All Forum Posts by: Paul Hormann

@Jason Stratman I'm not really sure why you feel the need to rescreen them.  The whole purpose of screening potential tenants is because you don't know what they will be like financially or personally before they move in.  But you already have precedence with the current tenants - you can see from the rent rolls if they have been paying their rent on time, and you can assess their habits and suitability from the walkthrough of the place before you close.  No amount of screening will be better than actual facts from the place they're living now.  The only thing I can imagine rescreening for would be a criminal background check for your liability reasons.

If you let them stay on and they turn out to be bad tenants you will likely have to evict them.  But if they are bad tenants, you will probably wind up having to evict them with your rescreening method anyway.  In my experience, only good tenants leave politely and when they're supposed to, so if you're expecting the current tenants to not put up a fight if they don't pass your screening, you might want to think about saving the money and time required to re-rent and just have them sign a new month-to-month lease in September or October (depending on the lease notice requirements).  Hope this helps, and good luck!

I completely agree with @Tony Gunter and @Kyle J. concerning the deadbolt only method.  I've changed all my units in MD to a deadbolt and a keyless handle to prevent accidental lockouts.  I also use a product from Kwikset called Master Control that actually has two keyways - one for the tenant and another for a master key, and it has smartkey so I can rekey any of them on the fly.  I just carry one key now for all my rentals and don't have to buy any more locks or call a locksmith.

Hi Guillermo,

I've been looking at the Rockford area as well for high cash flow multifamily. Would love to talk to you more about what you're seeing in the market. 

Paul

I have a 7-unit apartment building in Maryland, just north of DC and I've been slowly renovating the outdated units as tenants move out. The apartments haven't been updated in maybe 30-40 years and still have stoves with pilot lights, but are still perfectly livable. The renovated units look great with all new stainless steel appliances, new kitchens, bathrooms, new flooring, etc., and I am increasing the rents by about 30% of what I was getting (may even be able to get more, since the current rents are below market and haven't been raised in 10 years). However, the renovation cost is getting pricey and I have some long-term tenants that really want to stay in the building. I'm trying to figure out what I can raise their rents to without renovating their units (or just minor upgrades) where it would be worth it for me to let them stay. I will be looking to potentially sell the building in the next few years and want to get the NOI as high as possible, but am unsure if a $50-100/mo rent increase would justify a $14k renovation per unit.

Can anyone comment on the differences in rents you're seeing between renovated units and unrenovated/outdated units with everything else being the same?

Welcome!

Thanks, Brian, great info!

Question for the CPAs out there... I have a lot of money in a traditional IRA right now from years in my 9-5, but am just starting a ROTH IRA. Is it possible to use both IRAs (self-directed) to form a joint venture and buy a property together? I would not invest any personal funds and so would not personally benefit. The idea would be to give the ROTH a higher equity split and get as much interest and equity into the ROTH as possible so I can have more tax-free income at retirement. Would this work?

Hi Chuck,

Is this still available? And what's the ARV and location?

Thanks,

Paul

Welcome Sarah!  I live in Falls Church, so please feel free to reach out if you need any advice about the neighborhood.

Paul

Great advice everyone, thank you! And Merry Christmas!