All Forum Posts by: Garrett O.

So I have a relative that has a 4 unit multifamily apartment complex (Located in a bad area, a lot of graffiti and gang involvement on this street). They have owned it 30+ years. They had the same tenants pretty much for all 30 years (didn't have high rents, because they managed it themselves and they didn't know really what to do).. 

In the past 4 years though we have had 2 tenants move out and buy homes. (during this time the move out we were able to fix up 2 places. We put some LVP flooring, Quartz counter tops, new shower tiles, updating paint job interior) and (put new windows all throughout each unit). 

We just had the 3rd unit of the 4 pre existing tenants move out. Now we are in the process of fixing which this one needed more work than the others we are doing the same though with new shower tile, new LVP, but this one is getting new cabinets with the new quartz countertop. 

So once this is one unit is done in the next few weeks we are able to get 3 of the 4 units now up to date rent.

I don't see the 4th tenant moving out as there rent is very low. 

My question is the home is pretty much owned outright loan of less than $150,000.. Its worth around $850,000-$900,000 last refi and that was when the rents were all low and before covid so I believe given the higher rents and now appreciation through covid it would be more..

We gave this over to a property management because we didn't like going into the neighborhood, although I feel as if they aren't really doing much as we got most of the units fixed before hiring them.. 

I have mentioned 1031 exchange out of this property to the family member because he could use it to get into something bigger (as the kids are managing now and do a much better job than the parents did. (The relative says he does not want to do a 1031 exchange and his main reason is because the property tax is so low)... What arguments do I have against this? I suggested if not 1031, then refi and buy another property with that money... Although now rates have gone up, and prices for homes are still high I don't know how to go about this.. As he would rather us put money together and buy one in a few years, I just feel like he has an opportunity now and to get out of a Apartment they don't enjoy because location, and get into something they may be more happier, easier to manage and not have to worry about your home getting graffiti on it. 
 

Any and all input/ideas help and is appreciated!

Welp we will see as we are finalizing a new payment plan through April to get caught up which will be pretty insane if you ask me.. I'm not seeing it happen.. $10,000/month through April.. 

Quote from @Greg R.:

Doesn't sound to me like you're the "stop the bleeding type" if you haven't collected rent in 9 months and still haven't hired an attorney and started the eviction process. 

 I'm the type, its just not my property to be in control of.. I can just try and help and hope the owner listens, which hasn't been the case... The moratorium here I believe has a lot of landlords in handcuffs, but also scared to try things..

Quote from @Melanie Thomas:

With such a high amount in unpaid rent and unfulfilled promises to pay, the 7k is not coming. I am with you, stop the bleeding! Evict, evict, evict! I would partner with a PM company who has a landlord rescue program or something of the like to help! The goal is to turn the performance of the investment around as quickly as possible. Continuing to let the tenant stay for free is not the way to go. Life changing events are a big deal yes, but not one the landlord should be concerned with. Good luck and hope they pay or quit asap! 

 Yes I agree with this.. unfortunately its a stubborn Owner and he isn't letting go as he is saying its much harder to kick someone out and collect then to try and make a payment plan to get your money back... Basically in the 5 months leading from this we are back to square one of him owe the landlord basically the same amount and the landlord wanting to come up with another payment plan... I'm going nuts! :( 

tenant ended up paying $6,000 on Saturday! so we got a little bit least its almost 2 months rent.. We will see what we get next after this contact is signed this week.. To get everything paid up by November he looked to be having payments every 2-3 weeks.. So should be having more coming shortly... Feels like a small win, and the ball is rolling, hopefully it will continue!!

Quote from @Henry T.:

There's nothing you can do. Your Los Angeles city council members all voted to extend the eviction moratorium. 

https://dcba.lacounty.gov/noev...

 yes, I cannot! but it can be a scare tactic and see how they react.

Long awaited reply, As things were being worked out with other jobs... Tenant received there 3 day notice, he came outside to talk to me without wife... He told me give him 30 minutes to look things over and come out to talk, because he stated he doesn't want to be kicked out and wanted to work on a payment plan... (his wife came out to talk with us, that's how you know it was serious)

Yesterday was his last day he should be out, and we can go to sheriffs department today and get it started so they can come evict.. 

We didn't do this today though because his payment plan he wrote up stated today would be a payment of $7,000....

So figured might as well wait another day.. Meeting is set up for 5:30 so wish us luck.... He has another payment set in 2 weeks, basically supposed to be making payments through November twice a month to catch up and be up to date into November... with late fees its total behind comes around $29,000+ to November so we shall see how today and moving forward goes.. 

If it doesn't happen I won't be surprised, if it does I will be... But this is one of many payments so we will see if he keeps his word.. 

I'll post more updates soon. Everyone cross your fingers for landlords. 

Quote from @Katelyn Andrews:

In my experience when the tenant starts avoiding you it’s over with. They can catch up but in my opinion now they know how far they can push. 
I know it’s never comfortable to evict, but it’s not realistic for this to be the new “norm” with this tenant. You are asking for a lot of long term problems. 

I agree, not that I have dealt with it before from a tenant.. But people in general, whether its work related or anything.. non responses consistently is usually a sign of things not headed or being in the right direction.. Its a sure sign of lack of respect for one another, and ultimately hiding... 

Quote from @Wesley W.:

I will wager that a week from now when Garrett posts an update on this situation, this tenant will not have paid the $7,000, as promised.  I will give 10 to 1 odds.

This is the "sunk cost fallacy" punching this landlord in the face.

 Alright, I have been feeling the exact same way! Today is going to be the day of truth!

Quote from @Paul Dashevsky:

@Cindy Tansin A great resource for this is Maxable. Also, I wrote a blog about the pros & cons of building an ADU using a kit (pre-fab) versus using traditional construction. Please DM me and I can send you the link. FYI...most kits that are built onsite will usually still need someone (a local contractor) to build a foundation, run utilities (water, sewer, electricity, gas) to the ADU, and build out any other necessary site-work: landscaping, patio/driveway, fencing, etc. Dont forget to budget for this when you're considering an ADU 'kit'.

 Hey Paul can you send me the link to this blog with pre fab info?