All Forum Posts by: Gwen Fyfe

I'm glad yours is going well so far too!

Another thing to keep in mind just in case you do hit any rough patches is that offering subsidized housing is always an option. I wouldn't recommend taking CMHA vouchers (I've done it a couple times and I can't emphasize enough that CMHA can be extremely difficult to work with) but I've started giving EDEN a heads up whenever I have a vacant unit. They're very easy to work with - inspection standards are actually reasonable and the workers there are incredibly responsive. I've gotten a couple of amazing tenants through them. The agency usually work with clients who are going through a temporary emergency, so you'd get 6-12 months of guaranteed rent checks and then they transition to being a normal tenant. 

Ex. I have lady who will start paying her own rent next month - single mom who was getting out of a terrible situation, but is finishing manager training at a restaurant here and the employer can't say enough good things about her. Now she's making great money and wants to stay where she is for years so that her kids have some stability. I really like EDEN, it's a great way to find the folks who temporarily need a hand but have a solid recovery plan worked out with a caseworker. Just another option to keep in mind.

Stock market as soon as I started working, real estate at 28, about 4 years ago. I think it's great to start early but I'm also a little concerned about young people going into this business with the "I'm all-knowing and invincible!" attitude so many of us have as young adults. I definitely had to learn some hard lessons in my first year or so.

My rentals are mostly in a suburb of Cleveland (Bedford) but we've had a couple of units turn over since the pandemic started and haven't had any problems getting good new tenants. I'm also an accountant working with a lot of small businesses in Cleveland and Lakewood, and I'm definitely seeing an impact from it, but surprisingly few of my clients seem to be in real distress. Even restaurants are pulling through. For better or worse, Cleveland is mostly open for business and economically we seem to be doing okay.

Hey Jessica, just reading through this thread after our conversation about my roofer. I took the liberty of looking the property up on the county auditor site. The $85k is a little high - I've purchased 3 duplexes that size or larger in Bedford, with comparable or fewer repairs, for about $75k each - but not a horrible deal at all. Especially with the location! That's a lovely spot for families and a nice large lot. And you're getting solid rents. 

(You might be able to increase it a little when things calm down. I'm getting $850/side for 2 bed/1 bath at one of my Bedford duplexes - nice units but my building isn't set back from the street like that and isn't right next to such a nice large park.)

I'd hang on to it. It's a nice investment, you just need to get through this tough time. See if you can get the roofer I recommended to take a look, they're really good about doing only the repairs that are most urgent. If you can't get in touch with them let me know and I'll see if I can bug them. Also, my husband is in the neighborhood doing the small repairs on ours all the time, if you want someone who isn't interested in making a buck off of you to drive by and take a look.

If you do decide to sell it, let me know and maybe we can avoid realtor fees! ;)

I use S&K Construction. They do great work, very responsive, very fair pricing. Over the last year I've had to do a complete tear off & replace on one property, major work on 2 others and a couple of minor repairs. S&K was a lot more straightforward and honest about what work needed to be done immediately and what could be delayed for a couple years. (Instead of trying to get me to tear off all 3 of those roofs like some others.)

No bull from them. Especially if they know you're a landlord with multiple properties, they'll want to get your business on an ongoing basis.

Edited to add: I just remembered they tuckpointed a chimney for me while they were up there because they felt bad I had to do so many roofs in one year, lol

For sure, but - this is something you're making a business of, so in court, a judge is likely to think that you should have a better idea of what the property is worth than a neighbor gossiping about property values or whatever.

Personally I would steer clear of the overpayment argument, but if you use it I'd focus on any issues you found after closing. 

Did you actually overpay for the property? Purchasing it for what you think it should be worth in 10-15 years makes no sense, especially when you have that inspection report with a list of all the things that need to be fixed.

If I were the judge here, I'd say... Okay, you paid $345k knowing about all these structural issues? Great, assessed value is set at $345k and I look forward to raising it further when you've completed all the repairs in a few years.

I think so too! Unfortunately Bedford can be a little touchy about this type of change. If you get the right person at the city and they see that you're really trying to do the right thing they can be great to work with, but overall the city isn't very landlord friendly. 

For example... For that same property, because it's 4 units, the city calls it an apartment building and I have to pay for my own separate trash service. Everything with fewer than 4 units is covered by the property taxes. I don't get a discount on the (pretty high) property taxes, but I do have an extra $60/month bill, and the city calls me personally to nag me if the city service accidentally empties the trash bins for that property. And it's really not an apartment building! Argued this one with them for two years but I'm still paying that damn $60/month.

