All Forum Posts by: Raquel D.

Hey BP,

It's been some time since I've been active here, but I have a 4plex in the MN suburbs, and I need a property manager with experience managing small multifamily properties.   Based on past conversations, it is hard to find someone adept at that niche.

The 4plex has a parking lot and large yard, and I pay for mowing/snow removal.  There are common hallways/stairwells and a laundry room with coin-op washer and dryer.  

Over the years, there have been many issues with tenants not being respective of common areas, like leaving stuff all over the lawn, not moving vehicles in wintertime, etc.  I have a tenant getting credit for cleaning hallways, but the tenant is inconsistent.  I've only been a landlord a few years so I'm pretty green at dealing with issues.

I am finding that a lot of property managers either only know how to manage SFHs (which is much different because the tenants pay all utilities, take care of lawn/snow, and have the whole place and yard to themselves) or only manager larger apartments so they won't deal with a 4plex.

What are some of the questions you would suggest to ask when screening property managers to figure out if they can manage this type of property?  Looking forward to any guidance/expertise!  

Bonus points for any recommendations for a property manager who serves the SE metro area of MN!  Thanks, all ~

Raquel

I have an update!

Regarding the 4plex I was renovating, I spent a little more than intended, but I did stay the course, finish the rehab, and it is now fully occupied.  I hired a PMC to take care of placing tenants, and there is currently a problem tenant, but the numbers are fantastic and hopefully repairs will be minimal in the upcoming years.

Regarding the other 4plex, a tenant left and I started doing little updates to the unit so I could rent it for market rent - but I wound up taking a hard pivot and decided to sell.  In the year and a half since I had gotten it, the market has gone up a lot, so it financially made sense as I would still turn a profit.  Logically, it would have been best long-term to renovate unit by unit, raise rents, and get it cash flowing like the other building - especially since much less was needed to renovate/update each unit -  but selling it felt like the right thing to do at this moment because I'm not actually ready to scale back on my full time job, and I don't want to embark on another series of renovations.

The good news is I'm not out anything, and it's been an amazing lesson.   Last fall/winter I was totally overwhelmed, but things are a lot clearer now!  Thanks again for all the great tips and advice, BP.  <3 

I have a similar situation... Man and woman with a young child, and the woman is definitely mentally ill.  They seemed okay at first, but then after one heat issue about 6 weeks after they moved in that got dealt with very quickly, she told the PM that she was sick of "issue after issue" with the place.  

Next, she fixated on the lights.  She insisted the halls weren't bright enough (this is a 4plex with a common area, 2 up, 2 down), so I installed extra motion lights.  (Also, there are additional interior and exterior lights on a timer that go off when it's dark outside.)  When the motion lights weren't enough, I had the PM send a notice to every tenant in the building that they could install a motion light of their choosing and I'd reimburse up to $30.   No takers - not even her.

She sent messages and emails to the PM threatening to sue, saying she had fallen down the stairs multiple times, that her friends and family kept falling down the stairs.  She claimed she messed up her knee multiple times.  I think to-date she's said something like 30 people have fallen down the stairs - including a police officer who she allegedly called because she rents from  a "slumlord."  She also posted notes around the building about how she was suing me.  

After multiple warnings not to fill kiddy pools in the backyard, which is a space for all tenants to share, a lock was placed on the hose and she called the police on me.  The poor officer was so confused... there was no criminal action so there was nothing to do.  (The tenant did actually throw something at my partner, but she missed by a mile and we didn't want to see her get in actual legal trouble.)

She sends long messages to the PM that often start with complaints/threats, turn to apology and desire to make things right, then go back to threats, all in  the same text/email.  She calls the PM really terrible names about her physical appearance.  She's made physical threats to me and the PM on multiple occasions.  

She found my personal contact info and facebook page and started sending me threatening messages directly.  I asked her to stop contacting me.  She still sent several more messages, so if it continues, I could file for a harassment restraining order.

The tenants are also filthy.  They leave trash and personal items in the hallway and don't respond to notices to clean it up.  They leave trash all over the yard.  They have dogs  and don't pick up the poop (my mower almost quit on me over it).  I let them have a grill and they dump charcoal in the parking lot.  

They also have 2 dogs allowed under their lease, and they have a third dog now.

My PM said even with moratoriums lifted, this isn't enough to evict - the trash, the failure to respond to notices, the lease  violations, the harassment - so we got them to sign an amendment to their lease to agree to 8/31/21 at the ending date (rather than spring of 2022), and immediately sent a notice to vacate.  (I'm in MN - would love to hear anyone else's input on this, because  I can't believe repeated lease violations, a third pet, and harassment isn't enough!)

Sounded like an okay result... Except now she is sending threats to the PM again, saying we can't force them to leave.  So I have no idea what comes next.  We haven't advertised the unit for rent yet because  I was nervous that she wouldn't leave.

