All Forum Posts by: Michael Boyer

Not sure if anyone has mentioned it, but I would explore (if you have not) an option hiding in plain sight.

For example, if you have been managing the 49 units lock, stock and barrel and doing a great job, what about approaching the owner(s) with some owner finance options if you think they may be amendable in the near future. Maybe explain you don't have the traditional down but can operate the place (actually have been) and the property can pay the note.

Run the numbers in your head and see if they might get more monthly as the note holders on the property than as owners (paying all the overhead like repairs, management, etc). That phrase "more money" every month I recall from REI legend Jay P. Decima (who is on BP some!). It can get owners attention (whether it be a duplex or 49 plex). They seem to at least want to hear your pitch!

Plus, ideally you already have a built in connection and relationship with the owner. Granted, it may not work if there are multiple owners (who can't agree), institutional owners, etc. But suppose it is an older couple looking for an exit strategy, you might craft a deal that works for all (with a competitive interest rate and balloon for them). 

Best of all, they know you can run the place. Of course, you also may have insights that make you shy away (any property defects, deferred maintenance etc). So the deal would turn on whether it fit for the owners and you... But it could be you could be a problem solver for them, helping with management and even an exit strategy. 

Perhaps you cold tactfully broach how you would like to own and operate but lack the capital and if anyone ever would owner finance, you would be interested.... Then who knows maybe they call you in  a rough headache filled month when a few expensive repairs or vacancies have them thinking about the merits of being a note holder getting a fat check every month and no problems....

Best of luck!

Welcome to the world of landlording! 

Crazy idea... with oil in the 50 buck range... 

Could you rent it out right now as is for positive cashflow? Is it in fair rental condition (even close?). Would cosmetics like paint and flooring get you there? Magic word there: rental condition...

Look around at a few other rentals in the market/vicinity (not for sale but for rent nearby).

The reason I ask is that you are just starting out landlording and with the learning curve, you may get some wear and tear specialists as tenants early on... a few bootleg pets..maybe worse...

Could be tough on a newly redone house with all new finishes, etc. Then it looks dated and worn out again...

You could learn about landlording with a dated unit as long as it is clean and functional... 

Then I would actually look to do the full rehab as an exit strategy when I was going to sell (ideally when oil is up and all the hotels are full of six figure workers that can't buy house if they wanted to)... 

Or maybe do a fix and rent rehab when you really know more about the process. It may even give you a better idea of durable options you want for a landlord friendly rental (think: less to break/damage)..

Looks like  Lee v. Mojo may be a great rivalry again this year (both still undefeated).. Like old time (Permian 92 grad!)...

Best of luck out in Friday Nights Lights Country!

Welcome! 

Pitfalls? 

Well, to borrow from Dave Ramsey: Look out for the 10 thousand dollar cat ... the one that may destroy your floors, trim, even walls and cabinets...

 (that may be the remediation cost, more or less, depending on the situation, materials, and labor rates)......

Best of luck!

Part of the beauty of being a small time landlord is being your own boss....

So you lose that right off the bat trying to include the 3rd party who does not seem to bring much added value (but potential complications--more meetings, communications, potential disagreements, and headache).... 

With friends in business deals, who needs enemies....

I would keep it clean and sink and swim alone as a husband and wife team. Just save up till you are ready. It may even give you time to get some more REI education and confidence (a win/win/win--more money, more knowledge, and no 3rd wheel investor)...

Best of luck!

Related to the CAPEX, I might check into the association some. 

You can control and budget your own CAPEX some for interior elements (like your own floor laying and the above schedule, for example) but for the association not so much.

Condos are odd ducks, too. I would look at two things--condition of the place and reserves (sort of two sides of the same coin).

 First, I would check the actual reserves of the association, usually pretty easy to find out in the buying process (required resale cert etc). Are they adequate. Ask around and compare to other similar associations.

Then I would see if these reserves are adequate in light of the real needs of the place.

For example, does it look like the place has some major capital costs coming (roof, parking lots, windows/doors, decks, HVAC, siding, grounds, common areas, etc)? Check the actual condition of the place and the minutes and HOA documents. Any reserves may be accounted for and then some..... (not uncommon).

Sometimes you'll see a place in good condition (but with low reserves, indicating they spent the money to renew the place); or one with high reserves but in dated condition (sign of a tight fisted board). But the worst is an association with about everything at the end or near its useful life and very low reserves (which means an increase in dues or even a special assessment is coming--which will tank even the best laid rental plan!)

Best of luck!

One of my favorite topics on BP... 

Glad to see it "bumped" over the years...

Here is one of my latest and simplest rental hardeners: 

Tell Tenant in Onboarding--No Moving Appliances (Ever).

Why? It is not just wear and tear....

I have seen dryers pulled out and then the vent comes loose, sending hot humid air into the attic, unit, even inside the wall.

 I have even had some expensive rot repair as a result (extensive rot). So a tenant may have gotten their lost quarter or detergent but left the landlord with thousands in repair costs. 

