All Forum Posts by: Mitch Holmes III

Avoid this sh** hole. It's full of con artists contractors, junkies, and code enforcement will always find a reason to get in your way to extort you to fund the the city. Read up on Harrisburgs code enforcement scandal to extort investors and homeowners. 

@Sophia Coleman I hear you. I haven't done any of my own repairs or cosmetics on my first property but I did learn how to recognize the greedy, overpriced contractors from the quality reasonable ones. When you get your first property expect for some contractors to see you coming and try to get all that they can but the more savvy and experienced you become the more you will be able to leverage a deal that works for both of you.

@Brandon Schlichter Wow! I didn't know it was legal or possible to own that many properties within a short span of time. Your story is very inspirational. I will be comfortable with 20-30 units and I am taking a short cut by buying multi-units of 3+ units per bldg.

@Leslie Carter sometimes it's just not worth the headache. I took a tenant to court and sued for back rent plus property damages almost 2 years ago and still have not received one red cent. Unfortunately, landlords are portrayed or seen as greedy selfish exploitative slumlords and the worst tenants receive sympathy of the court. Unless that $4,500 makes or breaks you sometimes it's best to cut ties and be wiser next time.

@Sophia Coleman Since you have excellent credit why not use a credit card? Also Home Depot has create DIY videos to save you money on hiring a contractor for small jobs you can do yourself like redoing a floor with laminated sheet tiles. You'd be surprised at how much cosmetic work you can do yourself and have your property in turnkey condition in little time.

Sophia

thats great advice. Thank you and please keep me posted on your real estate journey.

One of the most stressful things for me as a landlord is dealing with feuding tenants. In my 5-unit bldg. I have had my share of tenants bypassing my property manager and contacting me directly to resolve complaints about their fellow next door, downstairs, or upstairs neighbor. I've had tenants that were great neighbors until their dogs got into fights, turning them into sworn enemies. 

I find that sometimes the most simplest of things can create significant tension like tenants that work different shifts disturbing one another while trying to rest. For instance, I had a young man that worked nights so when the other tenants would get ready for work during morning hours it would disturb him and when he came out during late hours and turned his TV on or listened to music it would wake the bldg. up. 

Things like children running or playing, parking a car too close to a neighbor's entrance, having too many guests or certain kind of guests all can create drama between neighbors. I thought having a property manager would take care of that but I was dead wrong. I found that if my property manager/s didn't appear to take the tenant's complaint serious enough or was impartial to their complaints, they would reach out to me to step in and resolve and taking sides is something that I never want to do because both parties are my customers. 

Unless a tenant is breaking the law or violating their lease where I can issue a warning or push for an eviction to solve I found the most effective way was to ask the neighbor with the complaint to try to have a direct and transparent conversation with the other tenant to come to a resolution and this method only works about 50% of the time so I would love to hear from other fellow landlords if they have any solutions or advice to offer.

Thanks

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

My first real estate purchase was a commercial space in Brooklyn NY. I used it for AirBnB but after all of the nagging from the city and my neighbors I sold it back to the board. Also, NYC is expensive, risky and too tenant friendly to profit as a landlord. So I did my research for the best rental income markets for landlords and found out that PA had one the best northeast opportunities. So I jumped feet first into a 5-unit apt bldg. (4 apartments and 1 commercial space).

What made you interested in investing in this type of deal?

Single family units are too risky to me. What if the tenant loses their job or decides not to pay the rent? That would leave me holding the bag for the monthly expenses. Multi-units have way more leverage in that scenario.

How did you find this deal and how did you negotiate it?

My realtor pitched it to me about a year before I made an offer. The property just would not sell because of the repairs needed and the current tenants would not allow anyone to view the property.

How did you finance this deal?

Bank loan + cash

How did you add value to the deal?

I had 40% of the deposit

What was the outcome?

I got the seller to knock almost $20,000 off of the final price.

Lessons learned? Challenges?

The best lesson I learned is to never purchase a property that is already rented. The seller failed to tell me that not all of the tenants were current with their rents. One family turned their apt into a drug den. The previous owner allowed the section 8 tenant to practically live rent free as long as she didn't report any code violations to code enforcement. The first 9 months were a nightmare. I spent a lot of money on court fees, maintenance and non-stop repairs.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Wells Fargo