Good luck with your tenant.  This is such a difficult thing to deal with because on a personal level, I wish this tenant would seek help because she is clearly deeply unhappy with her life.  But on a business level, she needs to go away - I have a PM and I was still spending 3-6 hours a week on her complaints and threats.  

@David Avery  Thank you, that's the kind of feedback I am looking for!  Especially that you've used them in 4plexes.  I found a lot of older posts with duplexes, but having 4 people/families use a machine vs. 2 seems like a very different equation. 

@Jadde Rowe I really appreciate it, I'll contact those companies this week!  It is good to know your experience is that there aren't many repairs, too.  

Hi everyone,

I need to replace a gas washer and dryer at a 4plex in Dakota County.  The units were recently remodeled, and the laundry room is the only thing left to tackle.   Currently there is one coin operated dryer and one washer, both gas, and they are in very poor shape so they definitely need to be replaced.

My question is:  Should I buy a new coin-operated washer and dryer, or should I use a company that would supply the machines and handle service?  

If I buy new machines - any suggestions for reliable but inexpensive units?  The 4plex is newly remodeled and in a decent area, but with the age of the building and size of the units, top-of-the-line appliances don't really make sense.  I have heard good things about Speed Queens.  Whirlpools appear to be an economical choice, but reviews seem to indicate they require too many repairs.   

If I use a company - what are some of the companies around here?  I have heard of arrangements where the company keeps a percentage of the coin income, or of lease arrangements. The attractive factor for me is that they handle service/maintenance, even if it's less laundry income.

I have considered forgoing the quarter machines entirely, but I have another 4plex in Hennepin (south of Minneapolis) that came with a coin washer and dryer, and the amount of income is surprising.  I plan to hold both 4plexes for many years, so if I buy the machines, it seems like they'd pay for themselves in two years if the income winds up being comparable to the other building.

Open to any suggestions - but I'm posting this in the Minneapolis because I'd like to know what are good local options.  (If I buy a new washer and dryer, I would definitely need them installed and the old appliances hauled out, too.  If I go with a company, I'd probably eventually switch the other 4plex to that company and sell the washer/dryer that's there.)

Thanks!!

Hi everyone - 

I realize I never replied to all this - but trust me, I read your replies  right away (many of them 2-3 times) and they really helped me remember why I was doing this.  Thank you all so much, truly.

My number one goal is to find a decent property manager.  Both of these properties were purchased with that being the intent, so they will still cash flow well even if a property manager is getting 9-10%.  My next major step needs to be to interview and hire someone, and I will be  prepared to do that soon.

This IS a long game and even if things aren't starting off right, when the units being renovated finally get rented, this will be an awesome investment to hold for a long, long time.  Same with the second building that has tenants - the numbers still work really well, even with the hiccups.

@Michele Angello - really appreciate being reminded that a lot of the 2020 stumbling blocks aren't typical.  Even finding contractors was sort of hard because I was trying to balance being safe and social distancing with getting walk throughs and having follow up conversations via phone/zoom instead of in person.  Not to mention normal items being out of stock or on backorder!  It sounds like anyone doing any building or renos is really feeling that.

@Greg Scott - thank you for thinking through some options for me.  You're right, I would definitely lose if I sold the 4plex being renovated right now.  And once it's done, it should be doing well for awhile.  The major things that could break are new/newer, the property has great bones, and the neighborhood is really favorable.  For the other building that currently has tenants, I realize that 3 of the 4 tenants are REALLY good, and if I keep them happy, even if I barely raise rents, I'll be doing okay.  (The 4th tenant is a long story, but they are paying me, even if it's always a little late.  I don't think they'll be in there for long, though.)

@Andy Eakes  Your comment about passive income being a long term game REALLY resonated with me - that's absolutely right, I'm doing this for the long term, not as a quick way to make money or as a flip!

@John Warren  I am close to having 2 of 4 units really done, and I think then I'll start interviewing property managers.  You're right about the team, I should have had a better one.  And honestly I thought my GC would be a better source of that, but even though he has subs, he keeps doing a lot himself, like drywall... now I realize I probably should have been more proactive on focusing him and getting my own subs for certain tasks.  It's a hard lesson, but I will know better next time at least.  I appreciate you sharing that you had these big projects and even after all that you're happy to own them.  I know that's what I'll feel like, I was just having trouble seeing the forest for the trees for a while.

@Drew Sygit I really appreciate that advice.  I want to start talking to PMCs soon, and maybe use them to help me fill the building being renovated so I can keep that off my plate.  Despite being overwhelmed, I like the renovations/repairs side of it and learning all that - but I am definitely not looking forward to tenant screening, so if I go with a PMC I feel comfortable with, I would love to delegate it.  (Although I have trouble letting go of the reins sometimes, too!)  

