All Forum Posts by: Lauren H.

Is this a residence that is being used as a business? If the tenant is violating zoning law then you might have an easy and justified way out.

It doesn't matter how the tenant is doing it, if they are devaluing your property they are a liability even if they continue to pay rent. If you aren't comfortable with your situation, be the owner and step up and change it. No one can make a better financial decision for you than you can, so whatever you decide, be firm and confident in your decision.

You're probably right, given that this tenant is inherited. I've only had about a 50% retention rate of inherited tenants. The other 50% were bad eggs. 

Do both! Take a Notice with you, accept rent in whatever amount they owe, then fill out the Notice to reflect that partial payment. Of course you should consult with the procedure in your state, but that is what we do. If you are friendly and understanding in your dealings with them, but still give them the notice you start the clock for eviction and give them the chance to make it right at the same time. 

Being super, super polite and maintaining a level tone of voice and normal inflection when you talk to them will convey that you are a reasonable person. Giving the notice conveys the message that you won't be taken advantage of and that you are a businessman. Whatever you do, don't loose your cool  in front of the tenant. 

My husband and I house-hacked our first 2 fourplexes to get more flexible lending. 25% down on the first, 20% down on the second. One year management experience was required to get the funding (but that was 2013). We squeaked by on this by moving out of our primary and into a tiny apartment to save tons of cash for the down payment. When we made that decision we didn't actually know that was what we needed to do in terms of the requirement for management experience, it just worked out! 

I say go for it. You need to learn somehow. You can only have so many MTGs, so you might as well make your return per loan as good as you can get. 

Good luck! 

What do the neighbors have? If neighboring SFRs have pools then you might need one in order to compete for both phases of your plan on this deal. 

Have you run ROI for both scenarios?

Consider not being able to predict maintenance costs for the 2 year rental period. Try to predict the cost and factor it into ROI, but aim on the high side just in case. Mitigate during the rental phase by having the tenant pay for regular pool maintenance, otherwise up the rent slightly in order to cover it.

price drop. 

No offer will be found offensive! We are just doing business here!

Abide by local laws regarding rental rates and notice for rate increases- and raise the rent to the maximum legally allowable rent in your area. If they don't pay, evict. My favorite lease clause for the lease I use says "rent may be increased at any time for any reason at the discretion of management." To the best of my knowledge there is no law in Colorado that precludes me from writing a lease that way and my tenants know they should read the lease prior to signing. 

If you are middle class in America and you depend on W2 income for a living, the chips are stacked against you.

1. Why are Americans who work for a living taxed more than investors who live off of their investments?

Why haven't you moved to one of 7 states that has no state income tax? Wouldn't someone in this situation be motivated to learn how to maximize tax deductions and lower earned income for tax purposes? 

2. Why is the average return that you're able to generate in public mutual funds less than 5% annually (arguably less, much less) with high fees and how can you generate real wealth by investing in these funds? You won't.

Why are you investing in a low-return area where laws control when and how much of your money you have access to? Not being educated is the individual's fault. This country needs to take personal responsibility for individual decisions. 

3. Why do SEC regulations that "protect" the middle class also prevent them and allow only "accredited investors" (aka rich people) the ability to invest in private investment opportunities?

Define "rich." Commonly the minimum investment into the highest-performing funds is 10k. Are you saying that 10k cash on had makes one rich? This is an ill-defined statement based on an assumed target for wealth. Think about it 

Full disclosure: through these opportunities, you may lose money, but you also may generate significant above market returns. There are also opportunities that are able to generate above market returns, but manage risks/downside effectively. The reality is, investing in private investment opportunities is how a large percentage of the rich get rich and stay rich. I know wealthy investors who are able to generate 20-30% returns annually. The SEC has effectively taken your investment rights away in the guise of "protecting you".

U. S. tax policy and securities regulation make it very difficult for the middle class to save and grow wealth. These policies help the rich get richer and the poor stay poor.

I disagree. Our culture of having things now instead of delaying gratification and working toward something when we can afford it has crippled our people. We end up paying more for things we want that we can finance just because a smarter person decided to lend us the money to buy said things. The poor stay poor because they make poor choices when actually they have better access to education than middle class people do. If you fall below the W2 income limit, you get free money to go to college. If the right path for the person is college, then why can't they make that happen? 

Though difficult, wealth development is not impossible. By understanding the policies and regulation, starting where you are now, you can develop wealth. Yes. 

Again, "it's just a game, love." Know the rules, then develop a strategy. The majority of this country buys in to the idea that you should work the rest of your life so you can live like a rockstar now. Making a decent living in this country puts you in the top 1% of wealth globally. You could be walking barefoot to fetch dirty water in Africa. I'd say we have it pretty good. 

I don't let tenants decide my policies and procedures for me. If what you are asking is common to your area, stick to it. If you decided on that amount of deposit and monthly rent for another reason, stick to it. 

In my opinion, I am safer when discounting the first month's rent and holding a higher deposit, but that's just me. 

As for the tenant being high maintenance, that will always be a problem. In my opinion high-maintenance tenants should be property owners themselves. They definitely don't need to rent from me. 

In a nutshell, you run your business, not your tenants. The other side of the coin is that if you have found ideal tenants you should provide excellent customer service as a way of keeping them in place and just doing good business. 

My first-ever tenant was about the same as these folks. He always paid on time, didn't destroy anything, left the place spotless, but when it came time to do showings he put up a fuss. My lease even has a clause that states that I am allowed to show the property with reasonable notification to the current tenant. 

I would deal with this by staying firm on doing showings, but communicating what you are going to do in a very respectful manner. To sweeten the deal, maybe send them out to lunch (paid by you) to a mid-range restaurant while you conduct showings. I've never smoothed over tough situations better than offering free food for broken appliances or a couple nights in a hotel while having to do drywall repair.