All Forum Posts by: Lorraine Pennington

Hi All, 

Hoping this post shows up those professionals operating in the Seattle area. I will be out in Seattle October 16th and am looking to scout at the area and meet other professionals in person. Would like to start dialogue before then to establish relationship and expectations. Am looking to work with the right person. 

We are looking for 4 plexes and above. I live in California so I am an out-of-state investor for Oregon. 

Many thanks, 
Lorraine 

Woah @Jeff B.! I wrote my thank you's and not until after I posted did I see your response. My vote on your comment was my way to thank you quickly as I was leaving my pc for the morning. Don't take it personal. So thank you, I like posts that provide factual links. 

I'm quite sure that I would not be dealing with this issue if I had screened the tenant from the get-go. But I inherited the tenant. And in hind sight ... and what I now know for future purchases ... is that I should have negotiated some funds during the purchase of the 4plex to cover this units turn over. I knew the tenant was a heavy smoker when I did my inspections. I knew it was going to be a challenge to get rid of the odor whenever he vacated. I knew all of this but I didn't address it at the time. So I will take the responsibility. This was my 3rd rental purchase so learning as I go but do wish I would have had the foresight to get some funds from the seller! 

I'm leaning towards countering his offer at $100 and calling it a day. I like the comment of "smart decisions not necessarily being the 'right' decisions that @Mike M. made. I'm going to sleep on it. I'll still update everyone on the final results. 

Thank you @Mike M., @Jim Shepard, @Steve Vaughan, @Alexander Felice. 

My goal is to get up to 20-30 units in the next 5 years and I must say that dealing with angry tenants is a huge turn off! lol. I've got to master the human relations side and not let these little "spats" affect me. So THANK YOU for your prompt comments. All have valid points and I've formulated a blend of your suggestions. 

I'm going to redo the deduction summary ... reducing or eliminating some of the items that could be wear/tear (closet bars/doors, etc). Hopefully taking some of air out of his anger by showing I'm conceding on some points. But I'm going to hold fast on the primer and the wipe down fees which is where all the expense is coming from. At the end of the day, it will reduce the total charges being accessed to him ... but it will still not show a refund. But more importantly, the remedy of the smoke damage are true and real expenses. I'm setting up the foundation of our property management business and I can't operate our business on fear. No way. 

I'll come back and update the thread and tag your names. It will all go down this week so here we go!! 

Appreciate your input again ~ thank you. 

Lorraine 

Hi Everyone! 

I've got a situation that I believe I'm in the Right, however just got off the phone with the tenant and his anger and frustration has got me thinking twice. This is the deal. 

I bought the property 2 years ago (a 4 plex in NM) and inherited this tenant. He has lived on the premises for 7 years and left in June. He paid $675/month with a $500 security deposit. He smoked indoors and there was so much nicotine damage that I had to charge him for it. There was nicotine on the walls and ceilings. The appliances and light switches were all yellowed from the amount of nicotine. Everything in the unit (floor to ceiling) was wiped down with vinegar/water and then I shocked the entire unit using an Ozone Generator. 

His argument is that he specifically looked for a lease that didn't stipulate NO SMOKING so that he could smoke inside his home. Since the old lease with the old landlord was still in place, he says he is not responsible for that damage ... and that in fact, it is not damage ... that it is just the cost to a landlord to clean it up. My argument is that no, just because a lease doesn't specify every imaginable damage doesn't mean that it makes it okay. Smoke damage is still damage. I charged him not only for the wipe down of the entire unit ... but also for the KILZ odor primer. We never charge our tenants for painting to turn a unit ... but in this case I had to use a heavy duty sealant primer to ensure the stains and odors don't come right back up. 

His deduction detail actually shows that he owes me money ... but I was willing to not to collect. He is now asking for $250 of the $500 deposit. Part of me wants to offer him $100 to appease him and move on and avoid any potential legal costs. What does your experience tell you to do?? 

Here is the detail of his security deposit: 

Removal/Clean up of was, $75

Wall Repair, $150

Reattach bathroom bar, $25

Reattach Bedroom Door, $25

Reattach Closet bar, $25

Carpet Cleaning, $60

Ozone Generator, $49.99

Treat home with 40 hours of ozone generator, n/c

Clean walls of nicotine stains (16 hrs @ 12/hr), $192.

