All Forum Posts by: Lauren H.

Check your lease. Check your local laws. I know what my lease says and I know it complies with local law. If you can rewrite the lease to further protect yourself from this situation in the future while complying with local law, you should do it and consider this a learning experience.

What is your ROI? Is there a replacement property in the area with similar ROI and no headaches? I have to play Devils Advocate because of a deal that my husband and I just did which nets 28% cash on cash after remodel. My "I want to walk" point was when the appraisal came in too low in addition to problems with the building (most problems can be repaired- not much scares me). I kept running the numbers and numbers don't lie, so we bought it anyway.

So much of this game is how you handle your emotions. I got emotional over my last deal, but it's going to turn out to be awesome after stabilization. Justin already said it above, dealing with unpleasantness is a great way to create equity.

I was just in Michigan a couple weekends ago and quite enjoyed that part of the country. As with all areas, people shouldn't be allowed to own real estate if they aren't going to take care of it! 

Cardone with a little Ramsey good sense mixed in. 

Ramsey would flip over how much consumer debt we are carrying, but it's more beneficial in the short run and the long run to buy property rather than pay off debt. As with anything, run the numbers and see where paying off consumer debt will get you in terms of savings per month. For me, I'm going to keep increasing my income until paying off the debt gets in the way. 

Listening to Cardone gets me psyched to keep putting in energy to real estate and my W-2 job at the same time. He also attacks limiting beliefs. I'm a lot more Cardone than Ramsey. 

Very good advice throughout this forum. 

With 5 years experience in landlording at various levels I have become jaded and never assume that anyone will be a good tenant. During the screening process I think of myself as trying to find a reason NOT to lease to this person/people. If I can't find anything, then I move forward. Tenants have to earn my trust by paying on time and following the rules. At the same time, I earn their trust by following up on maintenance items in a professional and timely manner. 

Another tactic that can be used to push out a bad tenant is Notice of Increase in Rent. If you don't want this person in your unit, find the legal way in your state to give notice in a timely manner and raise the rent directly to market rate, or maybe slightly above market rate. There has to be a rental rate at which you would be willing to deal with her! Ask yourself what dollar amount that is and do the market research to see if it is anywhere close to a competitive market rate. Decide what a healthy rental rate for her would be and serve the Notice.

I can't give legal advice, blah, blah, blah, you get the idea. 

If they moved out what would it rent for? I like to research fair market value in my area, then increase rent close enough to fair market value to get my value, but not so much that the tenant is likely to move. For example, the range of similar properties in my area is $750-$1050. The vast majority of units in similar buildings with similar layouts are renting right at $825 per month. I raised rent to $800 per month from $650. You have to remember that this is business. If the tenant decides to move out when you raise rent, you will just price the unit to get someone in there quickly. A large increase in rent can be tough for a tenant, but you have to think about it like this: if the rent was already market rate and the tenant said they couldn't afford it, would you let them stay at a lower rate? If not, then why wouldn't you raise rent? 

CAPEX should be based on the particular needs of a property and expected life cycle of items on that property. For example, one 4plex I have is on a flat lot, has a newer roof and crawl space access to all the plumbing.

Our other one is on a slab, has a 6 foot x 40 foot permitted retaining wall, sits in a steep hill and has two sets of outdoor staircases leading to the upper units. 

Both properties have paved parking and newer roof and were built within a year of each other, but they have vastly different CAPEX needs based on the actual property.

All these things should factor into numbers at purchase for buy and hold.

Based on our goals we aim for about a 2:1 income to expense ratio. In theory, I could make as little as $100 per door if my total expenses (not including CAPEX) were only $50 per month. In reality, the market has been good here in Colorado and we are getting from 2.5-3:1 on our two fourplexes. Having large margins will help us one day weather a storm of vacancy or lower rental rates.

I've got a 4unit in Colorado Springs that I can let you take off my hands. There is no reason for me to sell except to pull equity and expand the business. 

It grosses 3025/month. 

Owner pays trash 25/month and water averaging 175/month. Tenants pay all other utilities. All rents are current with only 2 late payments over the last year. With the market the way it is out here the building could gross 3400 per month with some small changes. 

$450,000 ask

It's not on the market yet. 

I would be interested to see what your vacancy rates are for the next year or two. 

With what it takes to get going out in Colorado I could out-right buy about 16 doors in Cleveland! 

Have you found a bank that will do a HELOC on that property yet? Since that's my strategy going forward out here I would want to know that HELOC is an option.

I can't give legal advice, but every time I have something come up, it goes into my lease. A tenant destroyed a garbage disposal with a shot glass- the next thing in my lease was tenant payment for repairs not coming out of security deposit and specific terms for hourly labor charges. 

Next, I had a tenant leave my unit filthy including grease all over the oven which took an hour of serious scrubbing. I made sure that there was a clause for move-out cleaning being paid at an hourly rate on top of costs for cleaning products. 

At the moment, I have some noisy neighbors (I'm house hacking a 4-unit condo-style building). After that, I specifically wrote into my lease that if your neighbor can hear you and asks you to be quiet, you are required to comply! A series of complaints gets the tenant kicked out. 

It may seem strict, but we are covering costs associated with what tenants leave behind. Bed bugs could get pretty costly. A while back I heard a news story about an apartment complex in a neighboring city getting condemned by the city for a bug problem! Granted, the owner was a total slumlord and refused to repair anything, but I'm confident that a large part of the issue with the bugs was caused by the tenants themselves. 

I'm all for putting it in the lease!