All Forum Posts by: Brian Kloft

You mentioned that you are getting inquiries but no applications. Those two are related but only thru showings. You have not mentioned how many showings you have had. If you have had a lot of showing but no applications, first I will ask if you have been following up with the people that looked at it. Ask them why they chose not to rent it. They might tell you that there is something wrong with the place, or the neighbor's place across the street is a crack house so they don't want to live there, or...... They might also tell you that they found a cheaper place. 

If you are getting a lot of inquiries but no showings than it is most likely you are too high on price.

Quote from @Benton Williams:

I am looking to buy a fixer upper. I’ve been seeing some options come through a wholesaler that are multi family and some are rented currently. 

I would aim @ renovating the property and increasing the rents. My girlfriend mentioned that it was sad if the current tenants wouldn’t be able to stay there. I thought it was a little sad too. 

What would your response be to justify the purchase and renovations? 

Unlike what many others have said here there is nothing wrong with your thought process on this and there are some positives. While yes this is a business, but you can also be a human being and respect others too. It sounds like these multi family properties already have some vacancies. What I typically do when I buy them is I will fix up the vacant units to a very nice standard and lease them out at or near top dollar. I fix them up to a quality that justifies that price. If the outside of the property needs fixing up I will do that too. I do not typically kick out any existing tenants just to fix up and rent out their units at a higher price. I will however raise their rents a fair amount each year until we get to what fair market rent would be for their space in it's current condition. Now when the existing tenants move out I then will renovate their unit and push the rent up to the market rates that the other renovated units get. 

One of the benefits of this is that you don't have to spend so much money all at once. I am typically spending around $15k/unit to fix them up and I do it off of my cash flow. I appreciate only doing 2-3 a year. Plus if some of the older tenants have been there a long time, don't cause trouble and are stable there is a benefit to that and not just having all new tenants in a property. 

You can still make good money on your property and have a heart. A lot of what people on here tell you to do is what also gives Landlords a bad rep and often causes cities to change laws that limit Landlord abilities. A lot of these aggressive tactics that the purely business people mention are the reason that some states and cities have created rules that now make it harder on Landlords to run their properties. As far as what your girlfriend's thoughts are, well that just depends on what kind of a relationship you are wanting to have with her and how serious it is now. I am not as harsh as, if she doesn't have money in the deal then she has no input. If she is a part of your life, and especially if she is a big part of your life, then you two most likely have input on what both of you do as that is the way a good relationship works.

I am looking for a basic CRM to help me keep track of the properties that I find while driving for dollars. It doesn't need to be some robust CRM that can do all sorts of things. I have started using a spreadsheet but I would like something that makes it easier to keep track of when I have sent the owners a letter or postcard etc; also to attach a picture of the property and some pdf's of county record documents. I am not looking to do thousands of properties. I am working in a couple of 10,000 person cities and looking for very specific types of properties (3-10 or so unit properties). I am only looking to acquire another 2-3 properties and I doubt the database will ever see 300 properties in it, and it might not get 200 or even 100 properties entered. Again I just need a really simple database. It doesn't need to really do anything for me other than help me be a little more organized. I have been looking at CRM's like Hubspot and Odoo and I tend to get a little overwhelmed because their tutorials all seemed to be geared towards those that have multiple people working on the CRM and all of this automation when all I want is a simple database. Because I want something small, basic and simple I know there are options out there that are free. Perhaps all I need is a pre done template for Hubspot/Odoo/etc. Thanks for any recommendations you might have.

 When the wind hits 30+ the waves will hit 3-5ft. It's usually during winter and not for the faint of heart. You have to love surfing. Depending on the direction of the wind there are some ok breaks.  

Wow, very cool. Of course for the poster, surfing in OR isn't for the faint of heart either. The water is always cold, but at least in the summer it is nice outside of the water and the winter air temps are probably higher than the Tahoe winter air temps.

Quote from @Bradley Buxton:

@Bryan Begun

As a former CA resident living in SLO for a long time now in the Reno area it has more to offer than I expected as first. There are various neighborhoods and areas that offer the community and walkability.  There is surfing on Lake Tahoe if you really love surfing.  

I'd be happy to share some data on multifamily properties and area insights.

 I am not a surfer, as in never once even touched a surf board; but how in the world do you surf on Lake Tahoe?

Personally I would never touch a CA property due to the laws. I know there are those that make money there but to me that risk is not worth it. We have a few properties on the Oregon Coast. I have even recently started a facebook group to help investors on the Oregon Coast connect. Personally we like the Oregon Coast but you do need to keep on top of the laws. While they are not insane like the CA laws they do have some gotchas, which for me as long as I am aware of them don't really bother me because of the type of Landlord we are, while others don't like them. We have been trying to look at the Reno market but I apparently have amental block on actually diving in. I think some of it is that I have gotten comfortable with the 10,000 person towns on the coast that are so easy to quickly get to know that trying to get to know a big city like Reno is just a bit overwhelming. However with that said it is still of high interest to us. We live and invest in Phoenix AZ so we don't want Vegas due to the extreme weather like Phoenix. Reno is nice that it is that little bit cooler but not so cold like Idaho. Reno is much closer to Phoenix in being Landlord friendly and business friendly. We have also tried looking at places in Utah as there is a lot of beautiful land there, but initial looking online made it seem like the numbers just didn't make sense. Our daughter just moved to Bend and from what I have seen it is a great place. We plan to help her find a nice multiplex to buy and live in as her first place. It really seems to have a great vibe and is an extremely outdoor activity driven place. 