So I'm trying to build up lots of goodwill before I ask the city water department to remove those other three meters, ha.

Water bills are the bane of my existence, I could ramble about this subject all day. I don't want to do things like remove external spigots, because if tenants have space for a car or garden I want them to get full use from the property. But I've tried a lot of things to handle the bills.

You can make the tenant responsible if they have their own meter, and I've done that in a couple units, but I wouldn't recommend it at all. The issue is that if they don't pay, you as the landlord need to pay the whole back bill and reconnection fee to turn it back on for the next tenant. If I'm dealing with an eviction or less than friendly move out and they were responsible for their own water, I budget $400 for the water. It sucks. The only people I let do that now are inherited tenants who have been paying their own water for years.

For subsidized programs, you can get some utility reimbursement for what you're paying - also often for providing appliances! I have one EDEN tenant in a 3 bedroom house who I pay water/sewer, and provided all appliances. We're in the process of renewing her lease and it looks like I'll be receiving $152 monthly for providing the water and kitchen appliances. That's a big help. I really can't recommend EDEN enough, they're much easier to work with than CMHA, and just on a human level their programs are really reaching the people most in need of stable housing. If you're dealing with apartment buildings, I know Cleveland would love to have more landlords sign on to provide whole buildings of subsidized housing for vulnerable populations like kids aging out of foster care, and I'm sure there would be a lot of subsidies available there. I think they do a quarterly request for proposals on this? It's been a couple years since I looked at it.

On meters - depends if you're really in Cleveland, or Cleveland area, because cities vary. Most of my rentals are in Bedford, which has a ridiculously high minimum monthly charge per meter, $53.91 per month. Only units I have that ever go over are families or have a leak. I have one lot with a 3 bedroom house (family with 2 kids), and three efficiency units, each with a bachelor in them. If you put all three of these guys in 1 unit they still wouldn't go over the minimum. But, because it's 4 units, I pay a minimum of $215.64 for water at that lot every month. And the minimum goes up every year. If I could have it on one meter I think I'd probably be at about $90 a month.

So in Bedford or cities like it with high minimum charges I'd actually like to get all my small multifamilies down to just 1 meter. But because the minimum is so high, one thing I have had good luck with is covering the minimum, and invoicing tenants for anything above it. It does create work, but I haven't had any push back at all from tenants about it as long as I'm up front at the start of the least. And because of the extra motivation to keep water use down, they hardly ever actually go over! (Edited to add: If/when I have more rentals in the city of Cleveland, I'll probably cover an average monthly charge and invoice for anything over it. Cleveland water's site is a nightmare but they do provide clear usage data which would be easy to present to a new tenant. Here's the report showing what the average bill is, I'll pay that, I'll invoice you for above-average usage, and we're all set.)

The bigger issue I've had is tenants not reporting running toilets or "small" leaks, even when I contact them to ask because the water bill shot up. A lot of tenants are suspicious of landlords (understandably in Cleveland I think, a lot of tenants get treated terribly) and don't want to seem like a problem or don't want me in their house. What I've started doing is telling tenants at lease renewals, and reminding them whenever we're in contact, that 

1. taking care of repairs while they're still small saves me money, so I really do want to hear about the repairs, I won't think they're a nuisance or use it as an excuse to check on their housekeeping, and 

2. if they call me in for an early fix on something that will save me money, I'll do a nice little extra for them while I'm there. A leak running for a month in the city of Cleveland can be hundreds of dollars. Upgrading a shower head or kitchen faucet costs maybe $80 and takes 20 minutes, people love it, and it's nice for the next tenant too. Bringing over a big pack of the super strong allergen-preventing furnace filters is much appreciated when people have kids or health problems. Small gestures, builds a lot of trust, gets me a lot more reports of small maintenance issues.

Maybe not feasible for bigger property managers, but for a mom & pop landlord like me managing a few dozen properties, I know all my tenants and properties pretty well and this makes a huge difference. I think of it like websites rewarding white-hat hackers who point out vulnerabilities in their site. :)

Good luck. I live here and I still can't find anyone I trust. I'm in the midst of firing IIP and my husband will be taking over management of all my units. The nail in the coffin for IIP? My tenants had their water cut off because IIP didn't pay the bill.

Feel free to send me a PM.