All Forum Posts by: Jeremy Rusnak

I would also add that an important part of your inspection process should be to take a look at what is using water in the home.  For example, a couple of my duplexes were built in the 70s.   There are two houses on the same street built by the same builder (same exact floorplan to be exact).   The water bill for one duplex is currently $1k more than the other.

Guess what?  They have older toilets that use more water and old showers.   Guess what, I'm going to upgrade your bathroom!   Here's some nice new tile, new hardware, and a brand new toilet.   But I'm going to claw back a good bit of money per year by cutting water usage substantially.

There car garage for sure.  In my area, almost all new construction of higher level homes is three car garage.

When I built my home in 2006 I did things to future proof it.   I did things like had my electricians ran multiple smurf tubes from my panels (which I upsized and gave lots of extra room for).

I added solar panels a couple years ago and boom... They just had to pull the wiring from my attic through the smurf tube conduit.  Very quick and easy.  Ditto on the electric car wiring.   I have a Chevy Volt now and adding the home charger was very easy.

So my suggestion would be to do the little things like conduit, upsized wiring... And then you can advertise as "solar ready,"  "electric vehicle ready," etc.

The only thing I might suggest that I really love in my last two homes is installing zoned heating and cooling.   It does add a bit more to the price tag, but only having to heat and cool your upstairs overnight does make enough of an energy impact I think it's worth it.  And people understand that, it's easy to explain....You can control the heating and cooling on each level of your home individually.

Thanks Jim!   I agree with the three year lease term.  That's way too long for me.  My other properties are all month to month and I think I like that approach.  It gives a lot of flexibility to all parties.

I tend to agree with you, it feels like throwing good money after bad to fix something only part way.   I'm still curious to hear other people's strategies.   It is interesting learning the different approaches.

Hi all.

I'm in the process of closing on my third duplex!   The great part for me is that it's on the same street and is the same floor plan as my second duplex.   I was able to rehab a vacant side of the other unit and re-rent it for an additional $140 a month in rent.  So I would like to eventually bring this new purchase to that standard.

It turned up during the inspection that one units shower has been leaking behind the tile for years (numerous ineffective repairs made) and there is visible damage to the subfloor under the tub as seen from the crawlspace.   It isn't a "the floor is going to collapse" situation.  The floor isn't soft, there isn't an oder, but I tend to be anal about any water issues.

From where I sit there are two options.   A quicker, cheaper repair like installing an adhesive surround over the existing tile that would prevent the problem from getting worse until the unit is vacant.    Or rip things out and get it corrected as soon as possible after I take possession with the tenant still present.

My contractor thinks it will be a 2-3 day project, but with water damage you never know.  We could pull out the old stuff and find additional damage that wasn't visible.   This is the only bathroom in the unit.

The tenants in both units are friends and currently are on month to month leases.  They want to stay long term, and said through the agent they would be willing to sign three year leases in order to do so.  I do need to raise the rents up a bit to get them closer to market, but I don't want to drive off a stable situation like that as long as things cash flow.

If I do have the more major work done, I have read other threads where people have put their tenants into a hotel while the work is being done.  I've also seen other landlords rent a port a potty so it's on site.  Others offer a discount in rent to figure it out on their own.  Others offer no discount on rent and just talk to people and the tenants and tell them their will need to make other arrangements themselves.

Since this is a new purchase I want to set the right tone and not go in looking cheap but also not giving them complete control over what happens if I go with option two.   I personally don't feel it's okay to tell a tenant they simply won't have a bathroom for days, even if local laws allow for that.

What have others in this (hoepfully more specific than previous posts) situation done?   

Hi all,

Dug around trying to find something specific to my topic without much success...

While at one of my properties today for an unrelated issue, I happened to notice a hole in the drywall in the hallway.   Not big, but noticeable.  The tenant has not mentioned it to me at all.  I do have a clause in my lease that damage should be reported and that I will inspect units every six months.

When you notice something like this how many of you feel like you want to take care of it right away?   What's your threshold for letting something wait?   And if it's clearly negligent, how do you handle charging the tenant for something that might normally come out of the security deposit at move out?

