All Forum Posts by: Jessica F.

Rent is due on the 1st of the month. The lease allows for a grace period up to the 5th. The lease also states that after the 5th, there is a $25 late fee and after the 10th of the month, there is an additional $25 late fee imposed. The tenant has not paid as of today. It is their first time paying late but I do not want to set a certain level of tolerance for allowing anyone to pay rent late esp with a grace period in tact.

I now need to notify the tenant that rent is past due and there will be $25 fee imposed. What is the best way to notify the tenant of this? Do I have to do it via a certified letter? Are there certain guidelines since the property is located in Philadelphia, Pennsylvania in sending out the notice? Is there certain verbiage that I should use in the letter to the tenant since I have never done this before (any sample letters would be a great help!)?

Thanks for the advice everyone! I will be taking all of this into consideration to ensure it does not happen again. 

@Eric Love Thanks for your insights. The lease was was created before I acquired the property and to my knowledge does not have a specific clause or process of how to go about terminating an early lease--it only mentions how to proceed once a leasing agreement has ended. For your option #2, what is the one time money buyout amount? How do you determine that amount? Furthermore, how do you ensure that the tenant will oblige at all? The tenant wants to leave with their deposit in hand--which isn't going to happen. She allowed her two adult children and two grandchildren to occupy the unit with her even though they were never listed on the lease. She also a pet which is strictly against the terms of the lease. I always said that I would never made these issues a big deal as long as she continued to pay rent on time and not be a problematic tenant. Could I request to keep the entire deposit for her violating the lease by having a pet and her family having lived there since July-ish? She told me it would be short term but they were receiving mail there and everything and definitely doesn't look short term. 

Hello @Matt Leavell thanks for that. I do have an inquiry to an attorney and I do expect to hear back by tomorrow. I just wanted to reach on here in the BP forum to see if someone had any quick or additional advice for me. She sent this notice to me on Saturday morning and I did not want to wait two entire days until my attorney was available to respond to her request to leave the property. 

@Kyle Hipp Thanks Kyle. I did take a look at the lease and as far as I know, there is so specific instruction on what to do if tenant or landlord wishes to end lease early. There are only instructions on what to do when lease has ended. So your saying that I can hold her liable for paying rent  because she signed the lease even though it does not have rules for how to handle mid-lease terminations? How would I go about presenting that to her? I would guess via a certified letter of course but I feel like she would just scoff at the whole idea because she is complaining about having to take one gas bill, let alone having to continue to pay rent which is much higher than any gas bill. 

Hello @Account Closed seems like you are new to the site so welcome to BP! I live in Philadelphia as well and I am also looking forward to purchasing additional properties mostly for buy and hold. I already own one home purchased in September. 

The podcasts are a big help. Good luck with your RE investments!

@Troy Sheets Hi Troy, I am based in Philadelphia as well and I would love to know what bank or credit union you have used? I am trying to find a bank to refi a potential second investment property in Phila. I have purchased my first OO home (a duplex) in September. I would be interested in contacting other banks and if you could suggest one, I would appreciate it.

@Account Closed Hello George, I would be interested in a contact with First Trust Bank to see if they could and would possibly meet my refinancing needs. 

@Thurmon Cohen I have a registered LLC but it has only been in business since Oct 2012. My biggest issue right now is to find a bank that will refi me. I need to do more research of course in that regard but I called one bank in particular and they said that I would have to carry 12mos of existing mortgage history prior to doing a refi. I have only had my property for less than 3mos. I am also looking to see if it would just be more convenient to pay for my contractor to get insurance so he can do the fix up on the property for me.

I am looking into an area near the Olney section of the city. I have checked out a few properties in the city but I am looking for a possible property that is in a great area that will definitely appraise well after repairs. I am not looking for a shell of a property necessarily but something that needs enough work. I have heard that properties may not appraise for much if it is done within six months of the original appraisal (appraisals are usually good for six months)--not sure if it's true or not. 

Hello Lorenzo,

I posted a post similar to this a few weeks ago. I am in the process of trying to acquire a second property to do exactly what you have done. I spoke to one particular bank so far and they told me that I would have to have an existing 12 month mortgage paying history in order for them to refi my hard money loan at their bank. I bought my first home in September so I do not yet have 12mos of mortgage history even though I do have good credit history elsewhere with other and different loans. I was also told by that same bank that you may not get appraised for much if you do an appraisal within six months because an appraisal is typically good for six months and the only way that the home will appraise for more money is if the home gets some sort of serious repair such as adding a bedroom or breaking down walls or adding a new bathroom and that regular cosmetic work (paint, floors) would not count. I believe that this varies among the property in question in respect to the neighborhood. If you did your comps correctly, I believe that you can still profit.

