All Forum Posts by: Charles McCabe

@David Krulac Good to hear from you again.  Thank you for the detailed response.

I just hung up with PECO.  Units 1 and 2 have electric and gas turned on.  Unit 3 has neither.  That's what I expected.  Near as I can tell the property is in good condition and I don't expect to find squatters (I do expect to find some folks who have gotten away without paying rent for a while because of the property situation).

It's interesting that the "gift" part raises objections.  I'm not arguing, just curious . . . do you see a specific downside to it?

@Steve Babiak I somehow knew you'd be the first to respond ; >  Thank you!  Great suggestions.

Regarding the gift, I'm only talking about $10 Wawa gift cards.  I think $30 worth of honey is reasonable with so much potential vinegar in the equation.  just a little reciprocation psychology.  I don't think they're squatters, but even if they are, I just bought a squatter a few cups of coffee.  I can live with that.

Try @Ray Peslar.  I expect him to treat your investment like it was his own.

Did you just buy a property in Darby?  I just closed on a duplex in Darby last month.

Tomorrow I'll close on an REO triplex in PA in which I believe at least one of the units is occupied. The former owner is not one of the occupants. How do you recommend I make my first contact and work with them?

My plan so far is as follows:

Stop by and knock on doors in the early evening with a gift (like a gift card to a local chain of convenience stores) and a letter of introduction loaded with a couple of business cards.

If I get to talk to the occupant:

1. Ask their plans...do they want to stay or do they want to leave?  If they want to leave, send them notice of termination of the lease, so eviction proceedings can begin, if necessary.

2. Ask for a copy of their current lease.

3. If they can't produce the lease, ask them how much their rent was.  If it's within 10% of market, offer to sign a new 6-month lease at that rate with a provision that it will increase to market after that. If it's not within 10% of my expected rent, offer to sign a new lease at a 10% discount, like above.

4. If they can produce the lease, take it from there.  Given the length of the foreclosure process, I don't expect to find anything but month-to-month in place.

5. Either way, let them know that I expect to receive their rent on 01Feb.

6. If they want to stay and we come to terms, ask them about any repairs they feel are necessary.

If I don't get to talk to the occupant, leave the gift and letter, which makes a couple of important points:

1. That they need to contact me immediately because the previous owner (the bank, actually) filed for ejectment and we might need to stop that.

2. That if I don't hear from them within 7 days, I will presume the unit is unoccupied and enter "with a locksmith".

I've reviewed these posts, BTW:

https://www.biggerpockets.com/forums/311/topics/19...

https://www.biggerpockets.com/forums/41/topics/185...

On the subject of entering, can anyone point me to the law governing that situation...specifically when it's not known whether the property is occupied or not?

Thanks,

Chaz

@John Knisely Keep it coming.  It's so easy to get tunnel vision based on your own limited experience.

@Marquest Page Great read.  Thank you.

@John Knisely  Thank you!  Gotta love data.

@TJ Reiley If it helps at all, the closing cost SWAG that I use in my property screening calculations is 5% of the purchase price.  The property I'm closing on tomorrow had a purchase price of $41.5K (so my SWAG is $2075) and by closing (including the earnest money), I'll fork over $1930 above the purchase price, so it's a decent guess at least some of the time, but there are *many* factors at play, including the amount of taxes and when you're buying (which will determine the amount you have to credit the seller).

@Melissa M., Not my area of expertise, for sure, but I just met with someone from 1st Colonial Bank on Friday and it sounded like they fund the kind of deals you're talking about with reasonable terms.

@Ron Flatt, and another thing about market dependence is that expenses can vary *a lot*. For instance in Delaware County PA, the property taxes are really high (I'm paying ~$2500 for 3/1 rows and twins). And insurance can be crazy different. For instance, I'm paying ~1000/year for a 3/1 SFR in one location, but ~$3800/year for a 2/1, 2/1 duplex in the same county because it's in a flood plain. So your 1% properties may net more than my 2.5% properties.