All Forum Posts by: Jay Flaggs

Coming to this post a bit late. None of the comments I've read seem to address the solution that seems quite obvious to me....

It sounds like you have a bunch of equity, negative cashflow, and a big headache from all the rentals. If your goal is just to replace a good part of your W-2 income, then why not rotate that pile of equity into a CASH DEAL. Of course your tradeoff is leverage, ROI, and tax write-offs; but again, if your goal is just to replace your current income it seems like a no-brainer to me. Especially if you lack the skills or time to do value-add deals or find better priced off market deals.

I think so many people discount the *psychological effect* of financial independence. Cashflow can allow you to establish a new baseline for how you make money from working. What I mean by that is, take some time off from working, live your life on your own terms for a while; and then when you become bored with golf, beaches, and hiking all day you can start looking into a new (less stressful) career. Perhaps that means pursuing art, consulting, teaching, etc. 

Whatever it is, removing the stress of making ends meet can open up doors that may even be more profitable and/or rewarding than your W-2 was.  

Quote from @Michael Plaks:

@James E.

@Clive Smith

I's a risky route. Just because some fellow investor includes it on her or his log, does not mean it flies - unless this investor was audited and won. Otherwise, you will likely be copying someone else's false expectations.

I have reviewed hundreds of such self-constructed logs, and most of them will not hold water. These logs regularly end up in the Tax Court and are usually destroyed upon review. Here's one recent example: https://www.currentfederaltaxd...

Do you want to imitate such logs? If not, then consider consulting a good tax pro.

Interesting case. It seems like the court was quite aggressive on some of those notes. Overseeing tradesmen while they work on your properties sounds like material participation to me. The claims of 1hr to collect rent, produce receipts, and deposit checks also seems like a reasonable claim if done physically and not electronically. Good to know how the court can scrutinize these claims though.

I think a good solution is a smart door lock with a temporary code feature. That way, you can have a repair tech come in with a remote code, do his work, and not have access after finishing. When I find a good product I'll post it here. 

Quote from @Michael Smythe:

Many tenants think renting a house is like staying in a hotel and expect everything to be handled for them.

Others will push as mush on you as you will let them.

You need to better establish boundaries to avoid this. 

What does your lease state about repairs and tenant involvement?

We only go for emergencies ("blood or flood").

This is so true and is something I need to improve on. Renting a house is not a hands off deal like an apartment or hotel. I'll have to come up with a way to clearly articulate that for new tenants. The lease agreement is a standard California lease...I think it's time to beef it up a bit.

Quote from @Joe Norman:

I'm only meeting contractors at units we manage in very rare instances. I tell the tenants they can be home if they want to let the contractor in, otherwise the contractor will be given lockbox access. The lease does (or at least should) give you the right to access the home with reasonable notice.

This is a good solution. So you always have a lockbox and key at your properties or do you swing by and drop off the lockbox and then pick it back up later?

This seems great for tenants that can't seem to show up for repairs for one reason or another. I will look into this one! 

Quote from @Michael Brattelli:

@Jay Flaggs another option is to just give them the number to the service provider and tell them to schedule it. However make sure you’re in contact with the contractor or whoever and let them know they’re not on call for your tenant whenever and everything needs to be approved through you first.

Thanks for your response! Yes, they have the contact information (it's under warranty so all that's needed is to go online and make an appointment). Right now they are refusing to schedule anything to fix the dryer and insisting that I hire a property manager to handle everything because they can't handle it. 

I don't think they realize that property managers are NOT personal assistants and will not do this work for them either. Otherwise, they are good tenants who pay on time. 

Hello BP, 

I self manage a couple properties and I often get tenants who expect me to schedule appointments for repairs and/or be present for such repairs when they cannot be there. These are usually non-emergency repairs on appliances. I usually try to help as much as I can, but I'm noticing that I spend a ton of time doing this. Some examples include: Brand new dishwasher dripping, brand new dryer not heating, bathroom sink clogged with hair, front door handle loose, etc. Part of this is okay with me because I can choose a reputable company to go out and fix issues, but the other side of it is that I feel like the tenant should be available to coordinate with that repair company and be there to let them in. 

Please don't push property management as the solution. I hired a PM at one point and was totally unsatisfied with their service. What I took away from that experience is just how little effort some management companies put into their properties. They were basically just a middleman between the tenant and my wallet -- which is something I can achieve with with online PM software.

So my question is should I continue scheduling appointments for my tenants? If there is a line to be drawn, at what point can I expect them to schedule their own repair appointments? 

@Austin F. Nice! Thanks for the specificity. Did you go through an attorney or REIA as @Joe Martella suggested? 

Quote from @Steve K.:

@Johnathan Flaggs what Joe said. Also, did you say your tenant is a lawyer?! Might want to screen better ;)

 Haha that could get me in trouble! =) 

@Max Gradowitz thanks for your response. Definitely considering a PM company when I can afford it each month. For now, I just have to ask questions to figure things out for myself. As a new landlord, I'll inevitably ask questions that more experienced landlords would find silly or obvious. 

To answer your questions (not sure if they're rhetorical or not):

Wood flooring - Some wood floors need to be refinished every few years depending on use. 

Grill - About 70% of the properties I've seen have a built in grill if not a full outdoor kitchen. Maybe it's more popular in my area. 

Water heater -  It might be a real question for a tenant who has never rented a house and doesn't know what to expect. Why leave it ambiguous when I can just throw it in the lease agreement along with the not so obvious things? When it comes to money I don't think anything should be left ambiguous, so I don't think this question should be discouraged or put down. I hope it's helpful for someone else who stumbles across this post later on.