All Forum Posts by: Carleen L.

Hello, hive mind! I have a deal that I could use some feedback on from the group.

I specialize in SFH, and recently ran across one for sale a block away from my latest acquisition. I looked it up and realized that the property owner also owns a second SFH nearby that I have had my eye on for months. I asked my realtor to check and see if they would be interested in a package sale. They said yes, and came back with a price much higher than I expected. The ask for the one currently listed for sale is $85k. The package one they want $90k. The $85k is 2bd/2bath, walk in closets, no garage, $825/month, and is appraised by the city for $74k. The $90k is a 2/1 with reach-in closets with no doors, a 1 car garage, renting for $850. It is appraised by the city for $63k.

Both houses have tenants already, and are in similar state of repair with recent floor replacements and in moderately good condition.  Both houses were purchased around 2011, neither seems to have any other major repairs/upgrades beyond the flooring. 

Because this is a package deal, and they hadn’t listed the second house, I was expecting something noticeably cheaper. Their package asking price price is  $175k, I was hoping $145k or at least $150k.

Am I being unreasonable in thinking this should be much lower? I can’t understand how a 2 bed/2bath walk-in closets asking price $5k less than a 2/1 with a garage. 

If you were making a cash offer, how would you structure it and how much would you offer?

I wasn’t aware that the new property would have the same basis as the first. Does that mean depreciation continues at the same level?  I’m only able to claim around $3k in depreciation, and with no mortgage or repairs, I’m paying taxes on almost the entire income (less real estate tax and income).  

I was hoping to free up some cash. As I mentioned, I wanted options beyond taking out a mortgage.  It sounds like you are saying I have to pay capital gains, and the only way I see to avoid it is to move back in for 2 years before selling to qualify for the primary residence exemption. As a single person though, I would still have to pay capital gains on the gain beyond $250k. 

Just looking for legal ways to keep my money!  :-) 

Hi!  I have a rental out of state that has dramatically appreciated in the 24 years I’ve owned it (paid $110k, MV is $340-375k). It’s been a rental for the past 15 years, and is fully paid off as of 5 years ago. It rents for $1750/month and has had the same excellent tenant for years. I’m thinking of selling to pull some money out, but know I need to do a 1031 exchange to avoid paying capital gains on just about the entire sale price. My question is:  can I then turn around and sell the new 1031 property and keep some of that money liquid?  I assume I would have to hold the new property for awhile, but how long?

Assume I need a big chunk of cash and don’t have a W-2 job/can’t get a mortgage against it. The question is can I ever pull that money out without paying capital gains?

Thanks!

Yes, I would charge extra for an outdoor dog. I’m like Brendon and charge both a pet fee and a pet deposit. The pet deposit is refundable if there is no damage.  I encourage landlords to charge both if allowed by state law:  you add a little to your pocket, but you give the tenant an incentive to prevent and/or repair damages themselves to get their deposit back. Much less trouble for us landlords!

I’m sorry you are dealing with this mess (and trolls!). Most days, being a landlord is great; some days it sucks. 

I think you did the right thing by letting the new tenant out of the lease. And while moving is expensive, I don’t think I would have paid anything extra, I would have pointed out how nice I was being to let her out of the lease so early. I’m curious though...was the second hand smoke not noticeable when the mom tenant was looking at the property?

I’m glad you are getting rid of Smokey. Getting rid of carpet and repainting will help, but you will also need to have the duct work cleaned. There is an aerosol can of some product called “Ozone” I believe that can be purchased at an auto supply store. Essentially you spray it, then leave everything shut up tight overnight. You will need to do it a few times. There may be something better than that too, but I’ve had some luck it it. It’s supposed to be dangerous, so read the label.  In fact, maybe you could look at disaster remediation companies. Find out how much they charge, and what they do for the money. You may decide it is worth it to hire them, or get ideas on how to do it yourself. 

I think too many people think getting a property manager is the solution to every problem. These are the same people who end up getting taken advantage of by a property manager because they didn’t want to deal with it. Being a landlord is a job, and when you have too many units to handle yourself, get a property manager. Sounds like to me, you’re doing fine. Good luck!

