All Forum Posts by: Debra A.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Woodacre.

Purchase price: $850,000
Cash invested: $300,000

Private purchase of a 1bd 1 bath main house-remodeling into 2/2 in progress
Lower lever-1 bedroom apt-remodeled kitchen and bath basically upgraded everything
2000 sq ft barn- will become 2bd. 2 bath
1800 sq ft garage-cleaned, lit, restored garage opener and 2 car parking--future potential for an upper unit
35 dump runs since June 1 and counting. Former owners junk 1st 20 dump runs-and construction
New septic to be installed in spring
New utility pole to be installed by utility company.

What made you interested in investing in this type of deal?

We have been searching for the right multi-unit property for quite awhile but had not found a good fit.

How did you find this deal and how did you negotiate it?

A friend called and said that she has a friend ready to downsize and sell. We did a private sale and shared the same agent. Not an easy sale process as it turned out. We offered to purchase as is-no more upgrades. The seller took as is as we had to move buy her junk in order to buy the property. The first 20 dump runs were all about clearing the property!
She rented for 4 months which turned out to be good cash flow.

How did you finance this deal?

Savings and we sold stock

How did you add value to the deal?

As a visual artist & designer, my expertise is envisioning potential in properties and using my business background to analyze the upgrade costs with the areas income potential-then, my team and I work our magic.

What was the outcome?

We are 7 months into the multi remodels. The friend who referred us to buy the property came by this week and was astounded in the transformation thus far.

Lessons learned? Challenges?

Trashy properties are like hidden gems awaiting to be uncovered. Take risks on these value properties and reap the future rewards. We are in the $$$$ pit time of the upper level home remodel where $$ just flows out in order to fix old problems but the upside is now beginning to show and we'll soon begin the final building and septic prior to renting the 3 units.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

BG Bates in west Marin County is with Sotheby's Real Estate

Today we should be elated. We managed to buy a house in northern California for nearly 1 mill and it needs a ton of work. The seller is a friend of a friend and we did a private sale and shared the real estate agent.  From the start there were signs of control issues, when she refused to pay the sellers realtor fees.  To get the the house we split the fees.  We made other concessions that will wind up costing us $$.  She will rent through September and has been informed of a impending remodel.  We've had numerous inspections and site visits with contractors and she is quite aware that when we take possession, that the remodeling will begin in the in law and a large out building but not in the unit she's in until she moves.  This arrangement is another concession. She got everything she wanted and we complied to get the house. 

Our agent notified her that we'd like to come by to get keys and change her locks to ours on the out buildings--after all, the house is ours as of today.  She unloaded on the agent saying we had to give her 24 hours notice to come on the property.  This is true about entering her space but we now own the house and property.  This house has been her home for 30 years and it represents many not so happy memories for her and I'm thinking that the sale brought up a lot of emotional stuff for her.  Please offer your wisdom and ideas on successfully managing a landlord/tenant relationship with this person for the next 4 months.  We should feel proud, optimistic and not locked out!

Thanks Bigger Pockets!

Way to go! 

Hi all,

I'm based in western Marin County in northern California. I'm a green interior designer / visual artist / landscape contractor. 25+ years people & project management expertise in the commercial and residential new construction, additions and remodels. My certified green business is called Deeper Green. 

My partner and I have a rental unit and we hope to build our portfolio in the years to come.

Hi Marcia,

Wow, thanks!  So far we've done everything you suggested above to a tee!  The problem is we are working at a distance from California. 

I just spoke to a realtor pal who gave me some good council as well.  I'm leaning towards a two option approach. Option #1 offer my tenants a one time loss of use rent credit for the actual time the tenant could not use the home + a little extra for their inconvenience during the other 13 repair appointments.  Or, option #2.  Terminate the lease without penalty and they move in 30 days. 

Debra Amerson, 

I just joined this forum because I'm in need of a "tribe" who  has wisdom and experience to offer. This is mine and my partners second investment rental property. We sold a condo and bought a brand new townhouse in December 2014  in Bend Oregon.  Our real estate agent did the walk-through for us while we were out of the country on business and we were told that everything looked good. 

Long story short, I hired a property management company to find tenants and after they moved in February 13, 2015-- I took over.  That's when the warranty repair nightmares began... The builder then requested direct communications with our tenant to make scheduling easy. All 3 parties agreed.  To date there have been 14 warranty appointments with 1 more in the pipeline!!!!  

As the number of poor workmanship repairs mounted and our tenant grew frustrated, she blasted the builder's workmanship in person and by email and we almost got our warranty dropped.    I empathize with my tenants however, t twice because of their communications, I've come close to my warranty being dumped by the builder who's problem stems from the inability to hire talented, qualified contractors due to a building boom in the area.

The builder wrote an email requesting that they only deal with me and my partner. We all agreed and asked our tenant not to discuss any repairs, or the quality of work with the builders.   Last week after the tenant complained to us of being unable to use the house for 1/2 day due to toxic paint fumes and asthma she asked us for compensation for all the inconveniences.

After letting the builder know about her health situation caused by their toxic paint that apparently takes 30-45 days to cure, my partner and I requested a non paint fix.  Get a granite guy in and install a nice mantle.  Instead,  the builder's warranty rep showed up and for another repair (a bedroom door that would not shut... t goes on and on...) and once again he talked directly to my tenant about doing painting repairs-- it's like the tenant forgot her dramatic health issue from last week and now it seems that both parties are working against my request to the builder for a non paint solution--granite.  

Today,  the tenant has flip flopped and wants it painted and admitted that the builders rep mentioned granite and how complicated it is to install.  That news by the builder was designed to piss off the tenant so they won't have to pay for an upgrade.  Now, my tenant is threatening an early exit from the lease  if we want granite--which is intended as a precaution for her health.  I know our tenants very inconvenienced -- we have too and I have no idea of whats fair in this situation. I'm thinking of a one time one week rental reduction for the inconveniences.  Now that the fixes are complete it should be the hassle free new house we bought.

Please help!  What sort of fair compensation should we offer our tenants?  We'd like to make them happy but we cannot afford to lose money.  Do we offer compensation to stay or easy exit from the lease?

Thank you, your help is greatly appreciated.