All Forum Posts by: David Mathews

Hello BP world. I am writing from storm stricken Lake Charles, LA.  Within a short period of time our city endured two back to back hurricanes, a freakish flood, and an unprecedented freeze that has unfortunately left devastation but there is opportunity as so many owners are selling.

I have a pretty good deal currently in front of me that will be my wife & I's 1st flip. We currently own 11 buy and holds.  My question to the insurance savvy...

Is there any legal avenue in order to make an offer on a damaged single family home that will allow the seller to collect the recoverable depreciation upon completing the work?  I suppose I'm asking if anyone has any creative way to possibly pose a partnership with the seller for a deeply discounted offer, I take care of all of the work needed, she collects recoverable depreciation to make up the deficiet of between my offer amount and the current value of the property as it sits. Then we complete the sale for my offer amount.  Or anything remotely close to that idea. Legally.

Nice! I’m in lake Charles too. My wife and I closed on door #11 last week and it looks like we’ll go under contract tomorrow for two sets of duplexes on LaGrange. Fingers crossed on that.

Hello Cody.  We should talk. I'm not sure what exactly you're looking for but my wife and I are in lake Charles.  I should be finishing up on our 10th door this week. I may ne interested in what you're doing,  may be able to give some input,  or possibly even team up with you if things mesh. Worth a conversation at least. Just let me know.

I'm at an intersection and need advice ASAP! in Lake Charles where Hurricane Laura just totally destroyed. Luckily all of my rentals experienced minimal damage compared to so much destruction I've seen all around them. It is obvious that it'll be weeks before power is restored. All my tenants evacuated and its unsure when they'll return. With that said and the 1st approaching quickly I'm trying to figure out what to do. I'm thinking that I'll send out a message today to everyone stating that we are waving September rent. They are all on a lease. Is that what I should do? Will that cause a problem with insurance possibly not paying for loss of income? Does insurance even pay for loss of rental income? Any advice is much appreciated! Very limited service plus I will be on roofs putting on tarps all day so I may not be able to respond quickly. Thanks in advance!

Hello All. I’m hoping to get a little insight from fellow investors who may have experience with pros and cons or what is involved with handicap accessible rentals. I just bought a rental that will require a complete rehab. The previous owner was in a wheelchair so ALL of the interior door frames have been modified to accommodate 36” doors. There is also a concrete ramp leading up to the front porch.(which I don’t intend on modifying) So what I’m curious about is are there any pros that outweigh the cons on going back with wide interior doors and such? I really don’t like the 36” bedroom/bathroom doors that take up more wall space and swing room. What else would need to be done to call it handicap accessible if I did stay with that size and would it be a more sought after rental?  All doors are totally destroyed with gouges from the previous owner so I’ve already removed them.  The kitchen had lower than standard cabinet countertops to accommodate but are being torn out.(1960’s 70’s)  I know that I’ll be going back with standard cabinets but unsure about framing up for standard 32” interior doors instead of 36”. Any input on your experience with handicap accessibility success stories or failures? TIA

