All Forum Posts by: Greg Franck

@Mikel Kaubfa

You may want to consider including utilities that would have the ability to place a lien on the property due to non-payment. Most notably in my area this is sewer. I currently DO NOT include this in the rent but going forward I am considering it. The tenants are always behind on the sewer as it cannot be shut off like other utilities, and even though we require it to be placed in their name ultimately I am responsible for paying it as the property owner regardless of usage. To my knowledge other utilities such as gas / electric will pursue the tenant for payment and I have no liability for the bill. Hope the is helpful.

@Rick Albert

I saw some indicators of this in a few different info sources as well as anecdotally through local channels. We are going to use a bit of both strategies (shorten available term / heighten qual standards) dependent upon asset class. In my opinion the real losers in all of this will be tenants as quality housing will be more difficult to find. Hopefully we see the expiration of the moratorium at the close of June.

@David RosenhausI would agree with many comments on this thread. It is hard to start from the position that you are in. Despite what many will say, in my experiences you will need to have a strong balance sheet, be credit worthy, and bring value (IE experience) to find quality partnerships or invest successfully in RE. My advice would be to save, rebuild your credit, build your knowledge AKA "value" and develop partnerships.  Although there are deals to be had in this market today, there will be deals in the next year or two as well. Best wishes for future success.

Originally posted by @Greg M.:

Actually, this isn't a bad thing. For those of us who planned, have adequate reserves, and can ride out this short-term screw job, we will have a lot less rental competition, be able to be much more selective on our new tenants, and be able to increase the rent significantly. What, your credit score is only 715 and your income is just 5X rent. Sorry, but you don't meet our minimum qualifications. 

This is exactly right...  It is sad for tenants however as many marginal applicants will be unable to find quality housing in the future.

Is anyone hedging this with shorter duration leases for new tenants?  

100% agree with the other BP members responses.  Check how the drainage is set-up.  This is often one of the most overlooked simple ways to address water issues.  Either way I wouldn't be to worried if that is the only issue of concern found during the inspection.  Hopefully you see it to close!

If the homes are in your wheel house and you plan to keep them in the portfolio why wouldn’t you simply place more reasonable offers? Keep in mind that loan amortization and the 6% YoY average appreciation we are seeing right now should do very well for you alone. You can keep sitting on that money (downpayment) or put it to work. IMO too many folks are trying to low ball sellers for homes that they know can make money at higher valuations. As long as you are making a smart investment that has limited downside risk I say take the leap and manage it for prime equity performance.

@Joe Splitrock Joe, thanks for chiming in.  If you recall this was the tenant that you provided advise on originally.  That advise was spot on by the way and worked well.  These are very large beds in both the front and side of the house and it had not been maintained at all.  It actually took me more time than the 6 hours and removed over 10 lawn bags of debris.  I had also contacted a landscaping company who stated that for a day laborer they would charge me $38 so the $35 per hour isn't out of the question.  As stated in my response to the tenant (counting the labor) she is only being charged for about 1/3 of the overall rehab.  Hopefully she realizes that pursuing this is not worth her time.  I reviewed the MO deposit laws and found that tenants can sue for twice the amount.  Either way I am dug in, as $420 isn't a big deal if I do have to pay.  At some point you just have to stand your ground, and I firmly believe that we have treated her beyond fairly and the deductions from her deposit are justified and supported.  I hope that all is well with you!

Thanks Lynn.  I reviewed our state detail and it isn't clear on the labor charges. Either way the reason I didn't charge for the full rehab is BECAUSE I changed things.  From what I read in MO deposit disputes the tenant can file a suit for the amount withheld.  Appreciate your feedback and this is learning experience for me to ensure going forward any above and beyond work is completed by a third party.

Update for any of you following this thread.  I slept on this and using some of the feedback provided decided that I would simply stand by my decision to charge.  I sent the below response this morning and will end all go forward communication with this individual.  Thanks to all of you who assisted.

 I got a chance yesterday evening to sit down and review the issue and your concern about the charge in full once again. Below are the facts that I came across.

Lease Agreement

• The lease agreement clearly states that you are responsible for maintaining the grounds.
  • The early termination addendum executed by both parties did not change these terms.

Move-Out Process

• On 9.12.17 you were provided a Move-Out / Key Return communication. In this communication 3 attachments were provided. In the attachment labeled Tenant Duty Checklist it states “remove all weeds from flower beds”.
• Tenant final walk through: During our final walk through the weeds were notated on the final walk through sheet which was signed by both parties.

Total Cost of Replacement

• Materials: $412.00 (Receipts attached)
• Labor at stated in previous communications: $210.00
• Percentage of total cost of replacement charged to tenant: 33%

The above facts outline the details and reason for the charge. It also shows that this duty was something that was fairly communicated to you. Upon turnover of the property the condition of this area (both beds) was above normal wear and tear and classified as neglect. The bed on the front of the house had to be completely redone. This included removing all weed / growth, installing a brick border, laying out landscaping cloth and stone. The bed to the side of the house was weeded completely. I am sorry that you feel this charge is unfair however I am only charging you for a portion of the total cost. If you choose to pursue this further that is your right. I am fully prepared to defend this position with the facts above and all other related documentation from your tenancy. After the completion of this review, my original decision to close this issue still stands. I will be moving onto new business items.