All Forum Posts by: Tim C.

Thanks @Dan C.  @Marcia Maynard 

I did just that and found some good 'rules' for multifamily. Thanks for providing some insight.

@Brent Ludwig  As much as I hate to say it as a detail oriented beginning investor banning candles could be interpreted by some to be fair housing discrimination. Certainly there are certain religions that use candles depending on the time of year (holidays included). This might be just one of those security deposit deductions at the end of the lease you have to deal with. I'll be interested to see what the more experienced folks have to say.

How does the community handle applying 'rules' for multifamily investing? To clarify, there are several things that a landlord (me) would put in the lease regarding when to pay rent, pet policy, military clauses, etc.

However, I have a duplex that will soon be rented by two tenants and I want to make sure I have a set of rules for each tenant to abide by to 'keep the peace.' 

I was thinking of putting a clause in the lease simply stating that the 'tenant agrees to abide by the rules set forth by the property manager' or something to that effect (obviously have an attorney review).

The rules would be guidelines similar to an HOA set of rules like "no loud music or excessively noisy pets, clean up pet waste, no parking on grass, no broken vehicles, etc"

How do multifamily property managers handle these?

Thanks for the help!

Thanks for all of the feedback. This is definitely one of those situations I expected to learn from. On one hand the place is kept pretty clean and (if they did pay for the upgrades) generally they would have more vested interest in staying. 

On the other hand, a history of what I would call the three bad signs (bad credit, criminal history, broken leases) has me leaning toward moving on

@Jason Shamis  Thanks for the tip. This was my first attempt at self managing. I'm having marginal second thoughts thought. Looking for a new client?

Thanks again!

Yes I will be raising to market rent and requiring Gross Income >= 3xMonthly Rent.

Quick case study I was hoping to get a couple of updated opinions on.

I inherited tenants in a duplex I just purchased. Long story short, I honored the existing lease which had a low security deposit (<50% of rent), and low rent (75% of market rent). They only had two months left on the lease. First month, late. Then said they would pay on the 12th. Missed it. I filed eviction. Finally paid on 16th with all late fees. Tenant claims husband lost job and finally has another one.  Month #2 (this month), 11 days late. Payment received with late fees.

Now I have asked them to fill out an application for the property to qualify for my lease. I suggested that if they were denied I would give them one month at a rate $100 higher than current rent payment before they have to leave. Sure, perhaps I'm a big naive but I honestly want to keep a good relationship since their security deposit is so low I don't want them to destroy the place.

That being said, the tenant was surprised that I could and would actually deny them. She states they are good tenants and have paid for many of the upgrades in the place. She also warned me that they don't have great credit, the husband has had some past misdemeanors and they walked out on their last landlord to move into this place.

I'm thinking I have two options 1) deny the application and get rid of them. Lick my wounds if they do damage to the place. 2) accept the application but on a month to month basis. This gives me flexibility to kick them out (South Carolina eviction laws aren't bad).

Thoughts?

P.S. this is a quick attempt at getting more keyword hits for better advice ----> Buy and hold. Tenant. Landlord. Cash Flow. Charleston. Carolina. Rental. Property Manager. Hope it works.

Good question @David Cohen I agree with @Ben Leybovich 

While still a beginner with two properties I plan on being a true buy and hold investor for the 'long term.' I'm roughly at 1.6% rule on a recent duplex I bought. Cashflowing about $800 over PITI and expenses. I estimate a roof replacement, A/C replacement in both units, possible hot water heater replacements and minor repairs to occur over the next 10 years. Let's say its 12K in CAPEX (easy numbers). Even if I don't actually have to pay these expenses, chance are when I try to sell the buyer could make me reduce my price by the amount of the required CAPEX. Not only that but don't forget about the taxes you have to pay for depreciating the property. That will have to come from somewhere. Holding costs in between vacancies. All of those factor in. I couldn't imagine doing that with a property below the 1% rule.

Just my two cents but when you factor all of those back in, it's merely having reserves to account for unexpected (or anticipated) expenses as a true buy and hold investor.

Grant it, if you buy a 'rent ready house' and sell after 2-3 year before any failures take hold those rules may not apply so a lot of it depends on your exit strategy.

Cheers @Kevin D. 

Good Luck!

Hi @Laura Cox 

Welcome to the site and the area. I am also from Buffalo living in Charleston. Nice to see another come through!

@Monica Zakaria

My suggestion. See if you can find an affordable apartment in the college town. Often these are for sale preferably 3-4 rooms. Rent the other three rooms out. This will give you a taste of property management and real estate ownership. If you cant afford the downpayment find an investor and give them a return on their investment (part of your cash flow).

Good luck!