All Forum Posts by: Michael Karl

welcome to BP from a fellow Buffalo member.  You are in the right place to find out everything you need to know about real estate investing here.   good luck

the suggestion of 1/4 drywall is a good idea.  by the time you get all the texture off and refinish and repaint the ceiling you are not saving anything.  plus you don't have to deal with the headache of when you scrape too much off the existing drywall area

I am sorry I am a few days late to this conversation but I wanted to give a little input. I do commercial and residential HVAC as my full time day job. The way I see it many of our commercial/restaurants costumers and the employees treat a thermostat the same way my tenants do.  I see a lot of suggestions about just using the cheapest stat you can buy from Home Depot or Lowes, I disagree with this suggestion because the money you save buying the cheap one is going to be spent on service calls.  Tenants do not take the time to see if it is problem with the thermostat they are just going to call and tell you the furnace is not working and you will pay for a service call and just find out your cheap thermostat is broken, AGAIN.  the suggestion from @Brian Pfaehler about using a stat that does not require batteries.  I would steer clear for a touch screen because a tenant will not be as gentle as you would to the screen and I see them broken a lot.

  My best suggestion would be a Honeywell Pro 6000 wifi, can be purchased on amazon for $94.  This stat will give you everything you want and is made by a well known company.  I have this exact stat in my living room along with many costumers and tenants.  the online settings also give you options to regulate the highest possible heat temp and lowest possible A/C temp so you can prevent unnecessary service calls from careless tenants.

Thank you to everyone that responded,  I just wanted to clarify a little bit from my first post because to see if anyone else has any different view point.  The contract that was in place is not requiring the tenants to actually shovel the snow themselves, it is requiring them to work together to hire a plowing contractor.  As for this winter the tenants are all still under the contract that was in place when I purchased the property so I can not alter the lease mid contract.

@Meghan Sullivan first of all welcome to BP from a fellow western New Yorker.  Next as it seems to be the most popular question you asked is regarding the security deposit I wanted to throw in my 2 cents.  I agree with @Kevin Siedlecki that you should be collecting a security deposit if nothing is in place now.  But I would confirm with the tenants that they did not pay a security deposit.  It would be terrible for you to take the sellers word then send a letter to your new tenants requesting one and they tell you they paid one.

In response to the question on rent increase, you did not say what the current rents are so its had to give you my full input but $100 a month seems like a heavy increase right away.  I know you said you would not mind if one tenant left so you can rehab a unit but a large increase right away might scare both of them off, and as you said you will be going into the holidays and the cold months in this area when its hard to find new tenants.  Just think about the money lost with a vacant unit compared to the unit being undervalued by $100 a month.  Something I just did with inherited tenants that were undervalued on rent and month to month, have them sign a new month to month agreement right away with a small increase right away maybe $30-50.  Then keep them on month to month till spring and if the tenants seem responsible offer them some options (1 year least with an increase of $20-30 a 6 month lease with an increase of $30-40 or if they want to stay month to month an increase of $40-50 more.)  if the tenants are good and willing to stay long term you are better off with small increasing and keeping them in place then losing them and having to rerent the unit.

As far as updates when either unit is empty be careful not to spend money on updates that will not allow you to raise your rent.  You have to avoid the urge to make improvements because it is something you would want, you are not living in this house you want to maximize your return on any improvement. 

When it comes to a business being run out of the unit, you need to put an end to it right away, it the contract and actually verbally notifying the tenants, just because it is in the rental agreement even if someone falls that rental paperwork will not stop a lawyer from filing a lawsuit against you.

And finally in response to the lawn cutting,  you can ask the tenant to take on the responsibility and discuss with them some kind of compensation if they are interested in doing the work.  But I personally would not just automatically put this on a tenant, part of the reason some people rent in the first place is to avoid these responsibilities.  It is ultimately your responsibility and you don't want to lose a good tenant or scare away future tenants with lawn care that you can hire out.

by no means am I trying to be rude or cause a problem but @Mark Holencik I totally disagree with everything you said.  You might have this type of issue with your local inspectors, but I do not think this is a standard.  Even if the permit is a money grab "revenue" I can tell you in our area the inspectors do know what they are doing and what to look for to insure a properly installed roof.

you said most inspectors would not know if the contractor was doing a good job, as a real estate investor yourself are you saying that you can not tell if a roof was properly installed or not?  I have had roofing installed on my personal home and on my rental units, and I can tell you that I spend time on every roof when the contractor is working so assuming that someone does not know if the work is done well seems wrong

well I am a little late to the conversation @Daniel Collins is the house actually inside the city of buffalo or in a surrounding area? 

For those that have commented about not needing permits in your area.  It is Required in almost every town village and city in the Western New York area.  

the reason I ask about the actual location of the property, I have had roofing work done in 3 different towns in the area and all the towns require on the permit is proof of insurance from the contactor,  if that is the case you can probably have the permit pulled either by you or them and have the projected finished.  If you are in the City of Buffalo I believe they require a license from each contractor, which I am not sure how much work it takes for them to renew the license but they should do that and then get the permit.  if the insurance is also expired I would not let them step foot on the property until the insurance is up to date.

Looking for a little input on snow removal from a multifamily property.  I am in the Buffalo NY area.  I purchased a 3 unit rental property back in September and all 3 units have existing tenants in place from the previous owner.  The previous owner had a section in the rental contract that put snow removal on the responsibility of the tenants.  From that the previous owner told me there has never been an issue with this process and it helps keep the rent lower.  My question, is there any reason that this is not a good idea or anything I should watch out for?  I am in the process of completing renovation on a duplex in a different part of town and would consider using a similar contract requirement with that property. 

Just want to know what other people think and any suggestions to make improvements.

@Eric DeVito the easy answer to this question is which has a better interest rate. But a little more in depth answer would be how easy will it be for you to secure a conventional loan, and do you have enough equity in your personal residence to fund the deal? I can speak from personal experience, I used a HELOC to fund part of my first deal. Some things to consider is what type of deal you are doing, if this is a flip you can HELOC it and pay it off after you sell the property, if it is a buy and hold property that needs work you could purchase the property with the HELOC and do the needed work to increase the value then get the property rented and then refinance into a long term loan(known around here as the BRRRR strategy) But there is no perfect answer to this question, you just need to weigh all the options and do what works best for you

@Priscilla Davenport, not sure why you would need to pay for your tenants renters insurance?  As long as you have adequate insurance for yourself and your rental property then it will not effect you if your tenant has insurance or not.  It is a good practice to encourage your tenants to get insurance to protect their own personal belongings if something were to happen.  But I would say it is not your responsibility to pay for it or even to collect the money and make the payment on your tenants behalf.