A lot of that stuff your PM should have charged to the tenant (flushing diapers down the toilet), second replacement of the furnace and if the seller took the AC units-you should have gone after them.
Unit B tenant should have never had their lease renewed. Is the house in an area that attracts low quality tenants or did your PM do a crappy job screening?
And $4K for a home inspection-wow. Is that what they really cost in the US?
No I put the current tenants in and they met 3x income 680+ credit and low credit utilization. Unfortunately not everyone is as they seem on paper nowadays also they came into some bad luck and we worked with them on payment plans. Apparently the guy lost his job and was in a wreck. The other issues were inherited.
Hey all here's an update about a month or so later. We were self managing before as property management is what I do in az. We were able to on board a new pm city place Indianapolis realty. We had to due to my army deployment.... Currently overseas... Sigh..... Long story short our pm has been working to train this tenant and take care of the issues. We just paid to have 8 windows replaced for 2400$ and about 4k in these repairs in my experience these ended up costing way less then thought... Of course because the city is involved. They came back and did a second inspection. One of the windows still under warranty wasn't installed correctly so that'll get covered bc it's under a month since they finished the install. We evicted the tenant that damaged our property and took them to court for 10k in lost revenue and damages so they'll never be able to live a good life... And the inspector also said that one of the walls needs to be replaced from water damage. Apparently my pm wasn't tracking the repair so that has to get redone I've I have informed them I want a deduction from the cost because of what was already paid. So I'm expecting to roll into next year with no more problems and healthy tenants. Expecting next year to be a fat cash flow year with all the capex invested from last two years
Hey Bei,
I dont like to bad mouth the PMs' in Indy but I'm going to warn you about my experiences...
I used PMI first; my experience with them was frustrating. I had a tenant that I tried to pay to leave when I purchased the property because I learned she was the type of person to not pay rent. long story short she didn't want to leave with any form of payment and chose not to pay rent for 6 months. I worked with PMI to try and get them to serve a 10 day notice of nonpayment of rent. they wouldn't send the notice until the 15th of the month. and they charged the landlord 150 just to serve it. I ended up serving the notice myself. Because I ended up doing their job for them I fired them.
T&H Realty; installed a 25sqft closet in a room that already had a closet and neglected to evict a tenant that hadnt paid in 6 months...
BHB; failed to complete maintenance request and ultimately resulted in extreme repairs as a result.
These are very basic explanations of what actually happened but just know it was much much much worse and resulated in about 40k worth of total damages and lost rent..........
ask me in a couple of months how citiplace realty and pm is i'm getting ready to sign a pm agreement with them....
Hey all,
Getting ready to Mob here in the next few days for the next year only to come back and mob with my brigade for another year. expecting to net roughly 120k over the next few years just from the army and roughly 10k from current investments. I plan to come home in 2026 with money, an ideal set for entrepreneurship, an MBA, and a drive to get on active duty from guard. I'm looking for advice on how I should go about growing my portfolio or if I should just wait until I am done with the army forever. I wouldn't mind making it a 30 year career already at 10 so... I also have a 4 plex outside "The Great Place".... and some in Indiana. the total cashflow for the portfolio this year is negative due to capital improvements but rolling into next year and the mob will be cashing 700-1000 a month and currently has 300k in equity of which 200k is accessible via heloc when I get back due to prior 4-year-old bankruptcy. wife is also getting a second job to save a little extra and pay off 30k debts from college and capital improvements. she brings in enough to have it paid off in 6 months currently but doesnt work very much and is starting to get bored and nervous about money and life and needs something to do.
I'm looking to see how other people would grow what they have in my shoes. I feel like the best I could do is flip 2 hold 1, flip 2 hold 1... etc etc... or just dump all the extra money into downpayments on 150k dueplexs and make like 25000 additional income in rents a year which doesnt really seem worth the return to me....
My goal is to come home and either focus on my military career and try and make ltc in the next 10 ish years while investing in real estate or gtfo and quite my civilian job and figure out real estate full time.
best,
Marc Globensky
hands down yes!!! if you dont want lmk ill take this deal RN!!!!
From experience just because a tenant has great credit doesn't make them a great tenant for you. Sounds like this person is a realtor/property manager for commercial real estate and down on business right now. I wouldn't rent to them simply because of the lack of K-1 and paystubs as well as their drama from familial issues they're dealing with right now. you can always use 90 days bank statements in leu of this and count the deposits as gross income to qualify or use the net income to qualify the tenant. If someone is self-employed its typical to ask for 2 years tax returns in their full documented filed state and 90 days bank statements showing deposits to qualify their income. if her net is well below her gain, she won't pay rent. that said they could be trying to use the teacher to pay bills by himself so keep that in mind.
to answer your questions up above.
