All Forum Posts by: Chris R.

We're going through the exact same thing...it's enough to drive you batty. We finally ditched the conventional lender for a hard money guy. We're finding there are clear benefits going this route despite the higher interest rate. First, we're locked in with these tenants till summer because of leases and we'd bleed money with the current rents with a conventional note. With the hard money loan, we're paying smaller interest only installments monthly. Second, the hard money guy was much easier to get renovation money from. The conventional guy was a hard no, even getting the deal accepted $30k below the appraisal. This way we can take our time to get the current tenants new homes so we can renovate the units, have cash flow each month, money to renovate and we can most likely pull cash out on the refi.  

We have this same issue right now and we’ve figured out an effective way to get them to clean up after their pets more consistently, at least in the summers. It got pretty bad, even with gentle reminders to pick up, there was little or no response. 

I have a landscaping service cut our grass and the owner and workers complained about the dog waste and charged me a fee for mowing the lawn in that condition. We in turn charged the tenants for reimbursement. They were not happy. I stuck to my guns and told them we’d warned them politely numerous times and now there were consequences because nobody acted. I now give them a heads up a day prior to mowing and it seems to have helped. 

My wife and I bought our second home after having our 2nd daughter in ‘12 and because we were so severely underwater on the mortgage, we became landlords with similar cash flow that you're describing. The ups are that if it cash flows accounting for the HOA, it's amazing because you rarely lift a finger. The management company handles the exterior of the house 100% and you can do annual inspections. On the flip side, you could take the $60k and turn that $300/mo cash flow into significantly more with a 3+ unit building if you ran your numbers correctly. I also own a 3 unit multi for the same cost and it cash flows 4x what my condo does. I maintain the whole building but the profit is much better.

We buy the Schlage electronic code deadbolt/handle combo. Costs about $120 each and it’s free to change the code as many times as you want. Solid as a rock and we’ve never had an issue with them. Buy once, cry once. 

Our leases it state that any pest infestation after a certain amount of time they’ve been there (I don’t have it in front of me but I believe we give them 3-4 weeks), are the responsibility of the tenant. I go around the perimeter of the house with ant control pellets but anything that’s specific to their unit is on them financially. 

Perspective:

Cerveza virus - 83,867 confirmed cases, 2,867 dead

Pneumonia - 450 million affected, 4 million deaths

Go buy stock in 3M ha!

I agree with @Michael Totman on this one...our most recent acquisition is was a three family with severely under market rents and included HHW. Lucky for us, all tenants vacated prior to close and we were able to renovate each and get to market right away. We took the annual oil bill, divided by 12 and just tack it onto the rent ea month. The way I sell it is their heat bill never spikes in the wintertime. They pay heat every month even in the summer and I haven’t heard a complaint yet. 

We are happy to have pets in the apartments as others have in this post because of the extra revenue. Our apartments are a little on the expensive side because they’re renovated to a nicer level which has seemed to attract more responsible pet owners. We upgraded all of our floors to LifeProof plank and that seemed to cut down on damage with dogs. We take a $200 pet deposit and charge $25/mo per pet. I like the idea of upcharging to $50 for dogs over 40 lbs as well as the additional insurance on aggressive breeds. Very good practices to protect yourself. 

I've reglazed two tubs and it's quite a process but comes out nice once you get the hang of it. You need a real respirator with replaceable cartridges (3M has a great one we use) capable of handling organic gasses and have all the windows open. The fumes are severe! If you're interested in the details, hit me up.  

Our first nightmare tenant experience was like what you’re describing. And I totally agree with what @Sean McKenna says above. Very matter of fact, courteous, timely responses that don’t get you caught up in their drama.

I use a free CRM service called HubSpot that works alongside my Outlook mail app to log and time stamp every email I send and receive from tenants. All correspondence lines up directly under their profile so you’re not hunting down multiple emails if you need them for legal purposes.

My business partner and I are both married to mental health counselors who we called on to help with handling our difficult tenants like yours. Yours sound identical to our situation and ours had clear sets of issues that amplify every little thing that seemed wrong with the apartment. Sean’s approach above is exactly how to handle this type of personality disorder which is a very difficult one to deal with. In fact there’s a whole treatment discipline built around this type of person because they’re so challenging. Our wives teach a summer college class on it!

So against that, I’d end this lease ASAP...they don’t get any better!!