All Forum Posts by: Michael S.

Adding a "For Rent" sign with price and contact info should help.  The renters who would be most comfortable with a C class rental, are those who live in that area.   I had one property manager advise me not to put up the "For Rent" sign since it would encourage break-ins, but sometimes in the C and especially the D class, they break-in regardless of the sign.

See if you can increase your online advertising venues. Craigslist is good but your property manager should be able to add your listing to the MLS as well as websites such as Hotpads. My property managers hate Craigslist but it has worked well for me.

A new price and fresh new add can help.  Try some new photos and keep in mind lighting (not too heavy on the shadows).  I also use photo enhancement services such as Box Brownie to improve a photo for a few dollars to get that twilight setting.  

You may spend a little more money on advertising and staging but if it rents a few weeks or a month early, then your effort will more than pay for itself.

Hi Robert,

Perhaps a reduction to $695 would help. A new price can sometimes perk up interest and looks much less than $700.

Here is another tip that worked well for me:

My property manager had one of my rentals sitting on the market for over a month, so I took matters into my own hands.  I raided my personal home for home decor and brought these choice pieces to the rental home.  I spent the day freshening up the home, adding home decor and adding a few touches such as adding little hotel soaps and shampoos to the bathrooms and rolled white towels. For the kitchen I added a dish cloth, two wine glasses, a bottle of non-alcoholic wine and a Ikea metal fruit basket.   

The end result was that we had two applications that weekend.

I've tested this technique on Class B though D, and it works.  On the D class I don't bring my personal decor (since it may be stolen) but I still add the inexpensive items like the rolled bath towels, the wine w/ glasses and dish towel in the kitchen and some flowers planted near the front door (even though they would quickly kill them after move-in)

Years ago, in two different events, I have had rentals that sat for a month with little interest.  In both cases I had a friend call the property manager as a potential interested applicant and in both cases the calls were not returned.  Both of those property managers were dismissed. ;)

Good Luck!

Funding renovations:

It depends on how extensive/expensive the renovations are.  Cash (savings) for the small ones and possibly financing for the big renovations. As of summer of 2019, there are some loan programs that help with financing the purchase and the renovation.

In regard to credit cards. Credit cards can be good or bad depending on the user. If using credit cards, use a business credit card in the name of your LLC. Avoid putting the balance on your personal credit cards since this will reduce your FICO score and may hurt your chance for qualifying for loan financing at a critical time. Of special note: Not all LLC business credit cards are the same, some of them will report the balance to your personal credit report, thus partially defeating the purpose of putting the repairs on the business credit card in the first place. Chase VISA Business card does not report the balance to your personal credit, Home Depot and Capital One do report the balance to your personal credit.

Pay off the credit card each month, if you cannot and you still wish to use a credit card, find one with an introductory low 0% APR for a year.

Todd, 

Did you find a painter for your multiplex?

I just had a quote of $2000 for a 700 sqft home. I try to stay under $1 sqft, but maybe I'm living in the past.  Sometimes I get crazy and do it myself, but it makes it difficult to grow an empire if you are trying to DIY every rental. 

Good Luck!

-Michael

Casey, 

I'm located in the Phoenix area (east valley) as well with roughly the same amount of doors.  I have mostly SFRs and sold off my multiplexes due to the quality of tenant I was getting.   You're doing well considering appreciation, mortgage debt being paid off each year and cash flow.  The last few years for those investing after the crash have been life changing. 

All of that said, I have been having the same thought regarding return and "dead" equity and agree it could be better. I bought in Tucson for better cash flow (though the appreciation is not as much, so the return balanced out), also it was difficult to rebuild a portfolio of workers for repairs in another city. I've also spent a few years researching markets out of state, mostly those outlined by the Jason Hartman network. I'm not affiliated with his website, but I recommend checking out the properties section just so you can see the ROI in other cities. They are still finding 10% cash on cash or 30% with leverage in some markets.

I've slowed down on buying in Phoenix as the deals diminished but there are still a few deals a few times a year if you have cash ready.  Be sure to make your money going in.  Look for under valued or distressed apartments in need of a turn around or management, otherwise it will be so much work to simply trade dollars from one property to the next.  Be sure to over estimate your repair budget on new acquisitions, labor has been getting more expensive as the economy improves.

To sum it up, I think you can still find 12% cash on cash with 3% appreciation but just not so much in the Phoenix market.  In the Phoenix D class areas there is always the mirage of double digit cash flow but the reality is much different.

Good luck

 I absolutely agree with Mr. Rosen.  

The excellent contractor that I worked with for a few years was recently gobbled up by higher end Scottsdale flippers/investors.  It is a sort of evolution where you hire and fire until you find one that provides quality work at a reasonable price.

The guy I hired and fired this week thought it best to simply paint over Teenage Mutant Ninja Turtle stickers rather than remove them (this was one of the more humorous problems I had with this worker).

