All Forum Posts by: Eric Lahoda

After paying the city for a rental license and CO inspection and now a lead inspection, I’m wondering if I should pass these costs onto my tenants or is this just consider these cost that I pay for my business.

I interested in hearing what others are doing if anything to recover these costs. Thanks.

Quote from @Mike Dymski:

I would sell a property if there were no better choices than a resident with concerns.

Sell? Sarcasm right? That’s funny. Anyway I was looking to see if others have experimented with just M2’s leases. I don’t see a good reason to automatically offer an annual term lease. Any tenant can walk from an annual lease if they want and you won’t be made whole. I think a better approach is to provide a great rental at a good value so people pay and stay. And maybe a better alternative to eviction is just ending the lease in 30 or 60 days.

Quote from @Kevin Sobilo:

Quote from @Eric Lahoda:

Quote from @Alecia Loveless:

@Eric Lahoda My general philosophy is that if a tenant really wants to move regardless of a lease then I’m going to let them. I’d rather not encounter a toxic tenant who may destroy my property and spew verbal sewage to my other tenants. Assuming it’s a multi family as far as other tenants.

I’d prefer to let ALL my leases expire after one year to M2M leases and usually do just that unless a GREAT tenant specifically asks for another year lease.

In your situation I’d at a minimum recommend a 6 month lease if you have reservations about the tenant. I might do a 3 month. I’m not sure my tenants would agree to move in on a month to month with no lease guarantee.

I’ve heard a lot of landlords in my area have gone solely to M2M. I’m just not there yet.

In my area, courts will not allow you to collect the lease balance if the tenant breaks the lease. (even though the lease says so). So in practice, an annual lease term seems one-sided for the tenant's benefit. And I would not try to obligate someone to stay by contract. I'd rather they stay because my housing is exceptional. I would offer an annual lease if a tenant prospect has an outstanding application. Not all tenant prospects are "perfect" and I can't always wait for perfect. So why obligate yourself to a long-term relationship with someone with less than a perfect application? It makes more sense that we both prove ourselves. Isn't that more like real life? An M2M lease still provides both parties an agreement and protection. And if we are both good to each other, then we live happily ever after, lol.

When you say the court will not allow you to collect the balance of the lease if the tenant breaks the lease early, what WILL they allow?

In my state, the LANDLORD is obligated to make a good faith effort to find a replacement tenant and once that tenant is in place that old tenant no longer owes past that point. So, if it takes 1.5 months for a new tenant to be in place, that old tenant owes 1.5 months rent (Yes, the partial month is prorated).

In addition, I can charge an early termination fee in my lease to cover my work to re-rent the unit.

So, even though I cannot charge the old tenant for the entire remainder of the lease I essentially have ZERO vacancy because I am owed rent for EVERY single day! In addition, my work to find that new tenant is paid for.

I suspect that many places have similar laws to this. 

 I'm not an attorney, so I defer any legal specifics to an attorney. I have seen that law and practical implementation are sometimes different. If a tenant does not want to pay, a court can agree with the landlord but the court does not guarantee the landlord financial results, regardless of the lease. I do want a tenant to stay as long as possible but I don't see the value for the landlord to obligate a tenant by using an annual lease vs a m2m. Aside from offering this as a benefit to outstanding tenant prospects.

How do you find and compensate a good designer for overall material choices and color selections? I think I'm pretty good with most aspects of rehabbing. But I am very slow at designing choices. I know what I do or don't like when I see it.  But designing feels like it requires a different part of the brain. I hate cookie-cutter designing and copying everyone else's designs. I see so many rehabs that look like last year's styles copied and copied and copied. (gray, gray, gray, etc) or other old trends. Many rehabs look like the other guys "contractor specials" - no heart, no joy.

So how do you find a designer who will commit to creating and selecting a scheme for an overall project? What or how would you compensate that person? I don't want to design, I want to say, "Yeah, I like that"

Quote from @Alecia Loveless:

@Eric Lahoda My general philosophy is that if a tenant really wants to move regardless of a lease then I’m going to let them. I’d rather not encounter a toxic tenant who may destroy my property and spew verbal sewage to my other tenants. Assuming it’s a multi family as far as other tenants.

I’d prefer to let ALL my leases expire after one year to M2M leases and usually do just that unless a GREAT tenant specifically asks for another year lease.

In your situation I’d at a minimum recommend a 6 month lease if you have reservations about the tenant. I might do a 3 month. I’m not sure my tenants would agree to move in on a month to month with no lease guarantee.

I’ve heard a lot of landlords in my area have gone solely to M2M. I’m just not there yet.

In my area, courts will not allow you to collect the lease balance if the tenant breaks the lease. (even though the lease says so). So in practice, an annual lease term seems one-sided for the tenant's benefit. And I would not try to obligate someone to stay by contract. I'd rather they stay because my housing is exceptional. I would offer an annual lease if a tenant prospect has an outstanding application. Not all tenant prospects are "perfect" and I can't always wait for perfect. So why obligate yourself to a long-term relationship with someone with less than a perfect application? It makes more sense that we both prove ourselves. Isn't that more like real life? An M2M lease still provides both parties an agreement and protection. And if we are both good to each other, then we live happily ever after, lol.

What is your opinion or experience by starting a tenant with a month-to-month lease instead of a full year term?

I have concerns over a tenant prospect and I consider ending a lease and easier option than evicting. Let’s assume there are no better choices of prospects.

Hi, I'm an experienced RE investor. I am a cash investor now, 2024, actively seeking value-added, class C to B, SRF single-family homes for long-term, BRRRR and also seeking small multifamily anywhere in the USA. I am a licensed PA and NJ RE agent based in the Philadelphia area but I am seeking outside the Philadelphia region. Please contact me directly.

Investment Info:

Single-family residence buy & hold investment in Hopewell.

Mid full rehab. Expecting to ad several hundred thousand in value above rehab costs

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

Creative finance deal, no money down, and full rehab

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

Networking

What was the outcome?

Owner finance and private money

Lessons learned? Challenges?

Spend more energy on finding good contractors and start using less of my own labor.

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

Me. I'm a licensed Realtor in both New Jersey and Pennsylvania

Investment Info:

Single-family residence fix & flip investment in Willingboro.

Purchase price: $100,000
Cash invested: $100,000

Single family bought at the right time.

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

A prior client asked me to buy. I am familiar with the area and have bought and sold here many times.

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

No cash down, lease purchase option. Executed option to buy

How did you finance this deal?

Private money

How did you add value to the deal?

Full Rehab and repair

What was the outcome?

Listing soon.

Lessons learned? Challenges?

Don't rush to sell in an upward moving market.

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

Me. I'm also a New Jersey and Pennsylvania licensed agent, helping retail clients and buying and selling as an investor.