Clean kitchen flooring/appliances (8 hrs @ 12/hr) 

Kilz Odor Seal Primer 2-5g buckets, $304.

Application of Primer (48 work hours), n/c

SUB TOTAL 1001.99

Less Deposit (500.00) 

Total Due $501.99. 

I told him we decided to not pursue the collection of the $501.99. 

Appreciate your feedback, 

Lorraine 

@Account Closed I'm going to inspect the unit this Friday and do what you suggest ... take pics showing no furniture, etc. I do still plan on moving forward with the judgement however. Our screening process clearly states that if you had a prior eviction that you will not qualify to rent our homes. This tenant was absolutely horrible - in both their communication style and behavior. Having a judgement will at least raise a red flag for you other landlords out there. Save someone else from having to evict this person.

Really appreciate both your inputs ~ thank you. I feel confident about my next steps. :)

Best,
Lorraine

Hi All, 

I searched BP and couldn't find any past threads about this topic so wondering if anyone has encountered my situation! 

I have a tenant who flat out told me they were not going to pay June rent. I served a 3 Day notice of non-payment on June 8th and then filed a petition for eviction with the courts on June 12th. Our court date is set for June 24th. 

Another tenant (it's a 4plex) reported to us that there was a Uhaul truck there last night and that the tenant was moving their stuff. So there is a good chance this tenant will be gone in a few days ... and not even show up to the court hearing. 

I still plan on proceeding with the court hearing to get the judgement ... but my question is this: Can I take back possession of the property now? I can call and knock on their door but Tenant has been unresponsive during this process so I don't expect to get any confirmation of their vacancy directly. So do I have to wait until after the court date? Or just post a 24 hour notice of inspection and then enter the premises? 

Any input would be appreciated. 

Thanks, 
Lorraine

Hi All,

Am hoping this question comes up on those investors and professionals operating out of Albuquerque, New Mexico.

Am looking for a recommendation for an attorney or law firm that can create a NM LLC's for us. I've made a few phone calls to some random firms I found online ... but didn't feel very confident with giving them our business. We are looking for a fully customized LLC creation and not the standard shell of an LLC. Anyone doing business out there that will recommend their contact?

Really appreciate it and thank you in advance!
Lorraine

Hello All, 

Looking for a recommendation for a RE attorney here in southern california to set up our LLCs and any future legal needs we may have. Anyone have anyone they'd recommend? 

Thank you in advance! 

Best, 

Lorraine

I think the larger investors/asset managers definitely have good points. I enjoyed reading them and they gave me another perspective. Here is my experience from buying a 4 plex last year ,.. 

All units were occupied and I wanted it that way. I wanted it to cash flow immediately. During the inspections, I had an opportunity to talk with 3 of the 4 tenants and introduce myself ... along with get a feel for their personalities and of any complaints. No major complaints and everyone seems to keep to themselves. 

Two of the 4 units had already been remodeled. Leaving me 2 to do myself. I budgeted 15k for each of those. I wanted to conserve my cash so I did no evicting. I also honored all existing leases. After 3 months of owning the property ... my first lease expired and the tenant left on its own. That was remodel #1 of the 2. 

In Jan another lease expired. No remodel on that one but I raised the rents and we are signed on for another year. 

The other two expire in May/June. I'll raise the rents. But I'm in no rush to renovate the last unit. Our profit on this specific property was 13k last year ... which is close enough to covering the 2nd remodel without using my own cash. Of course, then I would show 0 profit for year 1, so depends how you want to spin your numbers to yourself! lol But I did already have the 30k of my own funds earmarked ... but it is nice to not have to transfer the last 15k over. I'm big on preserving the cash I do have. 

So in my perspective ... I want the units filled and I want the cash flow to keep flowing. I want to limit my vacancies and keep my returns on target. So I would see no reason to evict them all ... plus that doesn't sound like a fun process for the landlord or the tenant. 

Of course if your construction plans are extensive ... If you're knocking down walls and such ... then perhaps it would be cheaper and faster to have no tenants. I've not had that experience though. Good luck to you and hope that helps! 

I agree with some of the other posters. Leverage the equity and pull out the cash. You will be able to leverage at least 70% of the value and put it down on other properties. 1031 has some time limits that will govern how fast you need to invest it. Target a higher return than the 5%

Keep us updated ... we'd love to hear what you decided your next steps to be.  Good luck to you!