the notice then, but the other two I can't think of a polite way to text them and say hey I have to increase rent, can I come over to deliver the official notice. 

Do you hand deliver the notice the first time you meet the tenants? I took your advice from another forum and introduced myself to all of the tenants, did an inspection, and asked if there were any issues. I didn't give them the notice at that time though, and now I don't have a reason to go back over there unless I text them and tell them I have a rent increase letter I want to deliver.

When I list a house for rent I use my Google Voice number, but once I have selected a tenant and get a signed lease I give them my personal cell. I figure if I can't trust them with my phone number, then I can't trust renting to them. I do thorough pre screens before selecting the tenants. I'm currently at 16 units, but once I hit the 30 mark I may consider using strictly my Google voice.

I contacted the city water department and they have meters I can buy for $215/ea and I can install them in the basement so I don't have to dig up the yard. They would just branch off the main line coming in. The only stipulation was the city had to have access to the basement and I had to install a locking mechanism for the meter in case a tenant quit paying. There's also only 2 water heaters currently so I'll need to purchase 2 more so I can split the gas bill (currently I pay gas for water heaters and tenant pays gas for everything else).  The meters will cost $840 and I spent $2k in Pex A tubing, fittings, and 2 water heaters.  I'm guessing it'll cost another $500-$800 to pay a plumber to install the gas lines and vent the new water heaters. I'll do the water lines myself. I should be all in around $3600 tops. 

Since the meter will be read by the city and I wouldn't be involved with anything once the submetering is complete I didn't look into local laws too much other than I can't charge tenants for utilities if they're currently in a lease that says they aren't responsible for utilities (they all have expired leases). Do you think it would be worth it for $3600 or just bill pack tenants for water and sewage?

Wow, that's a big increase. Do you buy close to you in CA or out of state investments? This fourplex is in a small town of a couple thousand people so although $100 doesn't sound much to us, the current tenants don't make a lot of money so it'll be a lot to them.

Sounds good, thank you. This is the first time I've had to inherit tenants. In the letter I wrote, I told them how much the new rent would be and if they would like to sign a new lease they had 2 weeks to complete an application. That way it gives me some time to review and issue the 30 day notice if I don't plan on signing a lease with them. 

Awesome, I'll probably just mail mine via regular mail as well. I'll add the note about it automatically increasing March 1st. I didn't have that, but I gave them 2 weeks to complete applications so I can review everyone's income. If they don't meet the minimum requirements do you think I should send them a 30 day notice or just have them sign a month to month lease and give them a chance?

There's 2 upper and 2 lower units. The basement is unfinished so everything is accessible. I noticed there's 2 3/4" supply lines going up so I'm guessing the upper units are going to be a jumbled mess. I'm not looking forward to it, but it'll save me $200/mo so it'll be worth it in the long run.