All Forum Posts by: Mike Morey

@Account Closed Initial treatment has already been done. No, not very good tenants so not a big loss. Not very clean unfortunately. 

So if I'm understanding your posts, you're both saying in order of not getting sued, cut my losses and refund their deposit? 

Thank you for your input.  

Need some advice from experienced landlords out there. Here's the situation.

I have a tenant who reported the discovery of bedbugs in their unit, on a bedspread and mattress. I responded immediately the next day with a pest control inspection by a certified exterminator and they found the presence of bedbugs. The soonest they could schedule the initial treatment was 6 days afterward. The tenant complied with the treatment procedure very well but the next day after the treatment sent a text that they could not live there any longer and they were moving out the next day. I believe they are blaming the bedbugs on a tenant 2 floors below them that I had evicted 3 months prior to them being discovered in the upstairs unit. The unit between these units had been vacant but was occupied for at lease 3 weeks prior to the discovery. There were some signs of bedbugs on a mattress left in the evicted apartment but I saw no signs of them while performing renovations to the unit. The end of the lease term is still 3 months away. The tenant did not give proper notice in accordance with the lease and what are my obligations to agreeing with the early termination? I believe I have the right to hold them to the lease terms but also want to do the right thing. Any other experiences similar to this. Any advice would be appreciated. Thanks  

Ken, thanks for the info. I'm just getting into this so I need to do a little more research on LLC's and their advantages / disadvantages. As far as my plan, i'm not exactly sure yet. I will see how this property treats me and go from there. I was initially looking for cash flow and long term investment and hoping to get some tax advantages out of it. It may work into owning more properties and supplimenting retirement income. Again, need to do more research down this avenue as well. It only takes time and most of mine is spent working. No i am not a member of REIC. I will let know if this interests me as I move forward with this investment. This is also a great site and the people are very helpful.

Mike

Kyle,

Do you know anything about the well such as depth (I'm assuming it's a drilled well but maybe you have a dug well) or rate of recharge? If it is a drilled well the well driller may have stamped the well cap with the depth or available flow in GPM (gallons per minute). If the tenant is using water at a faster rate than the well can recharge then yes, it will run out of water. If you don;t know the depth or recharge rate you can always dip the well casing with a long measuring tape (make sure it is clean). Just attached a heavy object to the end and drop it don until it hits bottom. It may hit the well pump first as that should be well above the bottom of the casing. You could always test the recharge rate as well by simply measuring depth as you use a measured amount of water and then calculate the volume using the drawdown and size of the casing. Hope this helps a little. Good luck. Mike

Ken, thanks. my email is [email protected]

I'll take a look and let you know if I have any questions which I am sure I will. How long have you been in real estate? I am buying this in my own name. Are there advantages to creating an LLC and holding the property under that and if so, what are they? My bank said I would have to go with a commercial loan if held under an LLC.

Mike

Ken, thank you so much for looking at this. I am feeling much more comfortable after your comments. Yes, that is a boiler with coil for hot water so that accounts for much of the oil. Once purchased I will have to look at the cost of changing to a cold start with boilermate or another alternative. Not a lot of room though as this is located within the basement apartment.

Yes, those first pics are the 3 bedroom and it actually already has a dishwasher built-in. I am looking forward to owning this and updating the 3 bedroom as soon as it's empty.

Not sure about your spreadsheet. I am not familiar with all the financial terms and calculations. I am only seeing sheet 3 of 7. Am I missing the rest of it?

Thanks

Mike

Hi Ken, Nice to have someone who knows the local market. The property is at 96 Summer Street, Waterville. Link: http://www.zillow.com/homedetails/96-Summer-St-Waterville-ME-04901/84971756_zpid/

So, what you think might be more like 1500 gallons in oil consumption will certainly change the numbers around. Anywho, take a look and let me know what you think. Landlord pays for heat and hot water, W & S utilities, taxes obviously. There are W&D hookups in all units and the 3 bedroom unit has a dishwasher. The tenant in the 3 bedroom unit may be moving out in June or so so that would allow me to do some upgrading so that may increase the rental value.

Amy: the 1 bedroom is actually in the basement and has a separate kitchen area, small living room and separate bedroom. Unfortunately the furnace and oil tank are in the front of this unit. I have checked with the Codes office and they confirmed it was a valid 3 unit.

Thanks all.

Amy, Thanks for the insight on the electric meters. I have looked at several properties and none of them had a landlord meter. Sooo, either the landlord is paying the electric for the unit consuming common areas electricity or they are giving the unit a reduction in rent or they are unscrupulous landlords. I will have to find out how this is handled at this property. No, I am not that guy. That's one reason I have not jumped in earlier. I need to own a nice property in good shape with tenants that care about where they live. I know, living in a dream world. Mike

Thanks for the response Amy. Still have to verify all expenses but these are from the seller.

Oil - $3,900 annual which did seem a little low to me as well.

Electricity is paid by tenants.

Water and Sewer $1,000 annual

Snow removal $280. This is shared with neighbor on shared driveway.

The one bedroom is $400/mo. (pays month to month)

The two bedroom is $700/mo (just remodeled and leased)

The three bedroom is $675/mo but the seller had is listed at $850 as a projected rental amount. They pay month to month but may be moving out shortly.

Don't believe NG will be available for a while but would consider it when it became available.

Thanks for your input. Appreciate it.

Mike

Hi. New to the BP site and appreciate all the good advice and experiences shared here. I am looking purchasing my first multi-unit and would like to know if the numbers make any sense to an experienced investor. This is a 3 unit residential property, 1 one bed., 1 two bed. and 1 three bed. On-site parking and laundry hook ups in each unit. Property is located in central Maine and is in pretty good shape with only some minor cosmetic repairs needed. Here they are:

Purchase price: $84,000

Total of current rents: $1,775. Gross annual $21,300

Expenses as reported: $8,360. annual

Debt service: $5,217. annual

5% vacancy allowance: $1,065.

Cash after Debt: $6,163. annual

Hope I covered everything to give you enough information. If not, please let me know what I am missing. Thank you so much for looking at this.

Mike