I am sorry for your troubles, and would be interested to hear what the tenant says. I do not have a property manager, but have interviewed three and just don’t think I’ve found one I want to work with yet. 

The first one charged one month’s rent to locate a tenant, required a $1000 deposit for future repairs that I would not even be notified about in advance, and would be replenished from the following month’s rent along with 10% management fee before I ever got any funds. For a rental property at $1500/month, it was possible I would never clear more than $350!  And that was before taxes/insurance, etc. I did not hire him. 

The second property manager also took first month’s rent as a tenant placement fee, 10% management fee, kept any late fees for herself, would not give me copies of the lease or tenant application. She charged a $75 to visit the property, and an additional $50 every time she met a repairman at the property. Said that the agreement I signed gave her the authority to rent to a tenant of her choosing, and I would never even see the lease. I did not hire her. 

The third property manager took the first month’s rent as a placement fee, only charged 8% management fee. The lease agreement was also between his company and the tenant directly. He would not contact me for repairs under $2000, and would not use my contractors. 

I find it quite easy and comforting to manage my own properties. I know my tenants, I hire my own repairmen, and I keep an eye on how things are going. I even do my own minor repairs (think 10 minutes or less). I’ve been a landlord for 15+ years and have had fantastic tenants. I hope you get this straightened out soon. 

Firstly, I’d like to express my sympathy for the destruction of your property and loss of income. This makes being a landlord unbelievably stressful and I feel your pain. 

You simply cannot shame him publicly. This is a battle you will ultimately lose. Future tenants will learn of this tactic and may be reluctant to rent from you because they perceive you to be petty and vindictive. Or the judge will get wind of it and rule against you. Either way, you lose. 

You can and should report him to his superior officer, but not by phone. Do it in writing, preferably both electronically and via US Mail. It can then be filed in his records and stay with him for his military career. But I caution you against being so angry in your email. State the facts calmly and with as few adjectives as possible. This is a business transaction with a representative of the US Military. For example, I would write something along the lines of the following:

1. Rent was not paid in accordance to the signed lease agreement.  Amount owed for back rent is $x. 

2. Marijuana was used repeatedly on the premises. 

3.  Appropriately $x of damage to the property. 

4. Items were stolen from the property upon vacancy. 

You likely won’t be able to prove the extra people/dogs were living there, so I would not list those things. Be prepared to prove every accusation with photographs and estimates. Be as unemotional and business like as possible and do not argue with this person. No matter how angry you are, you will never “win” and get this guy to apologize. Just get your money and move on to the next tenant. 

Good luck to you. I hope your next tenant appreciates your house.

You say these are minor issues (although I wouldn’t consider a/c issues minor in Houston!), but I’m wondering how many times you have contacted the PM?  Is it possible he considers you a nuisance?

Check your lease for more info as to how to contact for repairs, etc. It may be time for a face to face visit with the PM and ask directly why your repairs are being ignored. Don’t be emotional, just business like. 

Lastly, there most definitely is a “good old boy” club in Texas, but it is shrinking rapidly. Don’t let your boyfriend handle it because then you will never get results. You may simply need to move to a different property. 

Good luck. 

I have an accounting and bookkeeping background and don’t think you need anything but Excel for just a handful of properties. Go to the IRS website and download a copy of Schedule E for rental property income.  This will give you expense categories and make it easier for you. Good luck!

I’ve never seen a check list from an exterminator being this extreme. Personally, I wouldn’t want to be told to remove clothing from drawers and cover dishes for him to spray.  This environment sounds toxic for a baby!

As for the tenant being dramatic and not picking up, I’d like to point out that pregnancy is exhausting and pregnancy with complications is overwhelming beyond belief. Not only is there physical wear and tear on the body, there is a lot of emotional stress also. Please be gentle when speaking to or about women with complicated pregnancies. 

The fact that you had it professionally sprayed before the tenants moved in makes me question whether there was an issue before you leased the property. Roaches are notoriously difficult to control, and while this one sounds very thorough, I don’t know that I would use them when I had tenants in place. I would absolutely make scheduled pest control mandatory. I have a company visit every quarter, but I pay for it so that I can choose the company and receive reports about any issues.