All Forum Posts by: Michael C.

Quote from @Michael C.:

Quote from @Eric Gerakos:

Quote from @Charles Carillo:

@Michael C.

I would say repair and sell. Then buy again in a better area. 

This. C properties are often no bargain. There's a reason they are inexpensive. 

 It was good for me because I was young and just getting into it. But I'm gonna take my money and run. Glad for the experience

Honestly, I hope this doesn’t deter you from being a REI.
It’s just one experience. Because of this, you already have waay more experience than someone else just starting. 

There is so many homes out there. Sitting there…waiting.
Use this a strong motivation. “You think that will stop me? Sorry, my momentum is too strong.”

It’s not what happens, it’s how you handled it.

I must say, I’m very impressed with the replies from everyone. This is a very respectful culture, minus the one rude comment.
Very inspiring!

Have you talked to your insurance company already? Most landlord policies cover accidental damage caused by tenants like fires and floods, while intentional damage is typically excluded (the remedy for the latter would be the security deposit or a civil suit). So were there any fires or water damage types of things involved that would be included in your policy? I hate to make insurance claims in general, except for major accidents when necessary (in order to avoid having claims on my record and premiums increasing or getting non-renewed), but this sounds like it may be major enough. The question comes back to whether the damage is eligible for coverage... 

Why did it take so long to evict? It shouldn't take the better part of a year to evict a squatter. According to google the average timeline for an eviction is 14-80 days in Georgia. Seems like your PM may have dropped the ball... 

Sorry for your troubles and good luck. Hope this works out and ends up not being as bad as it seems! I'd fix it up using insurance if eligible or personal funds if not (you can probably write some or all of it off on your taxes?), then sell and 1031 into a better location.

Quote from @Charles Carillo:

@Michael C.

I would say repair and sell. Then buy again in a better area. 

This. C properties are often no bargain. There's a reason they are inexpensive. 

Another option to fix and sell would be to clean it out and get it to 'investor ready' quality - meaning that it's ready for cosmetic renovations by the next investor.  If you're in a market where inventory is tight, this play works well for a fast and above low-end price.  The problem with improving a property in a C-market that is now known as a "squatter house" is that you may be subject to break-ins and vandalism during the renovation. If you've had enough, do just enough to make it ready for the next investor to jump start renovations.  

Glad you're on the other side of that 'adventure' now.  Best...

I also had the same question as @Steve K. 

You've had a squatter since June, and they just evicted now?  It took 10 months?  Something isn't right here - if this was the middle of COVID in 2020 or 2021, I get it;  but we're talking almost 3rd quarter of 2022 that this started.  What has your property manager done for the past 10 months about it?  What occurred during the past 10 months is the missing piece to the story.  

That sounds like a really frustrating situation to be in, I'm sorry to hear that your SFH has been damaged by a squatting tenant. As someone who has experience with property management, I can understand how overwhelming it can feel to deal with such a mess.

Regarding your question, I think there are a few things to consider. Firstly, repairing the house out of pocket and selling it might be a good option if you're looking to upgrade to a nicer neighborhood. However, if you need the money back relatively soon, that might not be the most feasible option as repairing the damage will likely take some time.

On the other hand, using financing to repair the house and renting it out at a higher price could be a good long-term investment. You could consider taking out a loan or using a home equity line of credit to cover the repairs. It's important to research your options and find a financing option that works best for you.

Alternatively, you could choose to sell the property as is, but keep in mind that you may not get the same return on investment if the property is not in livable condition.

Ultimately, it's important to weigh your options and consider your financial goals. If you have some money saved up for capital expenditures, that's a good start, but you'll also need to factor in the cost of repairs and any financing options you choose.

I hope this helps, and best of luck with whatever decision you make. It's definitely frustrating to have someone destroy your property like that, but I'm sure you'll figure out the best course of action for your situation.

Quote from @Gary L Wallman:

Quote from @Michael C.:

Quote from @Nathan Gesner:

You aren't cut out for being a California Landlord. Find a good REALTOR and follow their advice of either selling fast and easy or going through renovations and then selling. It shouldn't be hard to get a personal loan to cover expenses until it sells.

 I'm not a california landlord(my property is in GA), I actually don't consider myself a landlord at all. Just happen to have a couple investment properties. So you are right. Everybody has their thing.I'm also not cut out to be a bald, overweight, loser who's whole identity revolves around his work either. But you got that covered. Cheers.

 Guys,

Way too harsh, IMO no one is cut out to be a California landlord. Laws are way too skewed towards tenants.

Personal attacks are never appropriate.

Maybe shake hands on this one.

Respectfullt,

Gary

Quote from @Michael C.:

Quote from @Mark Broadway:

if you fix up and sell, can you purchase with a reasonable price where it still cashflows like this one?  In Cali, I'd think that should be considered very seriously.

 My property is in Georgia. I just live in California. So I will be looking in GA if I decide to sell and repurchase

 Gotcha.  I'd still need to consider the cashflow of the new opportunity.  In my area, cash on cash returns have gone from 10-12% to 8% with increased prices and increased rents.  It's a crazy time.

if you fix up and sell, can you purchase with a reasonable price where it still cashflows like this one?  In Cali, I'd think that should be considered very seriously.

You mentioned going after the mother that co-signed on the home. Morally, that is tricky area.

The mother may had nothing to do with what happened to the unit. She just wanted to help her son get a home. She may be suffering big time dealing with him, wonder where his is, and then get a summons indicating she’s being sued. Now she has to find a lawyer…all because of him.

Or…

The mom may have been the one that put the mosaic on the tub and added to his mental instability.

Of course, I do 100% get it. It is cut-n-dry: “You co-signed. The place is trashed. I’m not going to use my hard earned savings, go into debt, or force to sell something I worked for just because of someone else’s “don’t care”/irresponsibility. See you in court.”

You know all the details to make that call.

I’m not going to give any legal advice so I say talk to an attorney. Some may give 30 min free advise.