However, some banks will not refi you for the entire cost of the new loan (it is usually only a percentage of the new appraised value) but you can double check that. BTW, do you plan on bringing in tenants or re-selling after the refi?

Please let me know how your deal turns out because I am looking for advice to do the same exact thing. Best of luck to you!

I am looking for advice for how to proceed if a tenant wants to terminate a lease midway into the leasing agreement without probable cause to leave. This is for an owner occupied duplex. Tenant in question occupies 1st floor. 

The tenant sends a 48hr notice to landlord saying that they would like to leave the premise and can be out of the house by the 1st of the month (rent is due on the 1st of the month). The tenant wishes to move out because they are having problems with their heating system. The homeowner adopted the lease and tenant at closing in September. Tenant has been occupying unit since May and has a one year lease in place. Upon signing her lease agreement, her then landlord told her not to worry about gas utility and to only pay electric. Since tenant moved in during spring, she never had a reason to utilize gas (stove is electric) until a few weeks ago when cold weather started to set in. The house is heated through gas so there is obviously some sort of source for gas for that unit. Tenant notifies landlord that heating is not working in the bedroom only. Handyman comes in and does some work and says it’s fixed. A few days later, tenant comes back and says that gas still does not work in the unit. Landlord attempts to purchase parts and labor insurance for water and heating tanks for the entire house (two units). While attempting to secure an insurance plan, landlord discovers through gas company rep that no account exists whatsoever for the specified unit therefore was unable to purchase the plan. The gas company further notifies landlord that if the gas company finds out about this, they will come out to the unit and cut off gas immediately because the tenant is utilizing their service without a service agreement or contract in place.

Landlord/homeowner was under the impression that the tenant was paying all utilities with the exception of water. Apparently, this was not the case. Landlord has no idea where the heat source is coming from. Tenant wants to assign blame to landlord because she “did not know” anything about this. Bottom line: landlord tells tenant that if she wants her heating unit fixed, she has to sign up for an actual gas account because if not, the gas company has every right to cut her off for having used it without permission. Landlord believes that previous homeowner lied or misled tenant to believe that she would never have a gas bill when it actually seems like he did something (perhaps illegally, not sure) and gave tenant some sort of hook-up to make it appear that tenant does not have a real gas bill. This was only called into question because tenant is now seeking repairs for one of heaters not working. If she cannot provide proof of an account, gas company will not come fix the issue.

Tenant thinks that landlord is being unfair and thinks landlord wants her to pay more money when in actuality; the landlord is just going by what’s written in the lease and gas company protocol. Tenant does not want to pay “another bill” so is choosing to leave under her own reasons. The landlord cannot be held responsible if tenant did not read carefully before signing previous lease with original landlord or asking the necessary questions.

Now that the tenant wants to leave by Monday, what is the penalty for giving only 48hrs notice? Landlord told tenant that she has to give a 30 day notice in writing if she plans to leave. Tenant still has about 5-6 mos remaining in lease. Landlord is still expecting a rent check from tenant on Dec 1st. I spoke to another homeowner in Philadelphia who mentioned that if a tenant wants to leave without probable cause that puts the landlord at fault that they would have to pay all of the money remaining in the lease (5-6 months worth of rent) because the landlord left the unit in good living condition. Is this proper protocol in the state of Pennsylvania? Has anyone had a similar issue? If this is proper protocol, how does one go about requesting such funds? Landlord has done everything within their power to fix heating issue for tenant but tenant refuses to call gas company. In other words, tenant would rather pay a much higher rent elsewhere than take on one additional bill from gas company. 

I am in the process of getting my second property in Philadelphia. It will be my first via a hard money loan and my second purchase (first purchase was thru FHA loan a few months ago). I just wanted to get thoughts, ideas, and suggestions for getting this property.

The property I am looking at will be a duplex most likely between 20-70k. It will be a fixer upper (not necessarily a shell) that I plan to fix up, and refinance out of the hard money loan, and bring in tenants. I expect to take no more than 90 days to get the property occupied. I would also be able to pocket the difference after the home is refinanced. Most hard money lenders cover rehab costs if you are using a licensed and insured contractor. The contractor that I have used in the past does great work and is a family friend that we have known for years. He is licensed but not insured so a hard money lender may not cover them. I was going to take out 1-2 personal loans (depending on the bank or credit union) to finance the rehab/contractor costs and additional closing and out of pocket expenses and also include a little financial cushion for unexpected financial costs. These loans will be paid back at time of refinancing. 

What do you think of this plan? I know it has a certain level of risk involved but my biggest concern is will I have trouble refinancing with a traditional bank if I have 1-2 personal loans out in addition to the hard money loan? Also, I have a registered LLC which may be what the hard money loan will be under so it does not affect my debt to income.

I welcome any thoughts, ideas, and suggestions!

@Jean Bolger 

Thanks! I will definitely have to try that peppermint trick.