All Forum Posts by: Peter Falk

I didn't catch if your tenants are mo. to mo. or set term lease.  If it's a set term lease, you are stuck with the terms until that term expires, but agree with giving them a heads up on a rental increase to budget for.  When I do a big rent increase, I give examples of similar rentals (hopefully you can find some nearby) and if you want to charge a bid under for the first year, you can let them know they can shop around, but don't think they can find anything better for the same price.

You can also explain that you had to buy at current market value with a mortgage and taxes at that rate as well, so need to obtain market rate rents.  I'm sure they won't be happy, but should at least understand your position.

I also agree with checking for any local apartment associations or landlord groups you can join and learn/connect that way and see who locally can help.

I'm in Madison, WI which is an expensive market for WI- while nowhere near CA prices.  However, I'm sure trends hold where you usually see single family home prices just too competitive among owner occupants wanting them to really cash flow on a rental basis, so typically give the advice if you want cash flow to go with a 2-4 unit (if you want to stay with residential loans) and in our market do still see stable long term appreciation.  However, I know investors as well who bought anything that broke even and let equity and rents build over time and if you can afford that scenario and have a long time horizon, odds are very good of long term success (would think unless you buy in a neighborhood that turns from B/C to D/F/warzone over time, so also like the general idea of going with the best neighborhood you can afford and stay out of really bad areas unless you want to focus on that market niche and deal with more tenant issues-collections, turn over/evictions and also would not put a lot of faith in third party managers handling that amount of work well, and consider any places that look great on paper if you want to self manage and be much more hands on.

Sec 8 also does a property tour and flags various safety issues (confirming smoke, co alarms, etc) so could get an advance list to make sure items are all done or you have no concerns about passing the basic inspection before getting too far down the road with an interested sec 8 tenant.  I also fully agree that you need to screen on housing history, etc. and just view Sec 8 voucher as their partial or full source of income, but make sure they are qualified in other areas of your screening as there may be issues aside from making the rent payment. 

Not knowing the offer/inspection contingency terms, would generally seem that if you don't want the property due to these items, it would be time to give the seller a notice of defects you object to and if they have a right to cure in the WI Offer, they can agree to fix those items before closing and move along or tell you they won't fix them and the deal is dead (or if they weren't given the right to cure defects, the deal would be dead) but again, would need your agent knowing the terms to discuss with you or an attorney or advice from both.  If you have time on your inspection deadline you can also throw out an Amendment to the Offer giving other options for the seller to consider (seller credit, lower price, more time for further repair bids, etc) if you do want the property if these items are addressed (also assuming the seller didn't disclose any of these items to you, although an old roof is usually pretty obvious and just worked into the offer price up front).

It is confusing for a plumber to offer no repair solution (is it a broken sewer main outside of the house that company doesn't deal with, etc) so sounds like that may need more getting looked into.  If other items drain though, it seems the washer may just be broken and the toilet a stand alone issue?

Also could see who is developing the closest new subdivisions and see if they'd have an interest.  If municipal sewer and water isn't close enough to connect, that will force bigger lot sizes for for well and septic. 

I agree with just calling the municipality.  It sounds like a rural area, so likely one person handles all the zoning, variances, etc. so can learn a lot with one call.  Some GIS maps will overlay wetlands and floodplain areas, as that will likely impact your buildable areas and a place to start too.  Sounds like a spot that would interest people with boats they are willing to tow and having your cabins would allow them to tow their boat up instead of a camper.  

FHA also has condition requirements (safety, security, soundness)-no peeling paint on pre 1978 homes, functioning mechanicals, roof with some useful life left in it, etc., so can skip looking at heavy fixer uppers if you definitely want to use an FHA loan.

Also, not sure the plan with your friend helping you out-but if with down payment funds, if loaned, think they'd count that as a debt burden on you or require them to sign that the funds are a gift.  

Perhaps some landlord/tenant attorneys who work with property ownership entities may have recommendations?  I have no direct experience, but a Madison fund I have passive shares in see had some docs drafted by Justin Mertz with Michael Best and Friedrich's Milwaukee office.

I'd confirm FL landlord/tenant laws, but in WI owners clearly have the right with a minimum of 12 hour notice to show the property, so can remind them of the law and showings are a needed part of the sales process (and could discuss working with them on when showings can be done or ask buyers to view the other side first and then the problem side if they have further serious interest).  If they do have an in place long term lease, could let them know that lease transfers to the next owner and they can't modify the terms during the lease (again, assuming that is like WI) and that may alleviate the their concerns.  However, I do agree as well that if their lease is winding down, just don't renew and market it vacant or let them know you won't be renewing to make it more saleable, and offer to let them end their lease earlier if they find a place to relocate to sooner.  Like with buyer showings, I also vastly prefer showing a vacant unit to giving notice and one that is occupied (could be messier, someone home that forgot or didn't get the notice passed along to, etc).