All Forum Posts by: Wesley W.

Hello All,

Well, I've had two small multi-family deals fall through over the last 12 months (I'm the buyer) over inflexible/unmotivated sellers after very unflattering structural inspection results.

I can't help but feel I am the only party with "skin in the game", and the seller is just - pick one - (mentally ill/a "tire kicker"/doesn't really want to sell his property/etc.).

Allow me to explain.  I'm working with a broker whom I am very happy with.  We do a showing, look at the rough numbers, make an offer - tit/tat - agree on a price, we both sign the contract. BAM - "under contract."

Now we move on to "due diligence", where my attorney asks for a bunch of stuff - tax documents, rent roll, water/sewer bill, copies of leases, etc.  They drag their feet/give a million excuses/send incomplete information/etc.  Meanwhile, title work is being done, and my attorney is sending letters asking for this, reminding for that, etc.

At this point, let's look at the "skin in the game":

ME:  $300 for attorney, $300 for title work

SELLER: $0

Now, after an excruciatingly long delay, we have the docs we've asked for - which are never as good as you were lead to believe - so the deal gets a BIT skinner than what you figured on the pro forma.  It's okay, you budget for that, so you have a margin of error that absorbs the shortfall.

Now it's time for the structural inspection.  It's completed and (GASP!) several major issues surface.  We begin negotiations again with a proposal for credit/remediation, but before that - let's check the score again, shall we?

ME: $300 atty; $300 title search; $500 multifamility inspection = $1100

SELLER: $0

We send a copy of the inspection report and a beginning negotation for some credit, and the seller basically tells us to "go **** in a hat."

We cancel the contract, and I am lighter by $1000-$2000 (depending on the number of units) and I've wasted a few months of time not following up on other potential deals.

This is beyond infuriating.  Can anyone help me mitigate my "skin in the game", since from where I sit there is absolutely no incentive for the seller to compromise if they choose not to.  (You'd think they'd WANT to sell a property they have listed, but I digress...)

This has happened to me TWICE in the last 12 months.  Thank you in advance for your collective wisdom.

I could,  but I am going under the assumption that they might not want to stay too long when (1) I have them sign a written lease,  (2) require them to pay on time or give them a "pay or quit" notice when they don't, and (3) increase their rent up closer to market.

I might not have any problems,  but I'd rather hope for the best whilst preparing for the worst.  And chances are, with this demographic,  there will most likely be problems,  especially since I am the "new sheriff in their town."

Hello All,

I'm seeking the collective wisdom of the BP community to try and get some insight on a situation involving a pending RE transaction.  Here's the scenario...

We are currently under contract to buy a few rowhomes that have current tenants without a security deposit.  As part of the attorney approval process, one of the things I asked for was a certified rent roll and estoppel agreements for each tenant.  This is how I discovered that 3 of the tenants do not have security deposits with the current owner.  Their tenancies are also month-to-month verbal leases.

So, I asked my RE broker to convey to the seller that this was unacceptable, so either the tenants would have to be evicted or security desposits collected.  My rationale was that I as the buyer would assume all the risk for these units after closing.  So if a tenant vacated and trashed the unit (or had to be evicted, or stopped paying rent, etc.), I would have no recourse for that financial hit except a small claims court judgement (which probably isn't worth the paper it's written on).

My question is - what would you do?  Is this an unrealistic expectation of me on the seller?  Would you assume the risk to buy the buildings?  (There are 8 total units.)  Anyone have any other creative solutions?  (Maybe the seller puts some money in escrow until the tenants pay their security or vacate...)

I'm anxious to hear some feedback.  I know RE investing comes with risk, but is this the kind of risk I should accept at the risk of cancelling the contract (and incurring legal fees for work done already)?

Thanks in advance!

This is because I just read that Michigan in one of two states (PA is the other) where they've made it illegal for insurance companies to discriminate against certain dog breeds.

Hi folks,

I have a section 8 tenant who is currently only required to pay $20 of his monthly rent (the rest is paid by the county).  I require my rent to be paid via checking account (tenants go to my bank, deposit their rent in x account every month).  I find this to be a low maintenance way of documenting and tracking the incoming rents.  No "check's in the mail" excuses or having to stop by the property and collect it manually.

In my rental agreement, I have a $50 late fee that is levied after 5pm on the 5th if the rent is not paid in full.

This month is one the first where he actually has to contribute to his rent.  He did some shoveling for me for $10, so he owes $10 for this month's rent.  Hypothetically, if he didn't pay the $10 by the 5th, he would owe me $60.