I've been being the "good landlord" who just fixes wear and tear unless it was obviously intentional.  However, I don't want to end up in a situation where I'm repairing everything for free.   And fixing three holes at once is cheaper than fixing one hole on three separate visits, but I feel like if a place starts to look beat up the tenant and/or guests aren't going to treat things with as much respect.  (Not that I am getting a lot of holes, just illustrating a concept!)

How did you folks learned to strike the right balance? 

I have been trying to target $100 per door per month in profit myself.  Right now I have one duplex earning $175 a door with good tenants.   My property taxes went up because I improved the building and it's an extra $40 a month out of my pocket now.   Now I'm down to $155 a door a month but I am not raising the rent this year.  

In addition to the turnover cost, you have to factor in other unknowns in my opinion.  The new tenants may pay on time, but maybe they love their dance music with a lot of bass.  Or maybe they are a "heavy walker."

Maybe I am too new at this game, but as long as each property is performing to the $100 a door target I have for myself I'm content to keep stable tenants who like their neighbors. I'm focused on finding the next building that yields me my target of $100 per door --- that will make me more money right now than wrestling a stable building for another $20 a door.   I figure when the market shifts and financing is not as affordable for me I can focus on optimization vs acquisitions.

Chris,

Thank you for the feedback. I completely concur with you that giving him the money back is "right" I just wonder if I am able to limit it in some way.  Not out of greed, just because it takes up my time to do the extra legwork.

I suppose if it continues with this one client I will just not take advance payments in the future. I'm just more curious if others have run into this as a common theme or if there is anything special I should do to protect myself with other tenants who may opt to do this. 

Thanks,

Jeremy

Hi all,

I have a tenant who is by most accounts pretty good.  He is on a month to month lease, single parent working two jobs which I really respect.   He has been late on rent one time which we worked through.

When he received his income tax refund he wanted to be extra responsible so he pre-paid rent until October.  Sounded great to me aside from a little extra accounting.

However, twice since then he has run into "unexpected" circumstances, for example a car repair.  He asked for a partial refund of October earlier and the rest of October over this weekend to cover the latest emergency.

I've done a little Googling and it seems that since it's prepaid and I can't book the revenue until the month rent is due it needs to be sitting in the separate account I use for security deposits, which is fine.   My question is, is it his money until that point?

I have no desire to act as a free bank for tenants but I get the sense that I can't just say "no" to refunding prepaid rent.   There is no language about it in my lease.

Just curious what people's experience might be on this kind of issue.  I don't want to open my mouth and say something that is legally in the wrong or a gray area.

I've currently got two properties and am closing on my third this month, so I'm definitely still learning that balance between being a nice guy and not creating a situation where there are loopholes people can take advantage of.

Thanks for any feedback!

Hi all,

What is the best way (if any) to handle updates to a tenant's property condition documents after they have already moved in?

One of my rental properties was built in the early 70s.   Many of the windows were missing screens and the windows difficult to operate (or not at all) when I purchased the property.  The status of those windows is noted on the tenants' condition reports they signed when they moved in.

I have been doing upgrades to the property and just replaced all the windows.  I'm concerned that without a new signed document from both parties when move out time comes I may have no recourse if there is damage that happens from this point forward.  

Can I create an addendum that the tenants sign stating that all windows are in new condition?  I don't really want to redo the entire document since there are a few damage issues that would already be charges on the old documents and that seems a little messy.

I'm curious how other people handle this, or if I could run afoul by asking residents to do something like this.

I think the main thing is for them to know the coins were yours for a certain time period before you paid off the loan.  

Maybe a copy of the blockchain transactions showing you move the coins into your paper wallet and then back out to Coinbase prior to converting them to pay your car loan?  This would give you a third party source to show when you originally acquired the coins.

I keep most of the coin I am going to need for these kind of purposes on Coinbase partially for this reason, it's easier to show the trail and point to a US company than try to explain paper wallets and all of that stuff.  Unfortunately have to take a little more risk to make sure the coins can actually be used.

Unfortunately at this stage, especially when you involve RE transactions, leveraging things like bitcoin means your part evangelist by default.