All Forum Posts by: Dennis McNeely

The closest I've come to your situation is similar to one in which a tenant wanted to cut the grass, for which he wanted to get a reduction in his rent.

I don't like mixing the two - it can get messy if he stops mowing due to mechanical or health issues, etc. He pays his rent, I pay his mowing bill. End of story.

Interested in hearing how others deal with it.

At a bare minimum, I'd have a T-12 and rent roll for the property, together with your current property analysis, future cash flow projection, and an exit strategy or two. In your analysis, be sure to include those criteria the investor considers most important (cash on cash, cap rate, DSCR, etc).

Also consider what you know about the private lender @Michael Dallas. Are they interested or concerned about neighborhood crime, supporting data for surrounding rental rates that might affect your future cash flow, pictures or video of the property showing the class of the neighborhood and the property itself, ... ?

Regarding your comment that "the court continuously grants more time," I had a similar issue just prior to the Covid lock down. Even though I filed eviction paperwork 45 days before the eviction moratorium, the judge just scheduled repeated hearings - often for no apparent reason.

Frustrated after 12 months, I finally told the judge during a zoom court hearing that I'd done everything required by law and requested by the court, and that I was now asking that the judge evict the tenant. She finally did, and after 13 months, the tenant (and her boyfriend) left in a huff - just after New Years day.

What a struggle! Since that eviction, I've resolved to use that same tactic much earlier in the process. Ask the judge - point blank and on the record during a court hearing - to take action.

... and make sure the work is permitted and inspected.

Just sayin'

This is a sophisticated wild-eyed guess Jeff. 

I assume you don't have a basement under those two bedrooms. Instead, you have a section of the footing for the two bedrooms that isn't deep enough to prevent frost from getting under it. If you don't have a full basement, the bedrooms may have floor joists over a crawl space, and frost in the winter is lifting that section of the foundation - sloping the floor. In the summer everything settles back down.

If my assumption is correct, when the foundation lifts the floor in the winter, it will also raise the exterior wall sitting on it. The wall will raise the ceiling in the winter and crack it at the top of the wall in the bedroom, but you can't see that crack at the high side of the floor because the separation is on the back side of the wall / ceiling joint. Conversely, the tilted ceiling will open a visible crack at the wall / ceiling joint at the far side of the ceiling.

This problem can also exist if you have a brick exterior overhanging the brick ledge of the basement foundation - anything the frost can push up against.

To check, dig holes outside, along the entire suspect section of the foundation - all the way to the bottom of the foundation or to the bottom of the brick ledge. You need to verify that the bottom of the foundation is below the frost line in your area, and that the freezing ground cannot lift any brick or masonry outside the house. If the foundation is the problem, you need to underpin the shallow section of the foundation to prevent any frost from getting under it. The entire shallow section of the foundation has to be underpinned; you cannot let the frost get under it anywhere. Similarly, make sure the ground cannot lift any masonry on the outside of the house.

Hopefully this helps. If not, perhaps someone else has a scathingly brilliant idea :)

I'm interested in hearing others' replies too Marjorie. We're in a similar bind, and are beginning to look for lines of credit from lenders well versed in real estate lending. Let me know of your progress if you would, and we'll both keep an eye out for further responses to this thread.

Knowledge of techniques and terminology is great - but if you don't take action, all is lost.

There are a number of cautions here @Craig S. You may find it useful to seek an unofficial preliminary meeting with the local powers-that-be to get a read on how much resistance there's likely to be with your development, as well as getting an early read on things they'll "suggest" to make necessary approvals more likely. Take a drawing of your proposed site to that meeting, and once you get some feedback, do a quick and dirty pavement take off, as well as take offs for the utilities. Similarly, using unit costs from your engineer, do a SWAG of the costs for clearing, stripping topsoil and balancing the earthwork, etc. Refine this cost estimate as you refine your site plan.

Note that local politics can be a quagmire!

A few of those cautions include the investigation of existing encumbrances on the ground (zoning requirements, existing or proposed easements and assessments, encroachments, etc.), existing site conditions (high ground water, site topography, existing soil types and soil environmental concerns, etc.), the location, depth, and capacity of utilities to service the site - including public utilities (sanitary, storm and water services), franchised utilities (power, gas, cable), capacity of the local streets to accommodate additional traffic from your development...

Be sure to find out if there are any specific local ordinances you need to satisfy (possible tree & wetland surveys, together with any necessary tree & landscape or wetland mitigation plans) and whether there are any concerns from municipal departments (e.g. hydrant locations from the fire department, storm inlet and retention requirements, as well as asphalt / concrete road requirements from the engineer), entrance requirements from the road commission (left turn and passing lanes at the site entrance), etc.

Once you get past all this you can finally prepare a preliminary site plan and enter the political arena to get preliminary site plan approval, and to address any concessions the board and neighbors want from you to overcome their objections to your development.

Then there are a few more hurdles (and more time & carrying costs) to overcome to obtain final site plan approval.

Having finally made it to final site plan approval, there are still the issues you're already familiar with - e.g. which side of bed did the inspector get up on that morning? :)

There's lots of opportunity in the development and construction of a new site - and a thousand places to suffer financial cuts and bruises that can bring you to your knees. I've mentioned a few above, and I'm sure you'll discover others.

Best of luck moving forward!

I'm not knowledgeable about your situation, but I'd ask them if they have other bar/restaurants in the area. If so, what type and amount of coverage do they have carry for them.

Secondly, I'd ask an insurance agent I presently use for advice, given your situation. Pick their brain.

Lastly, I'd make sure their insurance policy names you as an additional insured.

Hopefully someone with actual experience will respond and educate both of us!

Our lease requires the tenant to carry renter's insurance with a minimum of $300,000 liability coverage naming us as additional insureds, as well as covering their personal property. In addition, we ask that their coverage includes payment for alternate lodging in the event of fire, flood, or wind damage causing their unit to be uninhabitable.

On the flip side, we insure ourselves for liability, real and personal property we own at the property, and loss of rental income if the unit becomes uninhabitable.

They insure themselves, we insure ourselves. Done deal.