All Forum Posts by: Johann Jells

All fair. I don't actually possess the lease for this guy, the purchase was a short sale and there were a lot of irregularities. He pays very little but does the garbage, snow, and keeps an eye on the place for me. Previously I saw no upside to messing with him.

A legacy low income tenant who was in the building when I bought it 9 years ago is in the hospital. It makes me think about what to do about his horror show live in girlfriend if he died. She's simply, and clinically, nuts, on SSI. Huge, loud and aggressive, threatened our maintenance people.  I've never accepted money from her, never officially acknowledged her as a tenant in any way, but this is NJ where getting rid of a tenant is notoriously difficult. I imagine one "disabled" and on public assistance even more so.

Does anyone have any actual knowledge of the NJ law regarding this situation? I wish I had a knowledgeable lawyer for this stuff, but honestly most Landlord-Tenant lawyers are bottom feeders. Last time I consulted with one I felt I knew more than she did.  The city Landlord-Tenant office said without specifics in the lease or her being on the lease, she's out of luck. But this being NJ, I'm

 I do the same but with Quicken that I've used for 30 years even though they've been making it a bigger pain every year. The reason I don't use one of the newer online services is that I'd not be able to access all my old data. You can't migrate Quicken data into Stessa et al.

We regret forming an LLC. It's huge PITA for a lot of reasons, from tax filing to not being able to represent yourself in housing court. AS for being sued, We got sued like 17 years in, a few years after acquiring units 10-14. Scumbag boyfriend of a tenant who had moved himself in claimed a 'slip n fall' on ice. I never knew till my insurance co informed me. A few months later they informed me it had gone away. Not long after that they basically begged to be evicted.

I asked our insurance broker about an umbrella plan, but he came back with just protection and rate hikes for the individual buildings. Did he not understand or it wasn't a product they offered and he wasn't going to say so? I have no idea.

But this is exactly what I meant by that step of removal you have using a manager. You made an educated decision for some reason that made sense to you, unless the manager is clearing every job beforehand with the owner, the owner never gets to make a decision other than whether to get rid of the manager. And to do that he needs to research what the usual price range is for these things he's been charged for.

I've found this to be the most difficult part of managing my properties, you have to become as knowledgeable as the contractor in order to know the right questions to ask. And even if you know them, you don't always ask them all, after all you've got to give the professional some credit for knowing his business, right? I didn't ask the contractor doing a bath reno if he was going to use waterproof membrane under the tile of the bath surround as has been standard practice for decades. I only found out he didn't when I had to rip out the windowsill in the shower that he didn't pitch properly for runoff. And no, I also didn't ask him if he knew he was supposed to pitch the surface of the windowsill and the inset. He was supposedly a professional.

Plenty of plumber rip off the unknowledgeable homeowner. I could repeat stories I hear from friends. But your relationship with the plumber is closer than with a manager so that you may have notion when he's ripping you off. My plumber knows I know the cost of a water heater and the basics of how it all works, so he wouldn't mess with me even if he wanted to. Without making a project of it, how do you know when your property manager is doing so? It's not like you're paying a flat fee.  FWIW I do the majority of my own minor maintenance, so naturally I'm dubious. I don't mind driving 10 minutes to spend 20 minutes saving myself hundreds.

So what protects you from abuse in that case unless you are well educated in the pricing of common repairs? A situation where your 'agent' has no interest in keeping your costs down and incentive to gouge you doesn't sound good to me. This stuff is legend with 'financial advisers' who invest your money where they, not you, will profit the most.

What do you want? Equity or cashflow? If you leave it as-is and can pay a manager from the rent, then you have a property buying itself for you. Another idea that is probably not going to be popular is to refi at 25% down 15 year using part of the equity, then you'll have cashflow plus leftover money for further investments. That 25% down will earn 9.6% over 15 years even if there's no cashflow or appreciation. Pretty good return for no work. Now, a lot of people here like to churn their investments more to keep the equity earning as much as it can. But that's a lot more work.

Not here either in NJ. The insanity I see is in RE sales, equities and crypto. Now THERE'S some bubbles!

The equities markets have been irrational for some time now, you can't compare to them. They're going up because there's so much money sloshing around in the global pool of liquid wealth (due to global wealth inequality, but that's a different discussion) that it's simply being willed up by the continued investments. The comparable RE market is superlux NYC tower apartments. There's no rational reason for $100m apartments except that someone will pay it to park their money somewhere, anywhere.

This is my 'elevator pitch' for rentals:

If you buy a rental property that does not cashflow ,but pays all it's bill and maintenance with 25% down on a 15 year note, at the end of 15 years you own it outright and have made about 9.6% annually CoC. In more rational times that would be considered phenomenal returns in equities over 15 years, Bernie Madoff territory. Now, pile on the fact that rents go up even if you weren't cashflowing from the start, values go up, and you can do some of the more elaborate refi and reinvest schemes upthread. It's hard to come up with something as safe AND as profitable.