1) everyone living in the home above 18 gets an application.
2) I use the whole home to meet the 2-3x income requirement.
3) short answer if debt exceeds income no don't rent to them, they won't pay rent. you can decline them for bad credit and not meeting 3x income requirement if monthly debt exceeds monthly income. You can hedge your bets by charging them higher security deposits too. you can charge them 1 month rent security deposit and 1 month rent new move in fee non refundable or something. note Delaware law states the most you can charge for security deposit is 1 month rent. this doesnt mean you cant charge first month rent in addition to this and other admin fees.
Hey Bei,
I dont like to bad mouth the PMs' in Indy but I'm going to warn you about my experiences...
I used PMI first; my experience with them was frustrating. I had a tenant that I tried to pay to leave when I purchased the property because I learned she was the type of person to not pay rent. long story short she didn't want to leave with any form of payment and chose not to pay rent for 6 months. I worked with PMI to try and get them to serve a 10 day notice of nonpayment of rent. they wouldn't send the notice until the 15th of the month. and they charged the landlord 150 just to serve it. I ended up serving the notice myself. Because I ended up doing their job for them I fired them.
T&H Realty; installed a 25sqft closet in a room that already had a closet and neglected to evict a tenant that hadnt paid in 6 months...
BHB; failed to complete maintenance request and ultimately resulted in extreme repairs as a result.
These are very basic explanations of what actually happened but just know it was much much much worse and resulated in about 40k worth of total damages and lost rent..........
ask me in a couple of months how citiplace realty and pm is i'm getting ready to sign a pm agreement with them....
Would 100% recommend citiplace realty as a PM. they've been affordable on maintenance and solved a bunch of problems. they also serve notices and following legal preceding's with evictions. and only charge 60 a door a month for rent and 500 for new leases idk what renewals are but its less than 200 per renewal will 100% recommend.
Hey all,
im an investor located geographically in AZ. I'm looking to expand my business from central Texas, and Indiana to OH. I don't live in this area nor do I have an interest in moving out there bc I still have my full time w2........ Unfortunately...... I'm looking to network with flippers and other investors out here interested in borrowing seconds that are looking to use my credit cards and loans to help me pick my business up and expand into this market.... Please hit me up. I'd love to help someone else's business grow while breaking into this market. I'd even be down for value add apartments... Honestly that's my dream any way... To build sustainable mixed use space made out of context.
Best Marc Globensky
before you go through with this check the city state and county local codes. Tempe AZ prohibits the use of SFH's to be used to rent out per bedroom.
Yes, we did pay 4k for an inspection prior to close and none of this stuff came up.... Here's a list that totaled to this year alone being 35K and growing worth of repairs:
1) Replaced both furnaces from tenant damages 2 times. WHAT kind of damage? Very hard to believe. Our pm took pictures and inspections with documentation of all mechanical equipment prior to move in and the hvac contractor provided us with detailed proof and documentation that the tenant had clearly damaged the furnaces.
2) Replaced stolen AC units from previous seller stealing them. If the seller stole them, did you make police report, or otherwise hold them accountable? Were they removed prior to closing, or after? If after, your insurance should have covered. It occurred after the sell and luckily our insurance covered it still doesn't negate the time and headache plus deductible to cover this repair.
3) Repaired duct work in multiple locations from previous owner improper installation plus wear and tear. What, exactly, is "wear and tear" on ductwork? Old age and improper use of hvac system without filters. the tenant failed to replace the filters and notify us of the deficiency. Additionally, the tenant started a fire with the furnace and burnt a portion of the duct.
3) During covid I went through 3 property managers because they refused to evict a tenant that ultimately didn't pay rent for 6 months and cost us over 10k in unit turns. It looks like Phoenix had an eviction moratorium during the covid period. Is that why they "refused" to evict? No all states had an eviction moratorium up until August 2022 when it was found unconstitutional. It's also important to note that the moratorium didn't negate a tenant's obligation from rent it simply stated they were required to make up their missed rents in the form of a promise to pay agreement and if the tenant failed to make partial payments to rent the landlord held the right to contest the court's decision and evict the tenant. the moratorium also required a 30 day nonpayment notice as opposed to the 10 day requirement in Indiana (which by the way isn't required if your lease states otherwise. You can evict a tenant on the 2nd of the month if they miss payment.). The PM served 30 day notices 4 months in a row and failed to contest the tenants lack of partial payment. Additionally, the tenant never provided a moratorium notice to the landlord which was a requirement to exempt from eviction. the Tenant was also deemed ineligible for rental payment assistance by the state gov because it was clear they "simply didn't feel like paying rent". or at least that's what the city official put verbatim in their report for declining the request.
