All Forum Posts by: Marshall Rousseau

Hi all. I rented out a tiny commercial space to some ladies that wanted to open a retail clothing store. 10 days after move in they had a falling out and one of them moved her portion of the merchandise out of the store the next day. That individual now wants out of the year long lease. The other individual wants to continue leasing the space but wants to change business to a combo craft store and tanning bed salon and is requesting I add a 220 v outlet for a single tanning bed. I told them I would comply with all of this but they would lose their deposit and the tenant who is staying would need to replenish the initial deposit account. I would add the outlet at my own cost. I also told the tenant she would need a new business license and insurance appropriate for the new business model. I do not think this is being done properly and transparency is lacking, but she already has tenant rights. 

To what extent should I be verifying that they have the correct licensing?  What would you do in this situation? I am concerned that this could turn ugly. 

@Albert Braun Thanks for the rely. Sorry I just saw this now. I think presto patch is exactly the same stuff as fix-it-all.  I started using bondo wood filler for similar external uses.  It's more expensive and more of a pain to work with than fix-it-all, but it's supposed to hold up better.  I'll check out some of the other products you mentioned.  Thanks!

Trying to make a decision.  Any advice would be helpful. I bought a mixed use property in a very rule town of 3K people. I bought the property for the residential units, but there are a couple small commercial units as well that the town requires are used for a commercial purpose. I was anticipating not even being able to rent out these units, but I put one up for rent at a low price and after a week found some perspective tenants. Everything checks out except they have terrible credit. If this were a residential unit, I would be immediately turn them down, but it is very likely that this unit would either take many months to get tenants in, or it would not fill at all. All my experience is with residential properties so I don't have a great understanding of the difficulty involved with evicting commercial tenants. They mentioned they could get a cosigner. My gutt is telling me to double the deposit and go with it because the realistic alternative is the unit sitting empty. Some more details below. Thanks!

Rent: $450

Deposit: $450

Tenant pays own electric

I pay water

* I need to put $1,000 worth of work in it to get it ready to rent

In the past I have repaired rotten siding and window trim with fix-it-all. The benefit is it can be sculpted to match the profile of difficult to find trim and can fix rotten patches of wood siding (up to a few inches in diameter) without pulling anything off the house. I did this a few years ago and it still looks good as new, but I recently read that its not recommended to use fix-it-all on the exterior of the home because it can absorb the moisture in the air and further rot the wood.  I would think as long as I prime and paint over it, it would keep the moisture out. Has anyone used this product 10+ years ago on outside wood repairs?  How has it held up? Are there any other products you would recommend instead? located in a wet area on the coast of northern California.  

Thank you both.  I am always amazed by the quality information I get from this forum. knowing terminology such as "Ratio Utility Billing System" makes it easier to look up regulations in my area with a simple google search. I think setting a usage limit and charging for overage would be the simplest way to go, if nothing more than acting as a safety feature against carless or malicious overuse (I had a tenant once who threatened to let the faucet run 24/7).  Does anyone know of any software that can help automate this process?  I doubt it exists, but having software that keeps track of utilities that can integrate with an electronic rent payment system would be invaluable. 

I have a property where the adu and main house share utilities. adding separate meters isn't an option at this point in time.  In the past, I have rented them out with utilities included.  When rented out next, is there any advantage to lower the rent, and instead, charge a flat utility fee? Is there any legal way to guard against a disgruntled tenant doing something like running the water 24/7? Located in the peoples republic of California. Thank you!

 Got it. Thank you!

Thank you for your valuable insight. I will think about revamping my system before the next go-around. Historically I have been very data driven when it comes to screening. Income, credit score, rental industry and then I would rent to the most qualified individual despite any convictions I might have after meeting them. This came back to bite me when an individual applied to one of my properties who wasn't just qualified, but he was overqualified. He had 800+ credit score, good income and clean background checks, but when I spoke with him, he seamed odd (very nice, but odd). I decided not to listen to my gut and rent to him.  I even commented to my family after he signed the lease "I might be renting to a serial killer...hahaha". He was the perfect tenant for about 4 months, then he went off the deep end. Knocking on neighbors doors with a hammer, pulling the wires out of the electrical box, and coming at me with a knife when I visited the property.  After that long headache, I decided to always listen to my gut in addition to the objective data I gather during the screening process. What I am trying to figure out is how to best protect myself. 

Question with example: what if someone is very qualified but they show up for a viewing and their car is overflowing with trash and bad smells?  My gut would tell me not to rent to this person, but there is no verifiable data I can point back to from a later date to support my decision. Is it as simple as writing down on my screening sheet (and saving to my records) that they were not chosen because they take poor care of their car?

Since I became a landlord several years ago, I have always use the same screening process. When I show a property, I have prospective tenants show up dispersed every 10 minutes on a given evening. The typical evening showing consists of around 3-10 different groups or individuals that show up over an hour or two. I have already prescreened them over the phone and they all meet my minimum requirements. Even through every one that shows up for the showing is technically qualified, if I don't have a good feeling about them, I will hold out and see if someone more qualified comes along for a showing later in the week. Once I have someone I feel good about, I do all my background/eviction checks and will rent to them if nothing surprising pops up. I have always thought this was a pretty solid way to do it and it doesn't break any fair laws. with that said, I listened to Brandon Turner's "The Book on Rental Property Investing" on a long drive the other day and he had a very different approach. He basically rents to the first qualified person that comes along and then he makes sure to send everyone else who applied a letter saying why he did not rent to them.  Brandon says that he has found this is the best way to avoid being sued over discrimination accusations. This methods seems to me to make more work and give less control to the landlord. 

Has anyone ever had any fair housing legal issues arise from a screening process similar to mine? What approach do you all take?

 Lol! I  was figuring out what to put in my lease long before I bought my first property. But figuring things out doesn't do much good if you forget to put it in lease. I think their is merit to what nathan was saying. A strategy I thought of after I bought my current place was to buy a place with no close neighbors and specifically target dog owners. There was one lady that almost rented from me a year ago who had 3 huge dogs and was willing to pay a lot extra, but I decided against it because, again that unit was in close proximity to my other units.