All Forum Posts by: Jeff G.

I had tenants rent my 2,850 SF house for 5.5 years. They disclosed their four dogs before signing, and they gave me a $500 extra deposit for that (in addition to last month's rent). And the wife said to me as they were moving in, "We'll probably have to buy all new when we leave." ("all new" is all she said, not carpet or anything else) Once they moved out I began rehabbing the place, which smelled very bad. I tried everything to fix the odor (scented oil warmers; baking soda on the carpet then vacuum; vinegar), but finally had to tear out the carpet (did it myself). And of course I found that their dogs had peed EVERYWHERE. Bottom of the carpet is white, so urine stains show up perfectly, and those dogs covered a vast majority of the carpet (multiple times in many areas), which was almost the entirely upstairs (1150 SF) & the stairs themselves. And the upstairs floor is plywood - Ugh. I'm kinda anal, so rather than just rolling up each floor & chunking it onto a trailer for disposal, I cut the carpet in each room into thirds, then folded it and stacked it outside - so I still have it. Oh, and the carpet was brand new when they moved in; I have the receipt.

Now, these renters paid the rent on time / every time for 5.5 straight years, and they're nice folks, so I felt kinda lenient towards them when they asked if they could use their last month's rent deposit as their actual last month's rent, so I said yes. AND ... I had toured the entire house with an architect just the month before for modernization planning, and while the house smelled like somebody was living there, it was not bad at all. Turns out they had masked the odor pretty well with incense, perfume etc. And when they moved out they had the carpet steam cleaned ... which prob really awakened the odor.

The tenants ended up buying a house about 2 miles away, and the H/W are both gainfully employed with very good local jobs. The wife makes over $150K (it's available via public disclosure).

I feel like allowing pets is not the same as allowing pets to destroy the carpet. Do you agree? In any case, I'm not surprised the carpet is ruined; just wondering if I should pursue them for it.

So ... do you think I should ask them to pay for carpet replacement? And if they decline, do you think I should sue them?

Thank you ...

I understand that, and certainly with the SM at an all-time high, it "feels" like a market decline is much more likely than an increasing rise. But ... if the share price of a REIT falls and its dividend doesn't change, doesn't that increase the dividend yield?

 I'm 46 ... and in it for the long haul, whatever I do. I generally invest as though I won't ever actually die! Haha! I never know when to sell! In all seriousness, I much prefer long-term strategies that just logically work consistently over time (like index funds) vs home run swings (individual stocks). Thanks, Frank.

No problem, thanks Adam. I fully understand the DIYer mentality; I myself am very much one, even built my own house. In fact I usually take it too far, don't know when to let a pro do the job when I "prob" should! (embarrassed)

Thanks Trevor; I read your post. I don't think I'm concerned with such things as institutional bloat, overhead, expenses, salaries, no physical assets I control, etc ... I don't care how the return is obtained, just so it is obtained. i.e. if the REIT can make me 10-12% while I do something else, well, that would work well for me.

And regarding margin ... real estate investors borrow money to purchase the investment real estate, so, except for the mortgage tax deduction issue, how is that different than buying on margin, which is borrowing $ to invest?

Am I missing something?

RE investors usually put down what 10-25% and finance the rest when purchasing real estate.

Why not do the same in a REIT (or two)? There are some paying dividends of 10%+ right now.

Do you make a higher % than that on your actual real estate investments?

I'm asking because I'm having a hard time finding positive cash flow deals in my area. Well positive enough to surpass that 10% mark anyway. And I feel like, "Dang, why not just put the down payment cash in a REIT, sit back and relax?" i.e. Should I be willing to take a risk on a property, deal with tenants, spend time & money on repairs & maintenance & evictions, for 0%, 1% or 2% over a REIT? What am I missing?

Thanks, y'all ...

My 2 newb partners and are trying to buy a second rental property, one where the numbers work well, and a local credit union is telling us 5.5% for 20 years and possibly with a balloon, whereas we had been planning on 4.5% for 30 years and no balloon.

Wondering if the CU's figures seem reasonable to you, or if you might be able to provide another lending source(s).

We are shopping around, locally, right now, but it seems likely we have a deal, so we're kinda antsy to find the best lender terms we can.

Thank you for whatever you can offer ...

Been in FL for 38 years. Why leave now? :)

I've always liked the NC mountains, but my closest fam members live near me here in FL, so I just visit NC from time to time. I imagine just visiting NC will continue making me like it vs moving there.

Thanks again, Adam and Kim. If an insurance inspector saw our MH, it would seem obvious that we're rehabbing it, but then again some rehab projects stall ... and our MH is indeed vacant right now. Fortunately it is 'just' a MH so if the premium the agent sends me tomorrow is too high, we might just take the risk for another month or so. Nobody wants to lose $30K, of course, but since we're a 3-person team, that's "only" $10K each, right? (yikes)

Thanks all. We thought about the vandalism angle, but decided rental monsters NOT living in the MH 'should' make the insurance co happier. Guess not. Had they seen this one after the prev tenants moved out, they might've thought otherwise.