All Forum Posts by: Chad Hale

Finding cash flowing properties in the south bay is pretty tough right now.  Not impossible but challenging.  I think a lot/most properties are bought because either

   1)  appreciation is their game

   2) They don't know how to calculate a proper return/cash flow.  For example I hear this or something similar all the time, the rent pays for the mortgage.   Therefore it is a good deal.

Best thing to do now is prepare yourself to execute when you do find the right property.  This means,  saving $$, educating yourself in RE, determine which locations you want to invest int,  practice running numbers / evaluating properties etc.  Or as done in the sports world practice, prepare practice repeat.  Execute when game time come.  Biggerpockets is a tremendous resource :)

Best of success.

chad

Hi Janice,

I agree with Kimberly.  A good property manager will keep an eye on your property.  At a minimum, drive by at least once a month for an external view.  You can get a pretty good sense of what is going on just from that.  An internal inspection once a year to verify properly functioning smoke and CO detectors.  This also allows you to see everything else that is going on inside.  I do a move in inspection which includes pictures.  This is a part of the signed lease.  It is very clear to everyone what the condition of the property was in when the tenant moved in.  Also, agreed a short lease is not sufficient.  My leases are 25-30 pages.  Sounds like a lot but it protects both the tenant and the owner.  I hear zero complaints from tenants when signing.  They actually appreciate a comprehensive lease and knowing exactly what is expected of them and me.

Of course, tenant screening is one if not the most important thing you can do.  This eliminates 90+% of the issues.  

@Nicole  In California you better be very careful how you word advertisements.  I would never advertise as no smokers.  I would advertise as no smoking anywhere on the property.  A subtle but very important difference in CA.  This is the information I have received while attending fair housing classes for CA.  I would make it very clear that any smoke damage will result in a loss of deposit and possible further monetary damages as well in addition to possible eviction for breaching the lease.  Of course this is all in the lease too.  In both showing a property and during signing a lease I tell a story or two about the costs to remedy a place with smoke damage.  In short, expensive.  

Back at Janice, I agree,  tenants should be able to make a place their home.  This is one of my primary areas of pride.  Providing a clean safe place to call home.  I just make it clear to respect neighbors and treat them as you would want to be treated.  You want to throw a party.  Not a problem.  Just inform the neighbors out of courtesy.   This becomes even more important in multi-family units with closer living situations.

Regarding someone smoking inside when it is prohibited.  One inside inspection would make that clear.  Smoke is very hard to hide.  Knowing your neighbors is always a good way to keep tabs on things too.  I try to get to know the immediate neighbors as opportunities arise.  I ask how they like their new neighbors (my tenants) and just listen.  I give them my contact info and tell them not to hesitate to contact me with any issues.  

One other thing to consider is a month to month lease.  Currently, this works well in the bay area.  I like this because if something comes up about a tenant that is not right or correctable, a 30/60 day termination notice can be given without having to wait for a lease to end.  The downside is you could have higher tenant turnover.  But getting new tenants right now is pretty quick.  

Regards,

Chad

Hi Janice,

As a both a property manager (licensed real estate agent) and investor in San Jose here are my two cents:)

Yes, you can prohibit smoking on your property both inside and out.  I make this very clear when advertising and again while signing a lease.  I use a specific addendum for this.  A violation of this is considered a breach of the lease agreement and eviction can/will happen.  Now that being said, you can not discriminate in CA if someone is a smoker.  Yes, they are not a protected class per se but CA discrimination laws are becoming so vague that you could end up in court trying to defend why you made a particular decision.  So in summary,  you can prohibit smoking on your property but you should not discriminate against someone who does smoke.  

Regarding noise,  I use a house rules addendum where I spell out "quiet hours".  Typically 10p to 8a.  I do make allowances for occasional parties/celebrations etc.  Basically, I say, Life is important you need to live and enjoy it.  However, you need to be respectful of everyone else around you.  Any other particular things you want enforced can be added here or to any lease addendum.  I also specify the number of days a guest can stay per month.  Anything over that requires approval.  In general, it is your property.  You can set whatever rules/conditions you want.  Depending on them you may diminish your renter pool but that might be ok for you?  I list the big items in any advertisement for the property.  I am a big fan of being up front and honest.  It saves everyone a lot of time and energy.

Yes, you can prohibit motor cycles or working on cars on the property, or parking on the grass etc.

Regarding adding fees due to a tenant's behavior, you have to be careful here.  This can be construed as retaliation which is not lawful.  You are better off to define the rules you want for your property (within the law of course), set the appropriate rent amount, and then enforce the rules consistently and without bias.

If your property is in San Jose, the market is very good right now. You should have no issues finding a good tenant if your property is priced appropriately.  I am typically getting new tenants (well qualified) in less than a week.  Sometimes, I am even signing a lease before the previous tenants move out.  

Some would say I'm too strict or not flexible.   I would disagree.  I am running a business and protecting either my own or someone else's investment/property.  Now that being said, I also tell all tenants, that if there are problems or something is broke, let me know and I'll get it addressed/fixed right away.  I am committed to providing a safe comfortable place for them to call home.  My mantra is firm but fair. :)

Well that was a bit longer than I intended.  Hope it was helpful.

Regards,

Chad

Great advice already given.

I always shop mortgages.  Though I have my favorite go to mortgage brokers.

From a realtor point of view, you want to be confident that the lending part of the transaction will go through.  So you have your favorites to recommend that you know will deliver.   But never demand that someone use them.

Don't be afraid to shop around.  Same goes for an real estate agent to use.  Sometimes, it is simply a better personality match.

Best of success!

chad

Welcome to BP.

Lots of good information here.

Regarding the SF Bay area, prices are pretty high right now.  Anyone's guess which way they might go?   I'd educate yourself and get yourself in a good financial position to take advantage of any deals that come your way.

Best of success!

chad

Hi Michael,

Just found your post and the many replies.

Congratulations on executing on a place.  Trust you have learned much and enjoyed the process.

In California, the California Apartment Association (http://caanet.org/)  is a great resource for landlords.  They have online forms, help desk and other useful information.

In the Bay area, craigslist is all you need to find tenants for "normal" situations.  High end luxury homes may be different.  I used other resources in the past but currently craigslist has been more than sufficient.  Last tenant placement, took 3 days from first listing to signed lease.  

BP has lots of great resources on vetting tenants. Don't skip this step! I am sure you already know this though :)

Again Congrats!  and Best of success!

Chad

Hi Fellow BPers

I am a property manager and investor in the San Jose California area.

My previous contractor has retired and I am looking for a new contractor that I can use to renovate units as they become available.

I want some one who is affordable, does good long lasting work, and that I can trust to get the job done right the first time.

If you have any recommendations I would be grateful.

Thanks much,

Chad