All Forum Posts by: Elisha Cram

@Jim K.

Ha, Jim! Nothing better than a good tile guy. That’s good stuff right there. Believe it or not, most of the people I know in real life who invest in real estate are also women, and their husbands mostly just want to be left out of it (though they do appreciate the additional income). We talk shop together and don’t mind if the guys don’t want in. Kind of like knit night....which we also do.

I really wish I had figured out earlier in life how much I love doing this. I could have been retired by now!

@D'Andre Byers

The first house I purchased as a single 23-year-old (I am now 42) was a duplex, and every house I’ve lived in (and owned) since then has had some sort of rental income. Our current home has an apartment over the garage.

Obviously, my husband knew this was a package deal, and it was always my thing, so he didn’t have an issue with the one I already owned.

Then I wanted to buy more places, and he didn’t think we could afford it. He doesn’t get involved really at all in the finances, so I am not sure he felt strongly about this, and I suspect it was more of a vague “you don’t let me spend all the money I want, so we can’t afford extra stuff” kind of mindset.

BUT THEN his Gram went into assisted living, and his uncle needed to sell the house to pay her bills. My husband practically grew up at his Gram’s, and he REALLY wanted that house to stay in the family. He never mentioned this to me, because he didn’t think we could afford it. One day I brought up again that we should buy a camp, use it a few weeks in the summer and rent it the rest of the time to make it pay for itself. He replied that if he did something like that, he’d want his Gram’s house and then told me it was about to be sold outside the family.

I suggested we buy it, renovate it and list it as a short-term rental. We went over the numbers and knew if it didn’t get many guests, we could still pay the bills but would need to adjust our lifestyle. With a 25% occupancy rate, the property would break even with no impact on our personal finances. He agreed, and we did just that. We now, 2 years later, enjoy a greater than 50% occupancy rate over the course of a year.

By the way, he is now on board with expanding our investing, provided that he doesn’t have to do renovations himself. I enjoy this type of work, and I can hire out jobs I don’t want to do or that exceed my skill set, so this is a plan that works for us.

He definitely was not wanting to invest in anything additional 3 years ago. Now he sees it as a path to a more comfortable retirement and possibly even early retirement. Obviously, our situation is unique and may not be applicable to you. You are very smart to want to invest in RE, and starting at a young age will serve you well, IMO.

I would make her aware of a few things.

-She can be as involved or uninvolved as she cares to be personally.

-This has the potential to make your life much more comfortable in the long run.

-There is a lot of satisfaction to be gained through “making things better.”

-The “sacrifice” of a house hack or duplex living for a few years has the potential to result in MUCH more appealing options down the road.

As a side note, I strongly recommend rehabbing a house together before you get married, if you can talk her into it. If you can make it through that, you can make it through anything. My husband and I renovated that house, and it was super stressful, but I don’t think we fought once (about the house anyway). We approached problems as a team and actually enjoyed doing it together. Other people, I can tell you, we’d have been at each other’s throats if I had to do that project with previous partners. It is a good test of how you approach problems and work together (or not) and you’ll learn a lot about your relationship.

Good luck!

@Daniella Sanchez, we did not try to manage it with DIY. I immediately brought in professionals, and we did 6 months of treatments, some of that with tenants in place and some after they left. Maine law requires that professionals be used to treat for bed bugs in rentals and that the landlord pay for it. The only exception is that if the tenants don’t cooperate with pest management, they then become responsible for the cost. That being said, good luck ever recovering that money from them. Any thoughts from your dad about how to verify the issue is resolved? 

@Rob Milliken I think the first step in that would be the cleanliness inspections. I did set those up; however, they decided not to stay with the rent increase. Part of the treatment from the pest management service was that they vacuum daily and immediately remove the vacuum bags to the trash bins outside. I saw no evidence of this happening, either with daily additions of anything to the trash storage outdoors, and also upon their vacating, I could tell that they likely hadn’t vacuumed since the girlfriend had moved out. There was straight up gravel on that carpet. In fact, some weeks I didn’t see that they brought any trash out at all. They also were meant to dry their clothes on hot in the dryer, and I didn’t see any laundry being carted to the laundromat, either.

They were headed down the eviction road, I believe, but their decision not to stay due to rent increase probably made it much easier on me in the long run.

I am interested if anyone has advice to offer about making 100% certain the pests have been completely eradicated. I have monitoring traps up there, but I am not sure how effective they are if there aren’t many bugs. I have not seen any, but I’m not sure I normally would during daytime hours. The unit has been unoccupied since early February. I tore out the carpet, and we are removing the plaster (not for bugs, just planned upgrade, and also will be putting down new flooring). We also did some stronger treatments with pest management now that it is empty than we can do with it occupied. I want to be completely sure that the issue is resolved before placing a new tenant. Please feel free to private message me for anyone who doesn’t wish to speak publicly. I would like to know for those who have had this problem how long you treated it, how long it took to resolve and if the problem recurred. Also, would be interested to hear how you felt reasonably assured that the issue was resolved. This has been my first go around with any kind of pests (been renting 1-3 units for 19 years now, so maybe I’ve just been lucky so far).

