All Forum Posts by: Andrew Pfleger

I currently have 131 units... those units are spread out between 21 different property locations. From as small as a duplex all the way up to a 56 unit complex.

With that being said I have a 5 unit building cash flows very well....when fully rented and everyone is paying their rent.

It’s in a similar area as at least 35 other units we own. However, the one main difference is that rent and utilities are all covered with one payment. None of the utilities are sub-divided. There are 3 floors. The 1st floor is a large 3BR apartment with 2 1BR apartments on each floor above that. So 4:1BR apartments in total and a 3 BR.

We currently are in the process of evicting 1st floor tenant. Long story short he paid $1000/month (utilities included) for a few months and then “lost job” and was trying to get back on feet. We finally decided to evict. In the process.... then the 2nd floor tenants both have job issues and are at least a month behind, 3rd floor tenant left after not paying last month rent and remaining 3rd floor tenant also a month behind.

As owners we are as on top if the rent situation with all of our tenants and we dont let up. It’s not a management issue (we don’t believe). It may have been a vetting issue but they all passed screening and a decent application process.

Out of the gate we need advice on a RUBS system that can alleviate pain or help in someway. Outside of totally investing in actual metering for each utility (high cost) we are losing money on this property like no property we own. It seems to be an outlier in our business.

This post got long so if I need to provide more info I’ll be happy to. Otherwise go... and thanks in advance

@Matt Mainini

Totally understandable since you’re a “newer” investor (if I understood correctly) with much to learn.

However, I’d leave well enough alone. Don’t be a helicopter landlord. Follow the lease. I have over 100 units and with that comes 100+ different personalities. Some will get under your skin. At the end of the day you gotta realize it’s business. And in any business the main thing above all other things is how you handle people. My wife and I recently had a baby and there’s all kinds of different “momma bears.” Sounds like this one is pretty private, possibly on edge from lack of sleep (you may have walked in and through her whole house after she finally got the baby down or through some kind of stressful fit). Don’t take it personal. If she says she knows how to handle a home make her price you wrong. If it were me I’d pick up rent or have the tenant send electronically and until they missed a payment they would be on auto-pilot. I invested in real estate because I wanted to work less not more. So causing problems for my tenants and having to unravel issues is not my ideal way to spend an afternoon. Let alone going home to let said tenants attitude keep me on edge while I’m at home with my family.

Outside of that I’d buy more stuff you didn’t mind someone renting. You’re emotionally attached to this property which might hinder you from keeping business as business.

Keep trucking.... everyone has to learn different things different ways. I’ve got a couple tenants who are driving me absolutely nuts at the moment. Both are in the process of being evicted but the amount of rent not collected seems to be eating at me.

@Troy Zsofka a duty to society? As if his eviction status will all of a sudden be the correction in the societal downward spiral?

I don’t disagree that he needs to learn the process but at what cost? His livelihood? If he can pay the tenant now, move on in a matter of weeks or less why would he not do that? Verses the process (again) of getting a notice filed, then waiting and then potentially waiting some more... this process could cost him an additional 2-3 months rent or more. (Feel free time step up and send him some extra cash as you “pontificate”).

This is a business. We make business decisions. If it’s good for his business to give the tenant cash for keys he should do that. Because it could mean the difference of him keeping or losing the property. Who knows what the tenant may do to the property given more time in the unit during the eviction process...

I get your point but that’s why we do thorough background checks when we are vetting a new tenant. Ie calling their precious landlord(s)... there is a place for last place of residence on the app and if the timeline doesn’t line up or someone refuses to give me a previous landlords name then “next” move along.

It’s not up to him to worry about this potential menace to society when we all know what we are getting into as property owners and if we as landlords do the proper screening on our end theirs a really good chance we’ll avoid most of this. Not always but a lot of the times.

He can learn the process from inception the next time a tenant is in the beginning stages of an eviction verses having to start all over again after months of lost rent.

Again, I don’t disagree with your premise but the reality is not a reasonable solution if said tenant is willing to walk away this very weekend for a few hundred dollars given that option.

@Hani Alomar

Don’t wait... go look, run the numbers, if you buy right then you can semi recession proof your purchase.

I’m finding plenty of property that beats that criterion in southern IL and the rents are low. If I can make it work on the low rent already in place I can def make it work on increased rent numbers.

It was mentioned at the BPCON this year that people typically go broke (if they do) because of their financing. Get your financing right and you’ll more than likely be just fine.

But don’t wait... jump in.

@Steve Yi

It’s been mentioned already but cash for keys may be the only option you have... you’re going pay the attorney or the tenant.

What’s the easiest and fastest?

Just get it in writing and tell them to “get to steppin” -Martin 🤣

@Alex Smith Thanks! pretty much what I was hoping for... I may reach out and ask for some additional help when I get the software. 

Currently purchasing a 56 unit property and seller is utilizing Appfolio as their property management software. We currently are seeking software and wondering if there's a best way to transfer current tenant info etc from one owner's software to another quickly? I'm sure theres gotta be a way... Let me know how if so and what youve done in the past if youve encountered this. Appreciate all the help!!

@Clayton Mobley Im under the impression that his 1031 is flexible at this time. He is an investor in a new build and when we briefly spoke he mentioned that it was opened up to invest more than previously expected. He's trying to figure out when he needs to call it. It's not a specific property listed that he's trying to hurry up and get under contract. Our meeting is scheduled for tomorrow afternoon and I'll have more to go off of. I don't think he's particularly worried about it actually going through. I think he's just seeing an opportunity to fulfill a couple of things at the same time (the sale of this property and the option of 1031 into his current project). He's an older investor who knows he needs to be more liquid at this point in his life.  (my initial thought)

I'll try to provide more detailed numbers, timeline etc. 

@Clayton Mobley I will give updates as they arrive. I knew generally this was pretty vague but wanted to get some general ideas of where to start prior to talks. At this point I’m under the impression his 1031 is just him adding to a current deal/new build already underway. I’m vaguely familiar with the 1031 strategy. Know the pros but not necessarily all of the rules that apply since I’ve yet to do it. My partner is a CPA and I tend to defer those things to him. Thanks for initiating a discussion. We’ll be in touch.

Recently was brought a deal that may make quite a bit of sense for my partner and I. However, we weren’t actively looking for anything at the moment. We are letting a few things settle and trying to build cash flow at same time. Then out of nowhere an investor called us with a decent size pocket listing. I guess he was brought an offer and knew we had an interest if ever the opportunity presented itself. He’s hoping to 1031 the proceeds from this sale into another deal. We are planning to sit down later this week but I’m thinking his figure will be 2 million or more based on previous conversation. Need thoughts on best way to approach this. It may not work but if there’s a way I’d imagine someone here in the room can answer as to how it could. Thanks!!