All Forum Posts by: Joe P.

Hi all -- I'm just wondering how folks are finding their deals, whether they be a first purchase or ongoing.

I'm struggling a bit with finding the right deal to snap on. I've made two low-ball offers which were (rightfully) rejected, but I just can't seem to find something in my niche. I can't tell if my criteria is too stringent, if I need to work with a wholesaler to find the right deal, or maybe inventory is low and things are slow right now.

Looking for your guidance and thoughts -- I'm ready to get this going (all systems in place, evaluation criteria set hopefully correctly, pre-approved, cash-ready, et al), but the right deal in my area just hasn't presented itself. I'm working with a realtor in both PA and NJ.

@Christy Miller if you can live essentially rent free and move some of your stuff every 3 months, would you do it? I bet dollars to donuts this person is doing it.

Also, a car is both a terrible and great way to judge someone's income and priorities. Most people opt for an unrealistic car and gigantic car payments, and then need to decide between rent and car payment one month because they're terrible with money. Guess who lost this month.

I drive a 09 Honda Accord. It's full of dings, dents, scratches (I live in South Philly, nothing but street parking), missing a hub cap, and its in "crap gold" color. But I can tell you all my bills are paid at the beginning of the month like clockwork. It's all about priorities and again, this tenant knows exactly what she is doing.

You're learning a lesson, albeit the hard way, but learning none the less. Again, treat this scenario with extreme caution. Here are the steps I am taking:

1. Consulting with a landlord/tenant lawyer, bring up everything and also the fact that the heater is acting up again after just being fixed. That's interesting, you either have a negligent contractor or a tenant causing damages.

2. If you trust the person who is taking care of the heater, ask if there are signs of tampering, damage, etc. If it can be proven, most likely the tenant has willfully violated the lease, and you can begin eviction proceedings much faster (hopefully).

3. The lease is your friend; work with your lawyer to determine what offenses have been made and see if there are breaches. You need something to stick.

I don't know what the laws are like but as I said before, be prepared to dig. in. This person is going to be the bane of your existence for the next 60-90 days until they are evicted. Hope and pray the property isn't destroyed.

Unreal. Well ball is in your court my man - if the terms are not favorable to you, don't do it. You offered this guy more than what he asked for. A bird in hand is worth two in the bush. If no other offers exist for this place he's fishing you for a better deal, and I'd tell him to shove it. Of course, its not my money and not my deal. If the numbers work for you all around then make the move. If his counter has wildly ruined the deal, then walk away.

I just can't believe this seller.

Christy, Christy, Christy...

I fear the worst with this tenant. First month's check bounced, didn't pay for the second. Things break upon notice. She lied on her application, committed fraud (fake credit report), etc. This tenant knows EXACTLY what she is doing.

After hearing some more of this back story, I would advise you to call a landlord-tenant lawyer IMMEDIATELY. I agree a CFK conversation will backfire, I think. Please, do yourself a favor and call a LT lawyer and do not wait another second.

I'd also be prepared for her to totally destroy your house as you lawyer-up. I hate to say it, but this person has preyed on your good nature and will now become your worst nightmare.

Spend the money now to try and avoid a massive problem, but dig those heels in because I think its going to be a long ride.

After seeing what you've said, I invite others to weigh in, but knowing what you've just told me, you've got a professional scam artist in your property and this won't end well. Cover your rear.

I would be courteous, but firm. Now I haven't been here since the beginning of this process and don't know much about the property, the area, the seller, etc. But in my mind, your offer is ABOVE their asking, which means its a more than fair offer. You are buttoned up in terms of financing, DP, conditions/terms, etc., and you've offered more than they've asked you for.

My response: "Thank you for your suggestion; I consider my original offer, terms, and conditions to be more than fair, and counter with the same offer accordingly."

You've made an above asking price offer. The fact that they would respond with anything other than "YES" or "BAFO because of multiple offers" is beyond me.

You gave the seller an inch of rope and now they're trying to strangle you with the whole darn thing -- I would say you are comfortable with the offer you gave at the terms enclosed.

The why is sort of irrelevant, they obviously have something in mind but if you put a property on the market and someone offers you more than asking, as my old English teacher would say, "shut up and take your apples."

Great post, and agreed. It's a math problem. Which has more value to you in the long run?

Yup - you can see if she would be willing to do that. But if you offer CFK, the conditions need to be crystal clear, documents need to be signed, etc. I would give her only a few days (other landlords can weigh in with Best Practice) to move out, clean, sign-off on ending lease mutually, only pay after inspection of property (and utilities, apparently, if you think she's breaking them) is complete and satisfactory. Don't forget about the security deposit as well - you may want to consider a pre-walk through before agreeing to CFK. If something breaks between pre and post walkthrough its far easier to identify the tenant causing the issue.

Tenant screening is important; some folks have suggested some ideas to help. Some of the ones I like:

• Walk though the lease with potential tenants BEFORE they sign, e.g. go to their current residence. You can get a sense of how a person lives and what kind of tenant they may be.
• Ask for previous landlord referrals and CALL THEM ALL. You need to be incredibly careful about the questions you ask by state laws, but confirm the tenancy and any other questions. I would consult local state laws on the questions you can ask. I like to ask an open ended question at the end, e.g. anything you would like to share about this person? Would you consider having them as a tenant again?
• It may be painful, but don't just rent to the first person who passes your background check. I did that because interest in my last property was low and I didn't want to skip another month of income. That tenant ended up costing me a lot more than just one month of rent in the long run.

@Ibn Abney, @Steven McCutcheon, and @Rich O'Neill I appreciate you guys weighing in! I've been only looking at MFR so I may look around. I agree with Ibn that $100 per door may not be enough long term. Steven, I think one of the biggest expenses is oil heat and water on this property. I don't know the split of these but its $2600 per year, so that's a significant expense. I would consider market rents to be in line with this property, so there probably isn't a lot of room. I've yet to inspect so I don't know CAPEX yet, but we shall see. I agree with you Rich on the "stupid offer" idea - honestly there is no harm coming in super low to see if it sticks. The property is for sale for 289,900 and I was thinking of offering 250,000, as the 289,900 price simply doesn't add up for the numbers.

Could be! Still, 12,600 in NOI against 89,5000 invested is 14% COCR.

Here some other thoughts - don't know how a commercial loan works but I will be extremely surprised if you get 5% interest on a loan. I was just quoted yesterday by my mortgage guy at 5.125% with 25% down on a property. Now I don't know much about the business but if you got that rate locked in, good on you.

Vacancy at 8% - ok, fine, standard percentage most people use. But that assumes you have LESS THAN ONE MONTH vacancy. I don't like using all caps, but if your monthly cash flow is 5350 + whatever the duplex brings in, and you've only set aside 428 per month, that amounts to 5,136. If the place is fully rented now the number works, but you may need to increase it once there is tenant turnover. I would bump that up in advance to more conservative number.

Total repair cash in is 2000? What's that buy you, paint and labor? You sure on that number?