All Forum Posts by: Jack J. Nowotarski

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $285,000
Cash invested: $35,000

5/4 Basement rancher, Live-in Flip, to extremely successful short term rental while occupied, now to full time single family long-term rental. House purchased in 2018 for $285,000.00 conventional. Remodeled and occupied premise while in-law suite was being remodeled. House eventually used a 3-unit short/medium term rental. After 6-month remodel refinanced house, appraisal came in $150,000.00 over purchase price. Refinanced again in 2020 to capture 2.9% interest rate.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,000
Cash invested: $8,000

Contributors:
Alison Nowotarski

Single Family 3/2 Br/Ba 1350ft^2 in a highly desirable neighborhood, strictly A quality tenants, 12 Month Lease, VRCM (10,5,8,0), Would love to pick up another few houses in the immediate area.

What made you interested in investing in this type of deal?

A combination of House Hacking and eventually listening to BP. We had been house hacking through AirBNB (in the good ole days) and eventually this led us to this opportunity.

How did you find this deal and how did you negotiate it?

Off-market, Co-Worker/Family Friend.

How did you finance this deal?

FHA, lived in the home for the first year of owning it and continued to House Hack.

How did you add value to the deal?

Minor aesthetic updates on the interior of the home, Brand New HVAC and ductwork throughout the entire property.

What was the outcome?

So far so good (knock on wood), the property is in high demand, and we are on our second set of A quality tenants. I have been asked by multiple colleagues and friends if and when the property will be available for rent. The screening and application process are fairly demanding and we will only accept the most qualified individuals for the property, which payment wise have been the most stress free and have yielded the highest consistent cashflow.

Lessons learned? Challenges?

Don't give new tenants an overly detailed check in list, the tenants will rate everything as low as possible to avoid responsibility if any piece of the property has been damaged. To cover your ASSets on this, DOCUMENT, document everything, take photographs and keep all receipts from cleaning crews and contractors whom have made repairs.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with my wife and myself, this property eventually led me into the RealEstate industry and I am now a Residential and small Multi-family agent in the East Tennessee working with Investors as well as many First Time Home Buyer and individuals whom would like to begin in the Real Estate investing world.

Hey everyone, 
Thank you for the quick and detailed responses, I can see now that my biggest mistake is the rating system itself and leaving a directed/specific area question/response for my tenants to answer. A handful of you suggested a more generalized, less detailed Clean & Functional check list which I think would help cut down on the ridiculously meticulous scrutinizing from the tenants (@Marcia Maynard, @Jay Hinrichs, @Scott Mac, @Cassi Justiz ) . As the landlord I did take pictures of each of the rooms so I have documentation there, I also was there with the previous tenant to perform the tenant move out inspection and keep that documentation for comparison.
 
@Joe Splitrock, I did keep the cleaning crew receipt, which if any issues arise I will bring up.

I also run 3 longterm AirBNBs (1month - 6 month) at my primary residence (in-law suite) and we are fairly specific about the type of clientele (A and above, typically millennial) we allow into our house, which that screening rolls over to our rentals.
Although many of you will disagree with me I view managing High Quality clientele rentals as a balancing act of give and take, obviously saying NO to ridiculous requests, but giving an audience and entertaining issues at the specific rental. This is especially with the new (soon to be largest) generation of renters, long story short invest a little bit more sweat equity/capital, charge a higher rate for less stressful tenants who you can get on Autopay.

If we have any issues with the security deposit at the end of the 12-month lease, I will definitely be bringing up the pictures, receipts and previous tenants walkthrough check out list.

Either way I appreciate everyones response and will definitely be implementing many of the suggestions posted, and if anyone has any questions about RealEstate in Knoxville, or East Tennessee Market feel free to connect.
Cheers,

Hello everyone,

I have a single family rental in a A quality neighborhood that has been nothing but fantastic for the past year and a half. The original tenant was a Godsend and honestly just paid us to use the 1350ft^2 house as a storage unit for a year and a half, unfortunately she has moved on. The home has very little wear and tear on it as most of the property had recently been updated. We recently signed our new set of tenants to the property for a 12 month lease, a young couple very well put together and qualified. On paper they are the ideal candidate and made it through our screening, background and income verification with no problems what so ever. Prior to moving in I made minor repairs, and had a cleaning crew come through and perform a deep clean prior to the new tenant moving in.

We as landlords provide a tenant move in packet, which has a move in check list which the new tenant. We have sections for each room and subsections for floor, walls, counters, ceiling fans, etc... rating them on a 1 - 5 scale, with 1 being horrible and 5 being perfect.

The issue is: The tenant rated almost everything throughout the entire home as a 1, literally everything had issues. Ex. the wood-burning fire place was rated a 1 due to residual ash and rusting iron firewood holder. The white towel/linen racks in the linen closest had a visual yellow stain on one of the lower racks. They rated the hardwood floors throughout the house as a 1 due to minor scratches from furniture and habitation traffic. Long story short they are very particular and had verbally stated the house was in a disgusting condition when moving in.
Now they seem like upstanding individuals but are very particular about their living conditions, but what I am worried about is if they trash the house and when we go through the move out check list, they claim that it was like this originally since when they moved in everything was disgusting, when it clearly wasn't. 
Also we had taken pictures before the tenants moved in but nothing super in depth just room shots.

Does anyone have any suggestions as to how to approach this, or any advice?

Cheers,
Jack J. Nowotarski