All Forum Posts by: Jonathan Holmes

What is your long term strategy with this property? If you at some point are going to turn it into a rental then you will likely need to get your payments lower. If you intend to sell then just build your equity. If you intend to live there forever then the cash out refi might be a good call.

It all depends on your game plan and what your numbers look like. Can you get enough rent to cash flow when you move out? Maybe it is going to appreciate enough that selling in a few years makes the most sense. Figure out what your end game looks like and then do what you need to to get there. 

Unrelated, I hope you are saving the money that would be going to your house payment as that would be my first step towards the next property.

In some states it is acceptable to mail it to there last known address. (your unit) If they went to the post office and filled out a change of address form then the post office will forward it to where their new address is. They probably did not do this. If the letter comes to your unit then you keep it sealed in your records in case they ever try to claim you made no attempt to send it. If you are still with in the thirty day time frame I would wait it out leave a voicemail on their cell etc. Once the thirty days is up change the locks.

It depends on your lease and state law. My lease states that’s the unit has been delivered pest free and after ten days any pests seen are the tenants responsibility to deal with. This is largely based on the idea that any mice, insects or whatever are attracted to something the tenant is doing (leaving out food or crumbs) and therefor after an initial period it’s their problem. Without anything in the lease it should default to your states laws which may say nothing about it or have some very strict guidelines you need to follow. If it was me I might go ahead and have it sprayed. Assuming the cost isn’t ridiculous and it does the job. As far as the conversation goes it depends on whether you are going to deal with it or not. If not I would say “I get those centipedes at my place to. We have terminex come out to take care of it. It’s cost X dollars. Here is their contact info if you decide you want to get it done.”

It appears to not be a deal. Your cash flow is being killed by the expenses. This is why many people look for 1.5% or 2% properties before running a full break down. I am not sure how you came up with your expense numbers but they all look fairly conservative to me and that is exactly what you want. Without knowing where your expense numbers came from and whether or not there is room for increased rents I would say it is not a good deal and move on. 

You may need a real estate license to do this depending on you state law. In Ohio you have to be licensed to manage a property that is not yours. While I see an obvious gray area with you technically leasing the property, if I were you I’d investigate it with an attorney to see how the state would feel about it.

Why do you want to keep it? What is it’s value at the moment? As far as paying the loan down if you are under water on the property you could pay down to the point you can refi it into a break even property or sell it then move on. It is very hard to turn a bad deal in a good deal and you may be in a situation where you’re throwing good money after bad. You seem to have a good income if I were you I would pay it down until I could sell it or sell it immediately then start saving for a good deal. You are young enough that you can easily recover from this so don’t give up!

I for one would say that being a slumlord is never an appropriate goal for anyone who is a moral person. No matter what class the property is you should be providing a clean, safe home in good repair. The difference comes in the finish. Are you doing tile floors in the bathrooms and kitchen or laminate/vinyl? Formica Countertops instead of granite that sort of thing. Generally it is said the lower the class of property the more hands on and better skilled the manager will need to be. If you’re paying for property management in a D class area they need to be specialists. The cash flow on that end of the spectrum will win all day long but you will generally spend more on repairs, evictions and time than on an A class.

Yep anyone over 18 gets the full check and must have their name and signature on the lease. I subtract it from the deposit if I select them as a tenant otherwise I don’t do anything. The big benefit of this system is a good tenant will think they will likely get their money back and a tenant with a bad record will probably not even bother filling it out. Although I did have a lady recently who swore up and down that she was a great tenant and everything would be fine only to have an eviction and two judgements come up. I passed on that one.

This is not a great situation. However, your lease is what counts you should have a section about what appliances are provided. Without this you could run into a situation where a leaving tenant tries to claim your appliances are theirs. With your current situation I think technically since the washer/dryer never worked if you did not advertise a washer dryer or tell them they would have them you don’t have to repair or replace them. Then again you don’t have anywhere in your lease that says they aren’t provided so you couldn’t prove this. So you are in a pickle and this would be dependent on your states laws and a how a judge felt about it if it got that far. That said you need to question why they thought they would have them. If I had this issue I would have removed them and advertised washer/dryer hook ups. It’s reasonable if the tenants saw them they assumed they worked or even if you said they were broken that they would be fixed. With having nothing in the lease and hopefully having the desire to be an ethical person In my opinion you should fix them or replace them.

The owner not on the mortgage will have to sign a document acknowledging the supremacy of the banks lien position. Shouldn’t be that big of a deal.