I'm currently searching for: Tile Installer, Painter, Plumber and handyman for small repairs ...or a good contractor to handle the project.

To all : Thank you for your comments!

The eviction I am dealing with is outside of my local area and with a new property manager, so I'm a little more involved than usual.  The process can be stressful, as my imagination creates images of the tenant demolishing the rental before the eviction or the court delaying the case due to an unforeseen technicality.

I've narrowed it down to best case and worst case scenario.

Best case - the tenant vacates peacefully and the home is not damaged.

Worst case - I have to give the tenant the home and the court orders me to become his butler for the many years. 

@Jay Hinrichs

I'll have to search for your post. I hope your friend in PDX had a favorable outcome to his eviction situation.

Why we canceled a tenants direct deposit payment option…and why you should too after the 5-day notice. (This event pertains to an Arizona rental eviction issue, your states laws may differ...or be the same.)

Having direct deposit available to a tenant in arrears creates a situation where the tenant could potentially wait until a day before the court date and then make a partial rent payment, potentially leaving the landlord to have to resend the 5 days notice, re-file the court docs. Giving the tenant 20 more days of “free” rent while the new 5-day notice and court date is set.

This is due to: A.R.S. § 33-1371.

After the 5 day notice has been issued a partial payment creates a “re-set” for the tenant and the landlord must re-file to collect the remaining balance.

“After the five day notice, the landlord will most likely not be willing to accept partial payment because he will not be able to proceed with the case unless the tenant agrees in writing that the landlord can do so. A.R.S. § 33-1371. “Sourcehttp://justicecourts.maricopa.gov/CaseTypes/eviction.aspx

Our experience regarding a tenant from hell:

Overall our experience with tenants has been agreeable and often pleasant but in dealing with a large number of rentals you will occasional encounter the tenant from hell. Despite this, rental real estate still remains a great endeavor.

Over the past three months I have had a tenant become increasingly unreliable at paying rent on time.Late rent and excuses became more frequent.Filing the 5-day notice was done for each incident.Excuses ranged from “someone stole my identity” to medical emergency. Further investigation “deep Googling” later revealed that the tenant actually had their wages garnished for court related issues.In addition to the late rent, the tenant had always been a frequent complainer, we fixed each request. In an effort to be a “good” landlord the property manager went as far as to remove trees the tenant did not prefer.

After the most recent 5-day notice, the tenants behavior became increasingly aggressive.

- The tenant formally complained that a faucet was now dripping as if to imply that the home was un-inhabitable due to this.

- The tenant demanded the ability to pay rent via direct deposit.

- The most recent event displaying the tenants state of mind is they texted the property manger that rent would be available for pick up at the home in 48 hours.When the property manger went to home the male tenant repeatedly loudly screamed to attract witnesses why the property manger was coming to their home and harassing them. At this time the tenant unsuccessfully attempted to provoke the property manger into a physical reaction.

The request for direct deposit seemed the most harmless.The tenants request was granted and an account# and routing # were provided.However during this time I thought this seems an almost normal request, but why is the tenant so adamant about having direct deposit available and why now after the property manager has made paying rent so easy, including front door service?The answer can be found in A.R.S. § 33-1371. It was most likely the tenant’s intention to make a partial payment days before the court date and create the need to re-file. The option to direct pay was canceled 24 hours later and the account closed.

As of writing this, the court date for eviction awaits next week.

In hind sight there are some screening criteria an addendum that would help the property manager to avoid “hellish” tenants. But that is for another day/post

@Serge S.

I ended up not going through with the loan, it was an option I was exploring for a larger than usual purchase.  I received two emails from First Key, here is their contact info as requested.

Scott Boyker, Loan Officer | Business Development

FirstKey Lending, LLC

Office: (646) 362-6495 E-Fax (646)-362-6500

155 N. Lake Ave, 8th Floor, Pasadena, CA 91101

[email protected]

www.firstkeylending.com

Grace Soueidan, Senior Vice President

FirstKey Lending, LLC

Office(646) 362-6484

155 North Lake Ave 8th Floor Pasadena Ca. 91101

[email protected]

www.firstkeylending.com

For now I have been sticking with smaller SFR projects. I have found the leverage and terms are much better with the smaller residential lender I have been using SNMC - Security National Mortgage Company

Let me know if you need any additional details.

@Ed Caldwell

I'm one of the other 11 making offers in the east valley :)

I agree that the bidding has become more competitive, to the point where sometimes: purchase price plus fix up = no longer a good deal

I've looked out of state for better returns but have yet to dive in.

So far my furthest purchase has been in Tucson.  There are some good deals there but the rents are lower and the pace is a bit slower. Even a few aggravating issues such as needing to go to the city of Tucson planing and zoning dept to have the electricity turned on.  No fun driving two hours and then waiting in line all because credit cards are not accepted over the phone and no checks by mail.  

I too am interested in an east valley meet-up.  Perhaps it is time for condo conversions again.