Part of this was why I went through 1 of the 3 property managers. They decided to make a 5X5 box for a closet in one of the bedrooms instead of knocking a wall out and closing the other sides sliding door that was originally the closet. Were these "improvements" not discussed with you prior to execution? If not, I would not have paid for them...but what does your Management Agreement state about repairs and improvements? the management agreement stated work over a curtain dollar amount of 500.00 in repairs was to be approved by the landlord. we did not approve the repair and were threatened with court if we didn't pay them for the labor. in fact, I wrote them an email and specifically told them
4) B unit panel was damaged by someone likely the tenant and has wires dangling out and now we have to replace and update it. "likely the Tenant", based on what? Wires "dangling out" should have been pretty apparent during any inspection. If you are being required to replace it, then clearly it was improperly rated and/or there are multiple other issues that are not repairable. This does not happen overnight...it should have been discovered during your due diligence and inspections. Correct this is why the electrician informed us the tenant had caused the damages. prior to purchasing the property we paid for an fha approved inspection and the panel was document and reviewed by us, the realtor, a gc, and the pm and no deficiencies, wires, or issues were noted at the time of purchase otherwise we wouldn't have been able to purchase the property as i'm sure your aware on FHA loans, you cannot purchase a home with code violations with and fha loan. it was also personally inspected by me before the tenant moved in and it wasn't like that when I looked at it in September of 2022, which was 5 days before the tenant moved in, which leaves only one party to have altered it... the tenant.
5) A unit didn't have the right switches and amp levels, so a panel upgrade was completed to support the newer AC system that was installed. With #4 above, sounds like an upgrade was necessary, has nothing to do with Tenant, everything to do with a proper inspection prior to purchase. wasn't blaming the tenant on this one I agree it needed to be done just simply complaining... Unit A was an older panel compared to unit B as unit B was an addition to the home.
6) B unit flushed their childs diapers down the toilet and clogged the unit up and we ended up having to spend 6k on having a plumber come in exuviate and reinstall a new sewer cleanout. Highly suspicious and excessive charge. There must be more to the story. Did you have a camera run through the line prior to excavating? Where was the cleanout installed, and how far is that from city main connection? the cost was high simply due to the fact that the plumber rented a tractor did the work overnight and then pulled the permits. We rushed to get this completed because the two units share the same city hookup, and we didn't want to affect another tenant because one tenant thought it a great idea to clog their toilet with diapers. monster homes suck. Additionally, the sewer cleanout was damaged and needed to be replaced regardless we just didn't know until they caused the reason to need it.
7) Replaced every toilet due to damages/wear and tear and had multiple roof leaks from upper unit to lower unit. I think you are confusing normal aging with "wear and tear". Old toilets need to be replaced, and should have been obvious at inspection. They also commonly start leaking at the wax ring, and show up as leaks to the ceiling below. (I am assuming you meant ceiling leak in lower unit, NOT actual roof leak from above the upper unit, leaking all the way to lower unit, since you were speaking about toilet issues.) Unfortunately, these toilets were only 3 years old as evidence from previous owners receipts for replacement. and yes wax seals do deteriorate however I did mean wear and tear. it was evident that damage was caused by someone. toilets don't get old in 3 years unless they're damaged. at least in my experience. and no I meant the toilet in the upstairs until leaked into the lower unit because the lower unit ripped out the drywall and broke a pipe thus causing more damages to the piping.
8) Due to the leak ended up having sewage remediation company come out and rip out drywall, carpet, faming, and plumbing. Yes, that is a "blank check" situation and very costly. Your insurance should have covered if it was worth making the claim. luckily, they did still doesn't negate the increase in deductible and 1000 deductible made out to the contractor. also complaining about this to its not always about money sometimes its about the time and energy invested that make it difficult. it's also important to note the insurance company would only pay for the repairs to get it put together not the bill to replace the damaged piping or toilet leaking. so we paid to have ripped up and replaced the plumbing while the insurance company paid for the carpet remediation and drywall damages. still came out of pocket for roughly 50% of the total cost.
9) Due to the toilets and sewage am still currently working on replacing the carpet which was brand new due to the unit turn... Who handled the turn? They should have noted the condition of the toilet(s), performed proper maintenance or replacement, and avoided a LOT of damage and headache. the previous pm which is why they were fired.
