All Forum Posts by: Calvin Stewart

@Richard Brown yes. You'll do an initial estimate before viewing the property, then refine it after viewing the property based on existing conditions and things you may have noticed that need repairs or any cap ex items, and then likely refine it again during due diligence once your offer is accepted.

@Richard Brown this is information you/ your team asks for during the due diligence process of closing.

You'll request leases of any existing tenants to remain after purchase and request the seller to have their current tenants complete an estoppel as a double check.

Rental history can be provided in the rent roll as @Julio Garcia mentioned. Incidents might be harder information to be collected similar with recent repairs. Some landlords might not have record of these types of items.

It's definitely not a rude request, but the more you request before making an offer the less likely you are to be accepted compared to your competition as it will allow you to back out of the deal. Again, usually this information is requested after your offer has been accepted and you are in the due diligence process.

@Anthony McKeen something to add to @John Erlanger comments. It sounds like you would like stability until the renter season peaks again in the early summer, so you could always have them sign a 6 or 7 month lease with their current rent, maybe with the add of a security deposit to the new lease. Then when peak season comes back around you could have a more serious discussion with them about going up on the rent and adding a pet rent.

If there is a serious need for renovations in both of the units, then you might want to consider factoring that into your timeline for making sure the unit is ready to be shown during the summer months.

Make sure you provide the proper notice to these tenants based on your state's landlord tenant laws when having them sign a new lease.

@Steven Wilson, @Andy Eakes, @Kris H. All your responses make sense! I gave the guy a call he was very understanding and said if the slot gets filled up by someone looking to rent he’ll shoots me a text and he’ll let me know if I can come by before or after to check out the property. Appreciate the feedback

A few streets over from my rental property,  a similar unit in a duplex went up for rent at market price.

As a fairly new landlord, it seemed appropriate to schedule a walkthrough with the landlord to check out what types of finishes are used to be able to collect market rent in this area. It also seems like it is a good opportunity to connect with a local self-managing landlord like myself.

It feels like if I am up front with him and tell him I am a landlord a few streets over, he might feel I am wasting his time filling an appointment slot to tour his property. 

How would you toe that line of not trying to upset the landlord, but also trying to connect with someone local?

@Nuo Shi purchasing a property with existing tenants certainly has it's risks, but it seems like you are asking a lot of the right questions to mitigate that risk.

As it has been stated many times before, existing leases come with property, so what are the terms of the existing leases? Month to month or fixed terms? And when do the leases expire? 

1. You can background check and credit check existing tenants.

2. If each estoppel cert is signed by each of the residents in each unit, then it seems like there should not be too much of a concern there. You should not reach out to the tenants directly unless the seller gives you permission to do so. Likely, this process will be coordinated through your agent and the sellers agent or your attorney and sellers attorney. This blog post will help you confirm all the necessary information is included in the estoppel certs provided by the seller: https://www.biggerpockets.com/...

3. You may ask the tenants to sign a new lease, but they may or may not agree to do so. If they agree to it, then go for it. You do want to have a 'lease assignment agreement' completed to transfer the current lease to you as the new landlord.

4. You can ask, but the tenants may also not provide that if they are under an existing lease. You should ask the seller for the 'current rent roll' for the past 2 years for each unit with existing tenants to understand when the rents were due and when the rents were collected. This will indicate whether or not these existing tenants are paying every month and paying on time. You then should talk to them after you close to understand their personal situations.

If it has not already been provided, then ask for the lease to each unit to compare with the estoppel certs. You can always have your agent or attorney ask the seller if you can talk with each of the tenants before closing, ideally this would without the seller present.

Hope this helps and best of luck during the due diligence process of the 4-plex.

@Brennan Doherty

Congrats on starting the real estate journey!

House hacking using owner occupied financing is a great way to get started in real estate. I'm currently house hacking in the Greater Lowell Area.

Feel free to reach out if you have any questions!

All these points are great and I will be sure that I implement these next time I inherit a new tenant especially the hand delivered welcome letter.

That's also a great motto to go by. 

I appreciate the thorough responses.

It seems like having great rapport with the tenants would be a key aspect for sure.

Sharing your plan and asking the tenant which improvements they would be willing to pay for in the form of increased rent sounds like a really simple but smart strategy to ultimately get their buy in before executing the work.

Thanks for sharing your experience and I'll be sure to tread lightly if I do decide proceed in that manner.

When you self-managed most of your portfolio, what were some easy but key steps that helped you build this type of working relationships with your tenants?

@Steve K., it sounds like you have renovated some of your own units with existing tenants living in them. It seems like this would be very difficult and/or you’d have to have the right tenant.

What does this process typically look like for you in regards to preparing your tenant to live through renovations?

What type of work do you typically target for these types of rehabs?