One one hand, "it's only $10" and a $50 fee seems excessive, yet I have a late rent policy that I strive to enforce in a consistent way and if everyone shorted me by $10 or $20 my returns would reflect that.  I don't know if this is something I will need to follow up with section 8 with or not.

My feeling is he has the money, but can't be bothered to walk down to the bank to deposit the money, and if I allow him some other means to pay (I pick up the cash, MO in the mail, etc.) I am just allowing tenants to shift their payment responsibility onto my list of "things to do."

I'd like to know if people out there have been in similar situations, and how would you handle it?

Thanks in advance!

P.S.  Like I said this is hypothetical (it's the 4th today), but as a new landlord I am trying to anticipate dilemmas and how I should handle them.

I'm a new investor and I have our first vacancy coming up.  I found this thread because I had a similar question.

I have several questions I hope I can get some help with:

I'm planning on giving Smartmove a try.  As I was setting up my account, the "view credit report" field became grayed out when I selected that the tenant would pay.  Does this mean that the tenant, upon completing the info and paying for the background check, has to give me permission to see it, or is the report generated and sent to both parties simultaneously?

Does Smartmove give the tenant a result that says "approved" or does it send the landlord the info and he/she has to toggle oone of the other based on all the other (non-Smartmove factors)?

Since you have to do your own due diligence on the other aspects of the tenant (landlord references, employment verification, etc.) - what do you folks do when Smartmove "approves" the tenant, but other factors cause you to reject them?  Would you do all the other research first, then have them go to Smartmove?  Or is that their "tough nuggies" and they are out $25?  How would you handle it?

Has anyone ever payed the $5 upsell for the full credit report?  Is it worth it for this purpose?

As always, your thoughts/input are always appreciated.  Thanks in advance for your advice!

@Dawn Anastasi This was an estimate from my RE broker who saw the unit and its condition.  It needs pretty much everything after these people leave.

@Account Closed - it's only been 4 months and I am already sick of the drama.  I was more tolerant of it before her belligerant attitude began last week.

Thanks for the feedback thusfar.

Just as a bit of information, between her and her husband they make about $65K per year, so it is clearly not a case of not being able to afford $600 a month.

I guess I really threw up a red herring with some of this information;  what I'm really wondering if this is acceptable behavior for a tenant?  (the bard-laden text messages)

Do your tenants treat you that way?

Hey folks,

I'm new to the investment game and I've come across a situation I need some input from the current landlords on.

I've got a tenant that has paid late each of the three months I have owned the property.  As per my lease, I have served a "pay or quit" notice after the 8th (5 day grace period from the 1st).  Each time, they have paid before I pursued anything further.

In the lease, they must pay $50 if they don't pay on the 5th, and another 5% of the balance after the 8th.

I bought the property from a lazy landlord that was too lenient with this particular tenant, so I am trying to condition her to my reasonable expectations.  Every month there is a different story; this month her car broke down, blah blah and she would not have the rent on time (this was before the 5th).  I reminded her via text that after the 5th there would be a $50 late charge and another $35 tacked on after the 8th.  She asked if I could waive the second late charge since she was "telling me ahead of time" and was "telling me the day she would pay" (the 12th).  I basically told her that my late fees were to offset my costs of any legal processes I need to begin for non-payment, and that I would have no choice to send out another 3-day notice on the 9th if there is no payment.

She responded with what I can only call a "litany of sarcasm" - about how she appreciates how understanding I am and "way to undermine your tenants' attempt to make rent" , she resents jhaving to pay installments on pet fee for cats she's had for years, etc.  She ended up telling me should would pay on the 8th, despite the hardship.  (As an aside, as I type this she has not paid, and I sent a 3-day notice this afternoon.)

My question is how would you deal with her conduct?  I have been nothing but professional and courteous with her, as I enforced the rules of our written lease.

On one hand, I think "I'm the professional" and should not dignify her conduct by responding at all, while the other side of me does not want to set a precedent where she can use me as a verbal punching bag during her residency.

Another piece of information that might be germane is her unit it totally trashed (she has lived there for 10 years) and would take about $6k to turn it over.  Her rent is about $100 under market (I raised it $50 when I bought the place in July), so I'm mitigating my losses on that unit as long as she continues to pay (albeit late).  To be honest, if the unit were in better shape I'm not sure I would tolerate her drama and BS.

Your thoughts and input as always is graciously appreciated!