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All Forum Posts by: Matthew Tanis

Matthew Tanis has started 3 posts and replied 11 times.

Post: Offering to let tenant out of lease early?

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

Thank you all for your input!  We took your advice and offered to let her out of her lease which she has accepted.  We also asked her to compile a list of grievances so that we could run a root cause analysis of these issues to see if we could improve our processes and based on the many blatantly false things that she added, it is clear that we were not the issue here.  Even tenants who meet all of your screening criteria can make land-lording miserable!  Have a great day!

Post: Offering to let tenant out of lease early?

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

Looking for any insight from experienced landlords.

We have tenant who is consistently complaining of maintenance issues, even once repaired, states that we took too long to address, "don't care about my families health and safety," etc.

The background (and there's a lot of it!): There were screens missing from some of the windows upon move-in which we authorized maintenance to replace (they were backed up several weeks due to COVID shut down), A/C wasn't getting the apartment cold enough even though it had been serviced within the past year (set at 68F during the hottest summer we've had in years in Michigan) and we didn't offer to pay her electric bill, found a bat in the basement x 2 which we had professional pest control there at their first available appointment and they didn't find any evidence of a colony but we had maintenance seal off any areas in the basement that could allow bats in, and now a water leak from upstairs apartment overflowing their toilet onto this tenant's mattress.  She has certainly had unfortunate luck since move in and we've addressed all complaints including being willing to replace basement carpet because of an odor that she states is present even though I can't smell it when I'm there and the carpet was professionally steam cleaned prior to move in.

With this toilet overflow issue, tenant's renter's insurance policy states that this is a structural problem and thus our responsibility whereas we feel that the upstairs tenant is liable for this.  Upstairs offered to have the mattress professionally cleaned, but tenant refused.  Now tenant states that she is sure there is mold between the ceiling from the water leak and that's why she is sick all of the time, accuses us of neglect and many other choice phrases.  I have all records documenting our response times and maintenance records from a legal standpoint should she choose that course of action.  There is no ongoing water leak and maintenance will be there tomorrow to assess and repair, within 48 hours of the initial complaint.  My question to you all is this: am I exposing myself from a legal standpoint by offering to let her out of her lease penalty free because she is not happy with the home or our service?  All 10 of our other tenants have been very pleased with us and how we operate our business.  We certainly will be doing a root-cause analysis of this situation to learn and grow moving forward.  She has 6 months left on her lease and obviously we won't be renewing, has been late once but is caught up and pays on time, she just complains constantly and drags every old maintenance issue up whenever something new arises.  I'd take the vacancy just to be done with the situation.

Post: Would you go through with this deal?

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

I should add that the vacancy and repairs should be a bit higher as this was calculated on a much lower rent to run things more conservatively.

Post: Would you go through with this deal?

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

So the total rehab is going to be 75k which includes our contingency budget of 20%.  This is an old house and we want to make sure we have the cash on hand in case things go awry.  Projected cash flow is very strong:

Mortgage 402.21

Taxes: 250

Insurance: 83.25

Vacancy (5%): 82.50

Repairs (5%): 82.50

Cap Ex: 182.78

Water: 83.33

That leaves $1166.46 positive cash flow per month if I use $1300 per unit for a total positive cash flow of $17,202.48/year. We would then have to subtract out the rehab line of credit and payments from that, would refi in 6 months to pull whatever we could to throw toward the line of credit but would likely have to leave some money in the deal and won't be able to BRRRR it completely.

My ultimate plan will be to renegotiate, but I know that he had another offer on the table.  My hope is that with the numbers and the letter from our lender explaining why this won't work that he will negotiate with us, but no guarantee there.  Thanks for all of the replies.  I appreciate your time and assistance!

Post: Would you go through with this deal?

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

So I made a mistake with a PA on a duplex that needs rehab and misunderstood how much time I had for due diligence. It needs a moderate to heavy rehab and initial estimate was 35-45k. Actual estimate was higher then we add a contingency budget of 20% on top of that. Purchase price is 101,500 with a very difficult ARV to analyze. There haven't been any rehabbed properties in the last 6 months in this area. Our best estimate is between 165-185k. Smaller duplex 3 houses down that is not rehabbed but in decent condition is 165k on MLS now. Duplex under contract has both units 3/1 with access for shared laundry in the basement and off street parking. This is a C area of town that is up and coming with a multimillion dollar commercial property half a block away. Market rents likely $1350 up, $1400 down, back up plan is section 8 voucher at $1291/unit. Financing is 80/20 for purchase price with business line of credit at 5% for the rehab and the plan is the refi to pull out what we can. Would you do this deal or walk away giving up the $1000 EMD?

Post: Investing in the Metro Detroit Area

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

@Isaac Anderson

Have you thought about looking in the Grand Rapids area? Population is growing and rents are increasing. We have 3 duplexes currently and are looking to partner on a triplex in a great location.

@Charles Kao No relationship to Josh Tanis that I know of.  That side of my family is spread out quite a bit over the generations.  Looks life the FB group is a wealth of information!

Post: Blue Bridge Properties 1st Deal

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

@Jay Kadlec Dave's business partner here.  This duplex is lower northwest side of GR.

Thanks for the FB network idea @Charles Kao!  Small multi-family investor here.  Currently with 2 duplexes and looking to grow this year!

Post: When to begin eviction process

Matthew TanisPosted
  • Grand Rapids, MI
  • Posts 11
  • Votes 3

Thanks for all the information.  We went ahead and sent the notice to quit after the 5 day grace period.  Then heard nothing.  We were in the process of proceeding and I tried a last ditch text message and now are in good standing.  I anticipate this won't be the last issue from them and will be ready next month as well.  Lesson learned.