All Forum Posts by: Mica Moore

For a multi-family building (Buy & Hold - for cash flow). What is the potential market desirability (to good tenants) for 1,2, or 3 bedroom units & is the best to own?  

Example:  1 bedrooms might attract singles, so less potential damage from children (but lower rent per unit). But the turn-over could be                    higher as people might outgrow it.  And demand for this small may be less.

                   2 or 3 bedrooms might attract families with children - more potential damage & pets (but higher rent per unit & more demand).

The client should of been counseled from the jump off that he will be getting no 'deals' that he needs to come in hot & heavy or it's a waste of time.

Before you rent increase the existing tenant (your only bread & butter to date) - take into consideration how long they have been there, how the keep the property & what their general reputation they have (this may be harder to figure, but you need to dig), and what the rental climate is like (tight hard to find places, or lots of inventory).  You want to avoid the tenant running away at the rent increase (unless they weren't worth having and you can get a new tenant in there quick).

If they move, you will not only have the absence of their monthly cash, you will probably have to spend some time & money rehab the unit to make it rent ready.

What are the state and local laws regarding this?  Which is better for your bottomline (run the numbers) - evicting her or keeping her.  

Tenants are ruthless -- if  this is your biggest problem you haven't seen anything yet.  Not your problem that tenants are less than desirable people - you want paying tenants, who take of the property & don't cause neighborhood drama.

Might be best to let her stay with an increased deposit (State laws vary).

For tax purposes it's best to live there a minimum of two years.

FHA is not likely to approve a fixer unless you get the FHA rehab loan. Conventional is always better (aside for needing a larger down-payment) because a seller is likely to choose a Conv buyer over an FHA one (FHA is a hoop jumping game).

I'm a former Property Manager.  The things I have seen can't be unseen.  Tenants are ruthless --- always, always have a security deposit.  That is your only true power over them once they move in - so make it as high as you can get (state laws vary).  I think charging a full security deposit of $1400 and getting free rent for the first month (a move-in special) is a better way to go & cover your bases. Also be sure to state clearly in the lease contract that the security deposit is in no way to be used for rent.  (They will try to leave the last month of the lease & think the security deposit will cover the rent).

Ok can you elaborate on the details - why the owner wants to sell & lease back? How long does he want to lease it?  What is financial situation on the property (1st loan balance,2nd etc.)?

Is she a good tenant otherwise? (aside from the pets?)  Does she pay rent on time, every time?  Does she keep the property clean & safe?  Is she a good neighbor that does not disturb other tenants/neighbors (no parties, or other disturbances)?  Those are the top three things that make a tenant an A+.  

If you think she has other positive compensating factors despite her being deceitful -- keep her.  If there are other issues affect your bottom line & you think you can get a replacement tenant fairly quickly -- let her go.

If you decide to keep her, make it clear to resolve the pet issue -- get all the pets on the lease and clearly state no more animals are allowed on the property.  Make it clear that if she violated this again she is out.

 Congrats on your first flip.  Have you caught the bug -- will there be more?