I’ve gravitated to this same model here in Lake Charles, LA. We have had a boom in our area with so many construction workers coming in for industrial expansions. The boom has actually slowed down but I am still having success with my rentals. I rent the entire place. One 2bed 1bath SFR, and 3 of the apartments in a 4plex. (Two 1bed 1baths and one studio) How it started: First when I performed routine inspections or maintenance, I noticed a common theme of temporary furniture in my SFR homes rented to construction workers from out of town. It wasn’t uncommon for them to have blow up mattresses for a bed and tattered goodwill or roadside furniture that they would just abandon when they got laid off from the job. Don’t get me wrong, they took care of the property but they weren’t wasting money on furnishing something temporary. Secondly, at one point I listed a nice two bedroom, 1 bath home that came vacant. It had been renting for $1,100/month. There was A LOT of interest in it from out-of-towners and they all seemed to say and ask the same thing. “I am staying in a motel for $400/week and using my per diem to pay it. Is your rental furnished?(I advertised using pictures I took with previous tenant’s furniture still in the home” A all bills paid because it is difficult to get a day off work to take care of all the deposits and such? After 9 different calls similar to this I figured I must be on to something. I pulled the property off the market for 2 weeks. My 14 year old daughter (who loves decorating and staging) and I hit every garage sale, flea market, and facebook marketplace we could to find nice but affordable furniture and housewares to make this place a home. For about $600 we completed the task down to the silverware in the drawer. Bedding, towels, pots, pans, dishes, etc… I relisted for furnished, fully stocked home with all bills paid for a 6 month lease at $1600/mon and haven’t looked back. I was originally getting $1100 for the place and after the change up I’ve calculated it is bringing in around $1350/month after utilities and lawn service. So far so good. My daughter enjoyed the process and it has been successful to the point that I decided to replicate the model for a 4plex I own about a mile or so down the road. A lot of the construction projects have slowed plus the covid thing isn’t helping so I did decide to drop the 6month lease and do month-to-month to be more attractive to traveling workers but our lease does still contain the language that we must receive a 30 day notice that they are leaving or the deposit is forfeited. I pause to talk about that at lease signing with all of my tenants because I don’t want to be shady and I want them to fully understand there aren’t exceptions. They usually make a comment stating there’s a good chance they will be forfeiting that deposit if they get laid off without notice but they are fine with it. More so than not that seems to be what happens. I advertise on Zillow, craigslist, turbotenant, Facebook Marketplace, Realtor.com through Cozy.Co, and I place “For Rent Fully Furnished” signs near their park and ride lots. Zillow seems to be the most effective for this type of tenant with Facebook coming in with a tie or close second. Facebook definitely does bring out the desperate for this type of rental though. I realize that sounds ugly but I notice that I get A LOT of just out of relationship kind inquiring about the rental. I mean just out as in moving out that day. I may or may not be guilty of “facebook stalking” all who inquire in order to get a glimpse into what type of tenant I may be taking on. If I could give them any word of advice it would be if every post you put out there is negativity and trashy and zero personal responsibility for what’s going on in your life, chances are you’re not going to be a good fit in my rental surrounded by professionals who work hard every day. Oh and by all means, don’t be smoking weed in your profile picture taking about “Eff the world!”

By now it is likely most of us have been affected financially by the whole Covid-19 pandemic. I currently have a teacher in one unit, retirees in 2 units, and construction workers in a few units. So far so good. No missed rent payments through all of this but it got me to thinking. What if my tenant base was all in the service industry? Or all in some type of profession that is deemed "nonessential"? I am curious your thoughts on selecting future tenants based upon their occupation? Diversifying if you will... Is that possibly something to strive for in the future? Would it be discrimination to do so?

@Jason Martin

No sir. There is no upside to it. Do you plan to be a successful investor? I'm sure the answer is yes. A good investor will offer their property at fair market value. So what would Bro be getting from you that he couldn't get from any other landlord? Nothing. He can get a unit at fair market value anywhere in town. No upside. But LOTS of ways this could spiral downward and strain relationships that matter. I've had friends and family ask me. My response: "No offense to you but from day one I've adopted a 'No friends or family' policy because there's too much that can go wrong and I value my relationship with you."

@Jonathan S.

I am currently doing this same thing. Previous owners stayed as tenants. And for the same reasons. Older couple. The husband is in poor health and they don't want to make a move due to the stress of it all. The only difference is the fact they didn't ask for a lengthy lease. I was skeptical at 1st but my experience has been positive so far. Would I do it again? Yes. Would I sign a 3 year lease with them? Yes. I've read the responses to your forum so far and there is a lot of good advice here. 1st figure up how much you'd be loosing with below market rent figuring in the inability to raise each year and negotiate the asking price down to that. Figuring in if you did have a vacancy for a few months over a 3 year period will allow you to actually not have to negotiate the full amount. Example while negotiating, "I figured allowing you to stay for the next 3 years $100 under market and not being able to raise the rent $20 each year will cost me $4320 over the next 3 years so if we do sign this 3year lease then the sell price will have to be reduced for me to justify this as an investment." Then see where that goes. $4320 off would be great but if you only get $3600 off and you were already ok with the previous sell price then you're in that much more better position. 2nd if the basement issue is really an issue for you then make that part of the negotiations. Ask for more rent per month, state that it must be cleared out or just use it for a negotiation recession tactic. Maybe build it up to make it seem like a really big deal like you need it for storage for your business or something. Offer for him to continue to use it if he gives up xyz. 3rd have an ironclad lease. That is the key to this whole deal. It doesn't matter if he plans to do anything to get over on you or do something shady once he becomes your 3 year tenant. If you have a good lease it'll cover most of the contingencies. He may have a 3 year lease but if he's breaking the rules then there's grounds for eviction no matter the length. So all in all if a good lease is in place stating landlord and tenants roles then a 3 year "for sure" tenant is a blessing! Lastly if this is a BRRR purchase then it may be a bad idea if you have to wait 3 or 4 years to pull your equity out.

Don't commit a crime to look up your tenant's stimulus status!

https://youtu.be/4dkX0cFsn-s