Tenants in my experience do not properly unhook and reconnect the appliance lines--but just pull, pull, pull, (the harder the better they seem to think)...

A careless tenant could even pull off the water lines on a washer--an emergency disaster (not had that one yet, knock on wood). A frig with a water line (ice maker/water dispenser) could have the same issue (but I use plain jane, no frills).

I even had a couple of departing tenants turned oven pullers that yanked out the socket for the cord......

So my script now is Never move any appliances. Ever. Never. The tenants need not pull these out to clean or for any reason (too much risk)... I will even come and help retrieve something for them (or lend them a grabber) to get behind any appliance.  Rather than telling them about how to disconnect lines, pull it out, reconnect (too complicated) I just try and explain the catastrophic gates of hell opening scenario that can happen if they jerk these out from the wall carelessly.

Best of luck!

And once you know your situation based on your jurisdiction (see your relevant landlord tenant rules too) layout, and situation, you have two choices: (1) DIY or (2) Hire it Out. 

The snow is coming, so you have to have a plan and not rely on the kindness of strangers (or tenants).

On DIY: I see some smaller scale landlords with a plow on their truck (and it may pencil out if you have enough units or be ideal if you have one anyway to do a long driveway or private road to your home). Or with a duplex driveway, one could try a snowblower or one of the body sled type shovels (depends on your amount of snowfall and personal fitness/interest). You look young in the photo--so you have no cost landlord CrossFit as an option. The bigger issue may be the frequency of visits, so unless it is on your way to work or something, you may be driving there alot (in the snow of course)...

On hiring it out: It might be ideal is to find someone who already does the neighboring multiplexes (and does it well). Maybe ask a landlord neighbor. I find duplex,triplexes and quads are often nearby in clusters due to zoning, etc. That contractor is already in the neighborhood (no separate trip) and experienced. Maybe work on timing to have the tenant's vehicles out of the way. And even with a plow truck, check details like the porch, sidewalk etc. This may be the part you delegate to the tenant (or contract out or DIY). Start now, many of the best folks are booked already (and not available when the snow storm has already hit). 

Best of luck!

I recall there are some good discussions on appliances in the BP forums (maybe try searching "appliances").

My general sense from reading these in the past is that it really depends on your market. 

That is, if all the similar properties in your area are offering appliances, you probably have to as well in order to compete (otherwise, you could lose out on good renters and have long vacancies).

But I was struck by the variation across geographic regions in the US... Some folks chiming in from rural areas (in the South I recall) rarely supplied appliances for single family homes while more urban, suburban multifamily and condos it was the norm. 

I am guessing from your location (SF, CA) that fewer renters are toting around a refrigerator and stove in the back of a pick up truck. So you probably supply them in that market (if that is where you are looking)..

As to the PROS: 

• You avoid excess wear and tear of having appliance delivery and removal done by every arriving/departing tenant (that may not be as careful as you); 

• Plus, you get some assurance the installation is correct (especially key with a washer and dryer).

• You can make your rental more competitive (if others lack them) or be on par with the comparable rentals.

As to the CONS:

• Yes, there is the initial and ongoing costs.

• Sometimes you may feel like an appliance repair person (or that you are funding one's retirement), but there are some clever clauses and practices some on BP use to shift some costs for appliances and for damage (beyond normal wear and tear) back to the tenants.

• It is one more thing to maintain, clean, and account for as a landlord. And they are bulky and hard to move (especially with stairs).

Some of my best tips are to make peace with it and get to know your appliance delivery person on a first name basis (they may prevent back surgery for you!). Make sure to get delivery and removal of the old appliance when you replace them. 

Also, get the simplest (more features just means more to break) and sturdiest appliances you can find. 

Best of luck!

Some of the more bizarre: 

• A window for an old Jeep Cherokee was left behind (found behind a door).

• A new, crated shower stall was once left in my parking lot (there was some weird story behind it like the tenant had intended to use for an in-laws remodel).

• Too many artificial x-mas trees to count.

• A machete (under a mattress)

• On a turnover, I once vacuumed under a refrigerator of a condo and just kept sucking up dried up dead small birds the tenant's cat had hunted and left behind. Probably half dozen.

Never had more than one or two late in my four-plex at any one time. Even then rare...Having 100% extremely late sounds fishy.

Bad news: you may have to serve some notices and carry the mortgage (all or part) in the transition.... and you may need new or more effective management.....

Good news: you can refresh these tenants (i.e., not renew as lease ends or evict for non-payment); screen the new ones and emphasize timely payment; also you get a good lesson: give one tenant an inch and they'll all take a mile!

Not a statistician-- but unless you are having an economic downturn (or all work at the same place and it went under)--collusion sounds likely as the odds are against all tenants suddenly having a financial exigency at the exact same time.

Word may have spread that nothing serious happened with late rent (no late fee? no notice to quit?) and rent did not become a priority for the tenant's dollars.... 

Good reminder that you make and set policy not just in the lease and rules but also in the behavior and actions of the manager/landlord (no repercussions=no compliance)...

Best of luck!