All Forum Posts by: Victor Saumarez

According to data produced by RealtyTrac areas within Michigan, Georgia, Mississippi, Maryland, Kansas, Florida, Pennsylvania may provide greater yields. 

Joel, this was a yield chasing gamble, and I did spread my bets. I bought several other properties, and not just in the US. What I hadn't anticipated was that all US investments would go bad so quickly. I looked at three different markets, which had different RE characteristics, which I hoped would compliment each other. My non-US based properties are in more traditional rental markets. That's not to say there won't be problems. The only problem free tenants I ever had were ones living under the same roof. I thought I did my homework, and have had rental income properties before, but never quite experienced such a string of problems occurring together.

Thanks to everyone who has participated and offered great advise. There are lessons here, and I like to think one of them might be the 'best laid plans of mice and men'.

Marie, you are very accurate in all your say. I am throwing good money after bad, as much as it pains me. If I sell this property, I will still need to put it into good condition, and it won't be cost effective for me to stay in Charlotte waiting for that to be done. The broader picture is what do you do with the cash if you liquidate? Buy another turnkey, or put it in bonds and hope BB warns us all know before rates go up. I like to think some people are honest, and the new PM I have engaged has been helpful so far. I went through a ton of questions with the old PM, and did background checks, visited their operation and liked them. They seemed genuine, if a little young. I think what goes wrong is operations like this bite off more than they can chew and slide into a downward spiral, and then try to protect their own margins. I didn't manage them enough, and that is my failing.

Bill, I have PM'd you. From the poor responses from the property manager, I'd say they didn't hold up their end ...by a long shot. I know what you mean about managing managers. My feeling is that this is a young business that is struggling with having taken on the beast which is RE. I think the missing link here is that a tenant was put in just before we closed, as the homes are supposed to be sold turn key and tenanted. That would explain why I heard nothing. OTH wouldn't section 8 want to know about change of ownership? Another problem I see, is if repairs are as a result of tenant abuse, which then becomes a dispute between tenant and property manager. How is that resolved? This might explain why nothing was done. It still doesn't explain why I wasn't kept in the loop.

Bryan, I have PM'd you. What you say makes perfect sense, but what is puzzling is that I never knew this was a section 8 tenant. Since this was turn key, the PM possibly put in the tenant just before we exchanged contracts. I have the lease and even tried contacting the tenant. Unfortunately, although I have cover for lost rent, malicious mischief by tenant is an exception. The A/C was stolen and I am trying to claim for that. It's not clear that the tenant was a vandal, but they left a mess. The bath and shower look filthy, junk outside, carpets very unsightly. It may be we clean some of this. Anyway, from what you explained, which seems very feasible, it looks like PM is to be held accountable.

Bill, thanks for the offer of help with section 8. I'm puzzled. If section 8 is so great and so well regulated how did it go so pear-shaped for me? If they are supposed to pay landlords direct, why didn't they question this, and why didn't inspections forewarn of what was to come? If the property didn't stay compliant, what happens? Am happy to contact you, but thought this might be useful to others in a similar predicament.

Solid advise John and I'd be there now if I didn't live so far away (Hawaii). I've sent an email to the Charlotte Housing Authority, and will call them tomorrow. Perhaps they can shed some light on things. I will sell in a year or two if things have turned around a little more.

Uwe, yes the new property manager sent photos of most of the issues, and I think they are items that have accumulated over time. It may be that there were inspections, but I never got to hear about them. I was a bit surprised I wasn't asked if a section 8 tenant was OK, as I know some landlords won't touch them. I've asked the PM for all these details, and I can't understand why this information is being withheld. If you are in the business of managing properties, this kind of a situation should be a priority. I have no idea when the tenant vacated, or whether rent was still being paid, whether there is a security deposit to help cover the repairs. Nada! From what you and Joel say, it looks like I should contact section 8 directly myself.

Joel, and thanks for the reply. The property is in Charlotte, NC. The new PM says section 8 situations can a problem. I certainly had no contact with section 8 personnel and was paid by the property manager. In fact, I wasn't even aware the tenant was section 8. From what you say, a section 8 is carefully regulated but in this instance it seems it wasn't. When nobody will tell you what happened that is an even bigger problem.

I bought a property two years ago in NC through a turnkey investment operation. They buy, rehab, and sell with tenant in place and then manage the property. Everything went well until September last year, when the rent stopped. It took several calls and emails to get the property manager to respond, which was in December. I sacked them and through a new property manager found out the home was rented to a section 8 tenant and is in a mess. The old property manager has agreed to help with the clearing up but hasn't answered any of my questions as to what happened. They have been so slow at helping, I've had to ask the new property manager to send in his team. I don't know if there is a security deposit, whether any rent is owing to me, and who ultimately is responsible for this. It seems to me the property manager is at least in breach of contract for failing to make every effort to lease the property. If I just let things go, I'm going to be out of pocket as the carpets need replacing, the stove and fridge need to be replaced, the tub and shower might need replacing, and a host of other things, not to mention the rent I'm losing. The difficulty is the property manager avoids answering questions, and just procrastinates. I've been in touch with an attorney who deals in RE, and asked if I have a case for a claim to recover any losses, and am still waiting to hear back. This looks like my only option, but I have no idea whether this is just a small claims issue, or could end up being a legal battle in order to get compensation, and whether that is going to be prohibitively expensive. Advise much appreciated.