All Forum Posts by: Deanna O.

Look, in a seller's market every listing is a guaranteed sale. In a buyer's market, every qualified seller will be a guaranteed sale. We are currently in a seller's market. Your realtor could spend 80 hours a week trying to find deals for you, and net exactly $0 for her efforts. Cash-rich would-be buyers are a dime-a-dozen right now, while properties with potential value-add in hot markets are extremely scarce.  

If you've signed an exclusive with your current realtor, ask her to release you. If she balks, talk to her broker. If you haven't signed anything, tell her, in writing, that the relationship is over. Get yourself a different realtor (different agent, different office, different broker, different everything), or, better yet, start working with the wholesalers and find an agent that you can work with just on the paperwork side once you've got a deal you like (reduced commission, of course, but you probably do want someone knowledgeable looking out for your interests). Maybe consider working with a realtor/investor who is more active in flipping. You don't seem oriented to the "find" part of the deal, so you need to find someone with a reason to put in the effort to find deals for you. 
As a hint, since you seem to regard cash as your super-power, you might zero in on the "cash-only" parts of the market, such as probate/unfinanceable properties, foreclosures and pre-foreclosures. Less profitable than in times past, but at least you won't be competing with conventional-financed buyers. 

But of course you already know the answer. They are trying to guilt you. If you want to cite the BP verdict so you don't feel guilty, you have our blessing.  If you want to give them the difference between fair market rent and what they wanted to pay, go ahead. If other family members are pressuring you to rent to them, suggest that they offer to co-sign for the the deadbeat to rent from some other landlord. 

The  "why" matters a lot - in the hospital for 2 months is different than "I didn't have to pay because of Covid". "Lost job, have new one" is different than unemployed for 2 years, not looking. 

If you decide to keep tenant (and they have been promising that they "will" make good on the back rent), maybe ask for seller to assigning back rent to you as an asset. This has a value of about $0,  but it might be an added incentive if you have to do a cash-for-keys. $thousands of debt going away isn't nothing. 

For what it's worth, I always explain to my new tenants that I am responsible to my future elderly self for the management of my properties, since that is my retirement fund. I'm not there to rip them off, and my goal is to provide great housing at a reasonable rate, but that I DO have to run it as a business. I also tell them that I WISH landlords made as much as everyone thinks they do.

Absolutely find out what rent controls are in place. Do a web search, call city hall and look up "tenant's rights" websites. Rent-control is one of the due diligence items that affects the value of rental property so much that if you can't raise the rents you may want to reconsider purchasing. Your realtor SHOULD know this, but it's your financial derrière on the bottom line, so to speak. Here in CA, there is even state-wide rent control based on the type of ownership -- most residential properties owned by an LLC, REIT, or Corp are under rent control, as are all multi-family no matter who owns them. The law was passed last year, and with so little fanfare that most of the public isn't even aware of it.

You do need to find out if it is even possible for your existing tenants to pay closer to market rent. Filling out an "application" isn't unreasonable (though skip the paid credit check - not relevant, since they have already been paying the rent). No one will LIKE paying more rent, but if they CAN'T pay more that may change how you approach things.  A previous post suggesting notice that rent will be going to fair market in predictable increments has a lot of merits, since it gives the tenants time to find a new situation, but motivation to move if they need to. You can afford to take awhile, since you probably don't want to be rehabbing multiple units at once, and any sort of eviction will wipe out years worth of rent gains.

Personally I'd take everyone to month-to-month. For your lowest two rents I'd give them very long notice of the rent increase (60-90 days). If they can't afford to stay, you want a wide-open door in front of them so they can move as soon as they find a place, so I would state that during that 90 day period you require NO notice -- if they find a place you want them to move ASAP. You won't be able to rent a 30 year occupied unit the next day anyhow, so it's not costing you anything, but it is making their move frictionless from your side. 

You aren't the "evil landlord". Pretty sure that 5 years from now you'll be wondering how you ever thought you would even come close to breaking even with the now-current rents -- older buildings virtually ALWAYS have some unexpected repair. 

Personally, I would let the brother know what you plan to do (raise rent to FMV at end of lease), find out if he intends to stay at full market rate, then screen appropriately if he wants to stay (the current lease doesn't get changed, he passes the normal background check, and pays full rent on the new lease he signs after the old one ends--or goes month-to-month).

That you are having to ask about basic lease questions raises some red flags. NOLO press has some really great books on landlord law for a lot of different states. Start with learning what options you even have, then figure out what makes sense for your situation. As a general rule, you can "bribe" tenants in any way you like, ie you can offer cash-for-keys (they agree,They leave, you pay,  everyone is happy, no problem). 

I've successfully used a "declining value" model before-- if they leave by (30 days from now) they get $XXXX plus prorated return of rent, but for every day that passes after that the amount is reduced by $X. 

I just did Lyft for 3 of the trips, and rented a Uhaul for the 4th one. I needed the space for gear anyhow, and ended up paying about $108 for the Uhaul, and $60 for the trips to and from the airport. Lyft saves a ton of time vs rental car at the airport, and several of my flights were timed pretty close on time. Turo was running $400-ish, and was sketchy about insurance coverage (this was a work trip).

Ah wait. Just re-read; if it appraises at $350 you pay $375 and they agreed to that. So now you want it to appraise for $350,001 LOL. 

You've put a top and a bottom on the amount (good), but you can't perform if it is at the bottom of that window? Hm. Please tell me that you can perform at $350, it's just that it will simply be undesirable, unpleasant and painful, not impossible. If you can't perform at $350 your realtor shouldn't have let you agree to it. 

Nobody goes to Electric Daisy, Coachella or Stagecoach for the tent. They go for the show and the ambiance. They pay $600 for the tent because they don't want to leave the party. 

Burning Man they spend $Thousands to be at the party. If you can make your glamping experience a "must-experience" party you'll probably do well.  

In the short term, you are very likely to have a moderate number of guests looking for exactly what you would want (birds of a feather flocking together, flavor of the moment, and all that). Over the long term, maybe consider some "specialty" weeks. Golden Door Spa does that -- there are "men only" and "women only" sessions (which just seem like a very, very expensive sort of adult summer camp to me, but whatever). Maybe you could be no-pets most of the time, but have a couple of  "pets welcome" weeks in the winter (110 degrees +dogs isn't a good combo anyhow). Maybe "no kids" most of the time, but "tweens-to-teens allowed" last weekend of August or Easter. That would be especially easy if you already have themed zones -- allow teens in one area (they would all rather be together anyhow), or batch by age.  That's one of the busiest times for family vacations, as everyone who procrastinated tries to get that last family vacation in before school starts. Having an age limit would eliminate dealing with screaming toddlers or 5 year-olds having melt-downs. 

You might have a "buy out the campground" option for groups of friends, especially mid-week, and while you are still starting up. If you have excellent wifi, the Covid "work-ation" has been getting pitched a lot at some of the higher-end 5-star resorts.

I'd also look at other similar areas (Joshua Tree) and see what has and hasn't worked. Transport will be another consideration, at least short term. Rental cars are insane right now. Over the past few months I've been dealing with quotes of $4-500/day in places like Austin and PHX, and then, "actually, and no, we don't have any", even at that ridiculous price. I ended up with a UHaul van. 

You haven't given the most critical piece of info; without knowing what rent control laws are in the location of the property, no one can give good advice. If full rent control is in place, and the tenant can say "um, no, Thanks.  I'd rather stay the rest of my natural life here at $600/month", the value of the property is pretty low. If you can (legally) just give 30 or 60 day notice, not so bad. If you have to move into the property in order to get rid of tenants that's a different equation.