10) The tenant in unit B cut holes in the walls of the exterior of the home WHY? And why would you not immediately initiate non-renewal/eviction for doing so? we are dealing with all this stuff now. you cant expect to go to court without evidence. we just obtained pictures and proof yesterday from the pest control vendor from when the vendor caught them recutting the holes. we served them the notice this morning.
and because they leave food out in their kitchen, we now have rats in our walls and a random racoon. Pigs. Why would you not immediately initiate non-renewal/eviction for doing so? yuppers
The rats and racoon issue were as simple as repatching the holes the tenant cut out for them with one-way doors and bate traps. Obviously, there are continues efforts to make sure they don't come back but 6k later the issue was told to us to have been resolved by the licensed contractor... 6K for what work? Repairing the holes? Crazy high cost if so. Yeah thats what had me flabber gasted too. we obtained four quotes and all were in line and damn near the same thing. the cost to remedy this issue stemmed from the amount of holes and rates and the racoon plus baiting. additionally, 50% of the cost is continuous visits to the site for continuous remediation needed to ensure they don't come back.
11) Due to the issues the tenant is experiencing with all the random repairs and constant contractor visits he wanted to break his lease. Unfortunately, the IAR lease we used doesn't have an early termination clause instead it states that should they terminate their lease they are liable for the entire lease duration. Which is over 16k, so I told them if they just gave me a move out date, I would keep their security deposit and call it even... I also informed him that any damages done to his personal belongings are to be covered by him and his insurance as that is what renters' insurance is for and is specifically referenced by an example just like this one in the renter's insurance lease addendum. You are a glutton for punishment...I can't wait to hear how much more they cost you to actually get rentable again. ill let you know.
Apparently, they didn't like that and filed a complaint with the Department of Health. What they don't know is what this process typically looks like... The DOH won't come in and condemn the property or break their lease unless it's a serious issue. I've dealt with them in the past in Phoenix. What does happen though is the DOH will come in and inspect a bunch and every time they come in and inspect, they find a new bs issue to repair. The issues they gave us weren't that bad either they want us to reinstall the carpet, fix a door the tenant punched a hole through, replace their screen door or remove it, fix a couple of windows that the tenant glued shut, and replace drywall that was completed during the repairs from the toilet leaks (when the DOH inspected the property it wasn't finished yet). Does not sound like a BS list. Sorry I forgot the panel and rats but those have already been dealt with... but yeah it is bs I have a feeling the tenant called to complain about how long the insurance CO was taking to get the massive issues repaired and the fact that they had numerus problems the tenant caused and decided to blame us the landlords in an attempt to break their lease. the DOH is just doing their job I will tell you though we got on the phone with them this morning and they gave us 22 days to fix a rat infestation and the other issues and asked that we replace all of the windows the tenant damaged. the DOH was pretty rude when we asked for a reasonable extension to remedy the issue. makes me think this is going to be a pain in the butt.
If anything, the tenant just pissed me off because they could have brought the issue to me or moved out. Their security deposit is 700 dollars. It's not worth all the drama. I also plan on serving a ten-day notice for all the damages he's caused now. At first, I was going to let it go, but now FUUUUUdge that. Indiana is a weird state though you can't take a tenant to eviction and get the judgement for nonpayment of rent or damages while in eviction court... You have to take them to small claims court and get a judgment. So basically, I'm going to serve him a ten-day notice for the damages for repayment and if he doesn't repair, I'm going to take him to small claims court. either that or he forfeits his security deposit and move tf out.
Also his lease stipulates specifically that the windows are supposed to be able to open and if glued shut or otherwise damaged he is required to pay for the repairs. Curious, were they glued shut to keep the bugs out, or the outside air? Or was this a "security" measure? bugs its a nice neighborhood.
My wife and I have gone above and beyond for this tenant on the repairs and have handled waaaaayyyy more maintenance requests then what's listed here too. I understand his perspective, but he signed a contract. And as a LL, you are required to provide a unit that meets minimum habitability standards per local laws. It does not sound like that is the case. You need to greatly improve either your rental preps, or your Tenant screening, or both to avoid a repeat of this. Invoke the "happy" clause early, instead of dealing with ongoing aggravation. There are far more Good Tenants, than Bad, but to attract the Good ones, you need to have a quality product for the Tenant pool you are targeting. This means functional, secure, clean, and hazard free.
I would also take a closer look at your choice of vendors, as some may be unnecessarily be upselling you, or just overcharging. I'd be curious to see a link to the report for the 4K inspection, too. the biggest reason is we use name brand vendors such as pertemen brothers because of their reputation. they are known to be on the more expensive side but we switched to them on purpose when I saw a pattern with the tenants activity and communication style I thought it best to pay the premium for proper craftsmanship and reputation rather than deal with legal back lash should that come. we are getting ready to onboard a pm because I will be likely deploying in 18 days and wont be able to attend to this issue over seas.