@Carl Hebert definitely yes! I normally screen very stringently. The original tenants in this case were a couple. They lived together for about 2 years, and when they broke up, the guy wanted to stay and bring in a roommate. The apartment really isn’t big enough for two people who aren’t sharing a bed. Also, the new guy didn’t fill out his application completely. Normally, those go straight in the trash with no further consideration. I let him know it did need to be filled out if he wanted to live there, which I normally would not have done.

Now, these tenants were not bad people. The 2nd guy was actually a very dedicated worker. I once saw him leaving work (Target) at 10 pm in Maine in the winter, and he was walking home (rather than calling out) because he couldn’t afford an Uber. Of course I gave him a ride. It makes me respect his dedication for sure, but it was also a flag that he may have overestimated the hours he was getting on his application if he couldn’t afford the ride.

Also, in hindsight, at the first sign of pests, I should have instituted cleanliness inspections. Up until the bedbugs, there was not any meaningful improvement despite counseling.

Norman, was this the one in North Sullivan with the yellow siding? I grew up in that house, and you did such an amazing job with it - it is absolutely breathtaking! I am curious how you made out. I know my FIL in the past has offered people around $200 to sign off on a deed. I don’t think that anyone has ever turned down his offer. 

We bought a house for $20,000 and out about $10K into it for upgrades. We use it as a short-term rental. It was/is a family property, so we have no desire to sell it ever or to rent it as a long-term rental. We want to use it when we please, so STR is the perfect fit for us.

We did buy it initially with a personal loan from our credit union for $25K. We estimated $3000-$5000 for repairs and upgrades. Of course we were on the low end, and it took longer than expected. Once we owned the property, we went to a different bank who had no problem doing a mortgage on a lower valued property, and we took out some extra to cover the final renovations. 

It really depends on the lender, so I’d suggest calling around. Also, I highly recommend working some capital reserve into your plan. Hopefully you won’t need it, but if you find some surprises like we did, it may make the difference between a successful project or a disaster. I’ve seen lots of properties listed that were mid renovation, with all the materials to finish included in the sale...suggesting  that the seller ran out of time or money and was forced to liquidate.

Best of luck to you. Be sure to come back and let us know how you make out. 

I wanted to offer a follow up on how this turned out. Maine law requires landlords always to pay for treatment of bed bugs. The only exception is if the tenant does not cooperate with the treatment process, they then become liable for all costs. 

These tenants had been in place for 3 years without a rent increase, and the unit was well under market. I notified them of a rent increase and gave them about 4 months of notice so they could plan ahead. They decided to move out. It seems they had some changes to their income in a downward direction of which I hadn’t been aware, and they decided they could not afford to stay. 

The bug treatment was very expensive, and we struggled to get it under control right until the tenants left, then it became rather easy. Luckily, I set aside a portion of the monthly rent for unexpected repairs/issues. This did drain that fund, but it also kept the impact to our personal finances very minimal. 

The unit has been vacant since early February. We are currently renovating, as these guys were a bit hard on the unit, but to be honest, I wanted to make changes in the bathroom anyway. We are removing a tub (with no shower) and putting in a shower (with no tub). We are also removing plaster and updating with drywall, and are adding new flooring in the bathroom and downstairs, and of course, fresh paint throughout. Bonus with the walls being down to the studs with the plaster removal is that we can add in extra power outlets and in more convenient locations.

The delay is mostly my fault... I finished up my MBA this spring and didn’t give the unit the attention I should have while I focused on my school work. However, it was always a cute unit, and it should be very marketable with the new updates and especially replacing the tub only with a shower. I expect to be able to get an additional $200/month more for rent when it is listed, although we are considering using it as an AirBNB instead, as we have had a wonderful experience with our other short-term rental. 

Big thanks to everyone who offered thoughts and advice. This project has taken much longer than anticipated, but I think we will reach a positive outcome very soon, and I’m very much looking forward to getting this cash flow back. 

~Elisha

My tenant just informed me he found a bed bug and asked permission to use a fogger. It is the only apartment in an owner-occupied building. Any advice for dealing with bed bugs? I am getting exasperated with these tenants. They are genuinely nice guys, but they are slobs. They had a rat about 6 months ago, which we got rid of, and I counseled them at that time about not leaving food out and about keeping their apartment tidier. I have lived in this house since 2002 and had multiple tenants, and no issues with vermin of any kind prior to these tenants. I try not to be too uptight, as I am by no means a perfect housekeeper myself, but I am considering cleanliness inspections for these two. A quick Google search about bed bugs has me terrified. I am concerned they will continue to keep a cluttered and nasty apartment and then I will soon have bed bugs also. I admit to being ignorant on the topic. I simply have no experience here. Has anyone had a similar experience who can advise on how you handled it? Can anyone talk me down from the ledge, or should I be more terrified than I already am...?

I have had a request on HomeAway to rent from Jan 1 to Apr 1 of 2019. March tends to be dead in this area, though we do get snowmobilers in January and February.

Are there any owners out there from Maine who have done some of these 1+ month rentals? Obviously, I have read the pinned post, so that is a concern for me. I have been trying to find out what, if any, length of stay would create a resident situation as that case in California, but I haven't been able to find the info I am seeking. 

Has anyone done this who can share their experience? Could anyone point me toward resources to learn more about the implications of this type of rental term? Can anyone recommend a good real estate attorney in the Bangor area?

I would be thrilled to have my place rented up the first 90 days of the year, but I also want to make sure I do my due diligence and understand what I am committing to. Thanks for any help. 

~Elisha