All Forum Posts by: Josh D.

@Account Closed

That it is difficult to evict tenants in California? I've read articles in the WSJ about tenants fighting landlords over raising rents and/or selling their properties for development. My brother lives in San Francisco and told me landlord's horror stories. So I assumed California was very pro-tenant.

If I can evict a tenant quickly I'm more likely to take a chance vs. if it takes me 6-months to evict a tenant I'm only going to rent to the most credit worthy individuals.

I would immediately serve her the required notice to pay or vacate (in Florida its a 3-day notice) and let her know you will proceed with eviction if she doesn't pay June's rent. If she cares anything about her credit I would think she would want to avoid this.

What happens if she decides not to move after her security deposit has been used for June's rent? Then you'll be forced to evict her and have no security deposit to offset your legal fees and lost rent. When you haven't been paid time is not the landlord's friend. Its not "chest thumping" or "showing dominance" as one of the previous posters mentioned, its about being proactive and not cutting a hostile tenant undue slack that can cost you time and money.

I would tell her she needs to agree to pay a lease termination fee equal to one months rent of $1100 and you are doing her a favor as she is technically liable for the entire value of the lease. Tell her you will have costs because of this, including: lost rent, leasing costs, advertising costs, etc.

Make her sign a document stating such and stating the exact day she agrees to vacate. If she doesn't agree to it, I would serve her a 3-day notice immediately (after she doesn't pay for the month in question) and tell her you intend to file an eviction which she will be liable for all of your court costs and attorney fees.

I had a tenant email me last night stating they are moving back up North and to use their security deposit as rent for the month. I'm serving them a 3-day notice tomorrow and already told them this is unacceptable and I intend to start the eviction if they do not pay.

I'm in Florida where you can evict people relatively quickly (3-4 weeks) and I take people with bad credit all the time, just no evictions or criminal history. A lot of people have bad credit which is why they are renting but I would be extra cautious in a market where eviction isn't easy.

Since you are in a place like California where it is difficult to evict tenants I would rent to a quality tenant with good credit for a little less money.

You can only deduct damages beyond normal wear and tear as Walt said but if a pet urinated on carpets or chewed them up and they must be replaced I would charge them for the entire cost of the new carpet. Really bad cat or dog urine can be really hard to get rid of as it will soak into the concrete below the carpet and you'll have to tear the carpet up and treat/seal the concrete.

I haven't had too many problems with carpet as I would rather spend the money to tile an entire house once than deal with cleaning and replacing carpet constantly.

Whatever damage the pets did in excess of the pet deposit you can obviously take out of the rest of the security deposit and if that still doesn't cover it let the tenant know they owe the balance and you will take them to small claims court if they refuse to pay.

If you'd rather put the money towards tile (that is what I'd do) just get a quote for replacing the carpet so you know how much to charge them. I typically don't provide quotes or receipts unless a tenant challenges my security deposit claim.

I agree with K Marie, get title insurance with a warranty deed. If he wants to sell via quit claim, he's got something to hide and likely wants to unload a problem on you.

I agree with Jon, I would start off a little slower and get some experience and success under your belt. If you try to do X number of deals, you probably will and some of them will probably turn out to be losers because you lowered your standards to "get all your money out there." I've seen hedge funds do this and buy sub par properties because they have quotas to hit and are investing OPM (other people's money).

I think you'll have a tough time getting a bank to lend to you with no track record but they may if you have excellent credit and a lot of cash. Perhaps try starting off with a very conservative LTV, like 50%. This way they can get comfortable with you and your track record. A local bank in Tampa will even lend non-recourse on rental properties at an LTV of 50%.

If you can't get any banks to lend to you, I would try hard money lenders. I know they are hungry for deals in my market as the number of rehabs have slowed down (because of high prices and low inventory). The guys I know typically lend at 10% and get paid a minimum of 2% of the loan value (i.e. if you pay them back 30 days after you borrow the money, you owe them 2% of the loan amount).

As you build your track record make sure to document your success with before/after photos and buying/selling HUDs to show potential lenders in the future.

Good luck!

@Spenser Harding - Even at $1100/mo. its not very good for a $100K investment in my opinion. You'd be better off buying SFR that will rent for $1100/mo. and cost $100K. You'll get better quality tenants, only have one tenant to deal with vs. two, you'll get better appreciation, better financing (Fannie Mae has stricter guidelines/higher pricing for 2-4 units vs. SFR) and have the option to sell the home to an owner occupant vs. just an investor (in theory you could sell to an owner occupant with a duplex but not likely).

The biggest advantage in my opinion is you'll attract better tenants. I have some duplexes and I've noticed the tenant's don't seem to stay as long and are typically not as quality.

A deal I've got in my pipeline right now is a 1500 sq. ft., SFR 3/1 block construction in an up-and-coming part of Tampa. $81K purchase $25K rehab (including adding another bath) and will probably rent for around $1400-1500/mo.

If the tile is in good shape and on a concrete slab I wouldn't think it would be a problem. I'd probably just clean it well with bleach and/or baking soda.

But if this is your first go around with mold its probably a good idea to get a mold "expert" to check it out but be careful who you use because a lot of these guys are con artists that will try to scare you and sell overpriced remediations. We had one guy that rolled up in a Ghostbusters van and tried to con us into paying him $7K to use his mystical equipment to fix a fungus problem under a house. He acted like he took samples and got the results back within 24 hours (which I found out is impossible) and "our situation was much worse than he initially thought". In the end my partner and I did it ourselves for about $150 worth of fungicide we bought at a cleaning supply store.

Try to find someone that will just do the testing/consulting with you and isn't also a contractor that does the remediation, this is your best shot at getting an honest assessment of the mold problem. I found a good guy in Tampa by using Angie's list. Or have more than one company come out to assess the problem.

I do not accept checks for first month's rent or security deposit, they must pay with a money order or certified bank check. A new unproven tenant could bounce a check on you, they'd be in the property and then you'd have nothing and would have to evict them.

I typically will accept checks for rent after the first month until a renter bounces one on me and then they must pay by money order or electronically. I'm also very aggressive in collecting the NSF fee, $45 even though my bank only charges me $12.

One downside to money orders is I've had tenants say they mailed them and I never received it. Because a money order is almost like cash it typically takes 30-days to cancel a money order and get a refund. So the tenant says "I don't have the money to pay the rent because the money order was lost in the mail" and they show you a stub for a money order for the rent.

This happened to me with a relatively new tenant (been in the property 1-2 months) and they ended up burning me and I evicted them. Just because they show you a stub for the rent amount doesn't mean anything, they could have wrote the money order to their name and then cashed it. Funny enough this happened to me again 3-4 months later with a different property. They said "I live pay check to pay check" and couldn't pay until after they canceled the money order. I told them nothing personal but I had been burned before and I would be forced to evict them if they didn't come up with the money and miraculously they did.

In the past I had my tenant's setup electronic payments using the service my bank (Chase) offers but sometimes the payments would be "pending" for up to 5-6 days and the tenants could cancel them before they cleared. I had a "problem" tenant do this to me.

I now use a service through my property management software where they pay electronically and it clears much faster or they can pay at any 7-Eleven or Ace Cash Express using a coupon I mail them. It costs them $4 to use this option but its nice because the payment shows up immediately and tenant's can conveniently pay same day without having to use the mail or setup something electronically (for those tenants who are technologically challenged).