Really, thank you all so so much.  <3

I took the leap and bought two rental properties (4 units each) over the last year.  I have made a lot of mistakes so far, and I know that, and I can't go back and change it - but I'm writing this now because I don't know if I should stay the course, change the course but keep going, throw in the towel, or some other option I can't even imagine.  I'm writing here because I feel like I could really use some insight right now.  I just don't know what to do.

I spent several years learning about real estate investing before jumping in - I read books, listed to the BP podcast and others, and read lots of blogs/forum posts.  My goal is long term passive income, and I love learning how to fix and remodel things. So rentals seemed perfect!

Finally, I took the leap and got my first 4plex almost a year ago.  I had actually been keeping an eye on listings for awhile, but this was the first one where I thought the numbers worked well.  This 4plex - the first I bought - had tenants paying about half of fair market rent for the area.  The building had good bones, but lots of deferred maintenance, including a shower wall leak between 2 units that could have meant water damage between walls, so it was recommended that I get all tenants to leave at once since all the bathrooms needed to be totally gutted.  (Now I know the damage was almost non-existent, so that was a big mistake.  But I emptied the whole building instead of just one unit at a time.)

The contractor bids I got were all way higher than anticipated, so I took on a lot of the work myself and have the GC I hired mostly doing stuff that is way outside of my current capabilities.  He does good work but it's going so slowly - I thought the work would have been done at least a month or two ago, even with some delays due to out of stock fixtures.  

I'm also a big part of the delay.  I work full time and I'm getting run ragged being at the building 25-30 hours a week plus my day job. And I'm slow, so it takes me longer to do a lot of the stuff I'm ding myself.

In the midst of this, a deal came up for a second 4plex that also had good numbers, so I put in a bid, thinking I'd never get it - but surprise, I did! It's a great place, but keeping up with the tenant requests/minor maintenance things, the rehab at the first 4plex, and my day job is really, really getting to me.  (I also got covid, which mean I lost 2 weeks of the rehab work I was doing alone.  I'm lucky my case wasn't worse because I had a family member who was down for 3 weeks.)

Currently, 2 of the units being rehabbed are close to being ready to rent - maybe ready for pictures/ads by mid-October.  But then it means tenant screening, showings, and once they get rented, dealing with more tenant requests while trying to finish the other 2 units.  

I love parts of what I'm doing with these rehabs/rentals, I really do.  I feel so lucky and grateful that I get to learn all this, some days.  But... there's also a lot I don't like, and so much that I'm coming to absolutely dread.  For a long time, I thought this was what I really wanted, but sometimes, I really doubt it. I don't know if I'm just running on empty, or if I'm not on the right path.  

I know the feeling of something being so hard in the moment, but looking back on it, realizing it was all worth it.  Maybe this is one of those situations.  

Thank you for listening - I appreciate any thoughts, any wisdom.  I know I'm lucky to have these problems - but I'm really stuck right now.

@Ryan Hazelwood 35, 8 doors (two 4plexes). I got started last year at 34.

Today is the best time to get started!

Hi everyone,

I have a 4plex in Bloomington, and I was recently told that a tenant moved out without notice and let a friend or family member move in.  Old tenant is asking me about their security deposit; new resident wants to sign a lease with me.  I could really use some guidance/insight on how to navigate this!  I recently got this building so I inherited the tenant and I don't have a set process for tenant screening yet.

For the security deposit - how much do I need to refund in consideration of the following?

• The lease provides a specific 60 day notice period to terminate a lease, which obviously wasn't followed.  
• For damage, I don't know what the damage of the unit is yet, although there were scuffs all over the living room walls when I recently replaced a wall unit AC.  I also know the old tenant painted because they told me - I haven't seen what they painted yet.
• I did not have a period of nonpayment since the person they let move in paid this month.
  

Regarding the new residents, they are a very young couple with an infant.  

• I told them if they passed the typical screening process, then we could proceed with signing a lease.
• They tried to fill out a Cozy application but it didn't go through - they think because they have no credit.  (I asked them to fill out only the background check portion instead - waiting on it to be returned).
• They indicated they are okay with with security deposit and rent I specified, and with the terms of a 1 year lease. 

Besides the background check and last 2 pay stubs, what other items do you recommend I request?  

If anyone has any suggested forms, I would be really grateful, too - I was planning on handling this as it came up, but having a tenant unexpectedly move out and swap with someone was a big surprise.

In the future, I probably wouldn't consider a tenant with no credit.  But they're already living there and we're in the midst of a pandemic, so I'd like to make it work, rather than forcing them to move out, as long as nothing else that's a total dealbreaker comes up.

Any tips and suggestions are appreciated.  Thanks so much!

@Jason D. Is the distinction if you're transferring a home without consideration, but there is a mortgage balance, then transfer tax is due on the outstanding mortgage balance?  

(Otherwise I take that to mean the recorder only collects transfer tax if a property is sold with a mortgage - but I'm assuming the recorder wants to collect that tax for every sale for actual purchase price, not just a mortgage balance!)