From what you have described my suggestion would be to look at Reno and the Oregon Coast. They both have their plusses and minuses. I also do most of the work myself on my property renovations which can be a big plus on the Oregon Coast, however Home Depot is a 1 - 1.5 hr drive away and in some of the cities there isn't a single hardware store open on Sundays. As far as setting up a place for you to live, if you don't find the vibe in Reno you could look at Carson City so you can easily still work on your properties in Reno and sleep in your own bed plus you are close to all of the outdoor activities at Lake Tahoe. Sorry my ost kind of rambled along but it is late. If you want to chat more just let me know as it seems like we are both in similar places, other than I have no family in CA. 

@Griffin Hess Are you still on here? I can give you some good context for what you are asking. My initial background was in Commercial Real Estate and then I expanded into residential real estate. I am more than happy to give you a lot of detailed insight and my experiences, but before I do a long write up I want to make sure that you are still on here and will see it. 

Your insurance agent will most likely tell you that it will not impact your rates, and it may not in the next year or two but it will when probably 2-3 years down the road and you will not be happy with the increase. Also if you go to switch to another carrier they will ask for a report showing all claims so it will follow you for many years, impacting your rates. It is not worth it for something small like $2,500. Save your insurance for something big that makes you hurt. There are some insurance things that don't impact you, like windshields for cars. Most insurance companies will throw $500-$2,000 to someone for medical if they trip and fall on something, as long as it isn't seen as a hazard that should be fixed.

First I am not a lawyer nor do I have anything in Florida so I do not know Florida law. However there are some things that I did not see mentioned. 

1: Have you been given anything that is signed by the tenant stating that they have turned their security deposit over to this LLC? Or is it just a letter from the attorney saying that they did? Your lease was with the tenant, not that LLC and anything that LLC sends you might not be valid.

2: Your lease was with the Tenant. It is a contract between you and her. She can not unilaterally change anything in that lease. Thus her "assigning" her deposit to the LLC might not even be something that she can legally bind you to. Just like when there are multiple tenants on a lease they can't just take someone off or add someone to the lease. I don't know that she can legally put the LLC in her place for the deposit.

3: Typically for lawsuit purposes sending someone a notice via regular mail will not count as service. If they didn't send it in some way that they have proof of service (Certified, Return Receipt, UPS, FedEx, etc) then it won't count as service. Anyone can stick a letter in an envelope and take a pic and say you mailed it but then never actually put it in the mail. 

4: The little bit that I have had to deal with stuff like this in court I believe that anything that the opposing party files with the court, not only do they have to send to you as well, but the court upon accepting it then sends you a copy as well. If the court did not send to you a copy of what they filed on the 24th then the court may not even recognize it as valid. 

Personally I would look more into #2. The LLC is not part of the lease and thus has no rights or claims to anything regarding the lease, unless you ever signed something agreeing to the LLC to become part of this transaction. Thus they would have no standings for a claim. Find out if they even have the right to assign their security deposit to someone else.

Spend the $200-$300 for a half hour consult with a RE attorney and get their opinion. If they tell you that you have nothing to worry about then you can rest easier than all of us non attorneys telling you stuff. It sucks paying the $300 but better than paying the deposit to that LLC.

I know you probably have a pit in your stomach over this and are losing sleep worrying about it and stressed out. Stupid stuff like this is one of the reason many get out of the Landlording gig. Everything you are feeling is normal. In my many years of this (property management company for over 20 years) I have dealt with similar stuff a handful of times and I still get the pit in my stomach and sweats while my stubborn side says do not cave in when we know we are right. Stay strong. It sounds like you did the right thing and you don't live in CA where even doing the right thing you can be screwed. 

Quote from @AJ Wong:

Quick update: Rockaway Beach OR has instituted a CAP on nightly vacation rental permits. Actively licensed rental permits can transfer to new owners but unlicensed properties will be subject to a waitlist currently 100+/- permits over the new maximum. Likely years for an unlicensed property (not commercially zoned) to obtain a permit but typically there are at least a handful of actively licensed listings on market for sale in the area.

 Personally this is the way I think governments should implement these regulations. Don't take away those that already have it or make it hard to sell. If you are buying a property and can't get one for years, at least you know that going in and you didn't buy it, get a license and then a year later told that you are going to lose the license. It will take longer to lower the numbers but it seems the most fair to those that already have a license.