All Forum Posts by: Mary Fraga-Kingsbury

I agree with John Morgan.  Renters are typically not savers.  But they do need a place to live.  We provide a product (housing).  If it is a good product and we also provide good service (maintenance) most renters will become long-term.  And low vacancies affords more profit.  These are the ones that pay off my mortgages.  

One other strategy I have used is to allow the new tenant to pay half the deposit with the first month's rent and the second half with the second month's rent. This has worked for me.  Of course, proper screening is the key to a long-term renter.  

You have already worked with him (twice) and given him the benefit of the doubt.  And that is a good thing, a good deed.  But he is not seeing your side of the deal.  He is not taking into consideration YOUR costs.  The way I see it you are paying to keep him in the property.  You still pay the mortgage, insurance, taxes, etc.  He cannot go to a dept. store and legally walk out without paying for merchandise because he lost his job.  He does understand that.  Why does he think he can do that to you?  You are not in the business of housing people for free.  Like Richard F said "Cut your losses".  There is some good advice about tightening up your lease contract.  Mine has grown with every "bad renter".  It has given me authority when I need to evict someone.  I tell them "It's in the contract you signed on paragraph X".  Remember you bought the property to create income not to provide free housing.  Good Luck.  

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $5,000

Tax Delinquent property. I negotiated paying the owner $5000 + taking over the past due taxes and liens.

What made you interested in investing in this type of deal?

This type of property has less competition. The owners are hard to find but I am good at skip searching, finding, and contacting lost owners. I have good negotiation skills with are very mandatory for this type of owner.

How did you find this deal and how did you negotiate it?

Found it by driving for dollars. The property was a couple of days from being demolished. I worked with the city code compliance officer to stop the demolition. Both owners were out of town and very difficult to find. One of the neighbors was very helpful in giving me useful information. The house had become a nuisance and the neighbors helped me locate the owners.

How did you finance this deal?

Financed with Cash and monthly payments to the tax office for delinquent taxes.

How did you add value to the deal?

I transformed the back office into an efficiency to increase the number of rents from the property.

What was the outcome?

The property is now 3 units. Two of them are rented to paying renters. The third unit is occupied by my property manager. This is his payment for his services. He manages 5 units and is managing the remodeling of 2 more properties.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $43,000

This was my first deal. Bought the property for Past due taxes and liens + a $15,000 note to the seller (great terms). Renovation costs of $30,000. SF 3/2 home. Good renters just completed 3 years.

What made you interested in investing in this type of deal?

There was not much competition for this type of property: abandoned and tax delinquent. Owner was VERY hard to find and did not return calls or respond to email and regular mail.

How did you find this deal and how did you negotiate it?

I found this property by Driving for dollars. I used the internet and other resources to locate the owner and contact him. Took many calls to get him to respond. I was persistent in calling and texting. He was better at texting.

How did you finance this deal?

I financed this deal with cash and a note with the owner.

How did you add value to the deal?

I emptied the house completely. I held garage sales to help generate income and to remove all the furniture and stuff from the house. I also contacted antique dealers to increase the income on some of the furniture.

What was the outcome?

The home is now an income producing rental. I have minimal debt on the property. A small personal loan to rehab and the owner financed note. My total monthly loan payment is $400/mo.

Investment Info:

Single-family residence buy & hold investment.

Converted my personal residence to a rental property about 2 years ago. Renovated it and listed it as a HUD home.

What made you interested in investing in this type of deal?

I was moving out of state and wanted to increase my portfolio. Since I am almost done paying it off, I decided to add it to my retirement portfolio. My goal is to have 10 units in the next 5 years.

How did you finance this deal?

Original finance is a regular mortgage since I was living in it for about 15 years.

How did you add value to the deal?

I converted the formal Living room into a bedroom that can also be used as an office. I updated the kitchen and put new flooring. I used tile instead of carpet since it is going to be a rental. I also updated one of the bathrooms.

What was the outcome?

It is rented through the HUD program. So I am assured that the rent will be paid and that the property will be taken care of.

Lessons learned? Challenges?

The HUD process was lengthy. I am learning the system and might add more properties. I also had challenges with the contractor. Took longer than promised. I will add contingencies for not meeting deadlines and bonuses for completing early.