All Forum Posts by: Jason Hines

I’m a new landlord. I just purchased my first duplex in October and I live in one unit. The tenants in the other unit have been here for 8 years. The seller raved about how great they are and I have had nothing but good experiences with them so far. They keep their unit clean, are not loud, took care of snow removal during the storm last week.

Their lease ends on 1/31/21 and we have already signed a year extension for just the two tenants starting on 2/1/21. I just found out that a 3rd person is living there.

What should I do? I think we need to amend the lease and add the 3rd person. Should I also be raising the rent? The only utility that I pay for that would be affected is water. But we haven’t got a water bill yet to get a baseline.

Any and all advice would be greatly appreciated!

I JUST closed on my first property in Allentown. I was looking strictly in Easton for a while but there were so few options, the deals weren't great, and there was a ton of competition. That being said, I was just using MLS/Zillow/Redfin to look. I expanded as far west to Allentown and found a great deal. Allentown has for more properties available and there is massive investment happening here from the city/state and from private companies.

It's still very competitive here. There were 13 offers on the property I got. Good luck!

@John Center Thanks. We ended up finding a better property, at a better price, in a better location! I guess it was a blessing in disguise. That being said, I will be saving your response for future reference as we continue to buy properties. Cheers!

@Brian Valdivia - Thanks for doing that math. I like the idea of a longer lease to solidify the income, even if it's a bit lower than market. I'll have to think on that one...

@Mike Wood - Normally I would agree with your call to not have them reapply. One thing I forgot to mention in the original post is that the father was evicted due to non-payment less than a year ago, so the mother moved in to help the son. The original tenants were the father/son and now its mother/son. I would feel better having them checked out.

I like your train of thought about evictions though. I don't want to have to go through with one on my first go, especially if the courts aren't even open for them. One good thing I have going for me is that the seller told the tenants to expect a rent increase of at least $100 and they didn't seem bothered by that. Maybe an increase to $1100 would be a nice middle ground.

@Jacob Lapp Congrats! I am in the Lehigh Valley. Funny that we were in the same situation. I can only hope that my outcome is similar to yours. I like the idea of juicing the deal with renovations that I was planning to do anyway. Did you talk to the tenants right after closing? Like did you just knock on their door and hash it out? I would love to know how you started that conversation with them and whether it was in person/via email. Also, did you have them reapply?

About your journey so far, I have a couple questions if that's ok? It sounds like you are going to live in this new property, so am I right in assuming that your first deal was also a multifamily that you also house-hacked? Is that first property now fully rented to tenants? 

@Brian Valdivia Thank you for the response! I really want to avoid eviction so I may take your advice. Would it be a true eviction since they wouldn't be under a lease anymore on 11/1?

Also how would you feel about a provision in the lease stating that rent would increase from $1000 to $1200 after 3 (or 6) months in case they want to leave?

@Joseph

@Joseph Firmin Thank you! We were thinking about instituting a slightly lower rent to have the security of a good tenant so I'm glad you mentioned that. I'll take a look at those laws today.

We are set to close on our first duplex next Monday in Pennsylvania. We will be living in 1 unit and would like to continue renting to the existing tenants in the other unit. They have been there 10 years, have taken excellent care of the unit, and were very nice when we met them during the showing and inspection.

My questions are in regards to taking over the tenants, timeline for certain things, and general tips. 

Their lease is set to end at the end of October (currently month to month) and the seller will be giving us the prorated rent for October and will transfer the security deposit to us as well. Now this is where it gets fuzzy for me. The unit should rent for around $1250/month but they are only currently paying $800/month. We would like to raise it $1200/month at least which I will assume make them unhappy and possibly unable to pay.

We plan to make them reapply to rent the unit and do a full background check, which should allow us to determine if they can afford $1200/month. If we determine they can't afford it, how quickly can we force them out? Since we're new owners and since they're not under a lease as of 11/1, can we legally make them leave on 11/1? Now, I'm not a jerk and I realize that 3 weeks notice to move out is rough, especially in today's current world state and the holidays upcoming. We've budgeted for and are OK with letting them pay current rent, or $1000/month through the end of the year so they can find a new place. If we do that, what specific verbiage should I use in the lease to make sure I can get them to leave in Jan or Feb? If that's a bad idea, please tell me. Any advice you have would be greatly appreciated. I truly don't know.

Now, if we determine they can afford it, but they refuse to pay a 50% increase, can we force them out on 11/1? 

And finally, if we determine they can afford it and they agree to pay the increase, should we have the new lease start right on 11/1? Should I also collect the extra money for the security deposit at that time? I feel like the answer is yes to both of these questions. This seems the easiest for everyone, but might not happen. 

@Mike McCarthy

Thank you for this. I slept on it and feel better about everything after reading your post and what the others said too. We’ll prob try to negotiate the price down a bit, to cover at least one boiler replacement. I also found UGI rebates for new boiler installs or Combi boiler installs. Not sure if Combi boilers would be appropriate though.

I reached out to some brokers earlier today but don’t expect to hear from them until Monday. I just hope they’ll cover a home with boilers that old.

On a separate note, what it was like to coach Aaron Rodgers?

Thanks @Reinaldo Lopez. Thats a good site, however these are gas boilers, not furnaces, or are they the same thing? The seller is retired and looking to get out of real estate and wants "the easiest transaction possible". I'm going to do what best for me but I can see him walking away and putting it back on the market.

Regarding insurance, from what I have read, homes older than 100 years are harder and more expensive to insure. I suppose I should just call around and find out.

We finally had an offer accepted for a multifamily that we plan to house hack in a great up and coming location. The current owner has owned the home since 1990 and has taken great care of it. We had the inspection done this week and just got the inspection report. Now that I've gone through it, I may back out, but that may just be me being scared. 

- Both of the gas boilers are from the 1950's, but are still working. No local HVAC places are open to giving me rough estimates but google is telling me anywhere between $3k-11k. Out of pocket, that's just too high

- The roof is modified bitumen and is coated with aluminum oxide. The inspector said its good, but said you can only coat it so many times before you have to replace the whole roof apparently.

- Getting insurance might be difficult too. The house was built in 1860 and my mom (home insurance agent) advises not to buy the home even though those are the only two major issues.

Any advice? Am I being smart here?