All Forum Posts by: Rikako W.

@Wade Garrett  Thanks for the advice! Did you sign any lease with them between the time you closed and you notified her of the rent increase a month later? And the rent increase won't take effect for another 30 days, right?   I'm just trying to understand the logistics of all of these.  

@Michele Fischer Thanks for commenting!  It didn't even occur to me to offer a M2M lease, so that's interesting. (I've been a renter myself and signed only yearly leases.) M2M would definitely give us flexibility while we try to upgrade and get our bearings on being a landlord. I think the tenant may leave if we raise it by $150 now and we'll be faced with vacancy over the holidays... we might do this slowly. 

@Michael Boyer Thanks for commenting! Great advice on scheduling a meet and greet,  and a follow up meeting to do paperwork.  For some reason I blindly assumed that we have to execute a new lease with them as soon as we close.  We've gone into their apartment twice now (during buying and home inspections), and they seem to take care of the place well. 

@John Errico Thanks for commenting! It's on 24th St, close to New York Ave. your story of the tenant signing a lease with another tenant is absolutely horrible!! I'm guessing you got rid of your second floor tenant? This is our first time buying a property, renovating the place (planning on doing a lot ourselves), and managing the tenant. It'll definitely be a lot of work and stress!  I've been wanting to come to Hudson County Meetup... I'll make it to the next one!

Thanks so much everyone for responding! I have a better idea of what to do... I think we'll offer a new M2M lease with $50 - 100 increase. We'll do upgrades in the mean time, and raise the rent to market next May or so. By then hopefully the upgrades are obvious that they won't say the increase is unconscionable. It's probably better to explain this and set their expectations during the first meet and greet? 

It's only one tenant, but we want to do this right... it's better to be safe than sorry. thanks for great advice. 

@Jim Sakalis thanks for such a quick reply! I do think #2 makes sense, too, but I just don't want to be seen as unreasonable in any way.  I can definitely see that it's month-to-month lease for sure. Just can't read the date or their full names!  Thanks again for your comment.

We are a few days from closing on our first deal! We'll be house-hacking a 2-family detached house in Union City, NJ, about 12 min bus ride from Manhattan Port Authority.  We are inheriting an existing tenant who is paying below-market rent.  They are on month-to-month lease and paying $1150/month.   After visiting other rentals in the area, I think market value is conservatively $1450, if not more.  It's 3 br, 1 bath, and has pretty generous living / dining area. Bathroom could use a renovation but otherwise it's in a pretty good condition. 

We are closing next week Oct 17, and in NJ we have to give 30 day notice to raise the rent. I have questions / concerns of how we should approach this. Which one of the following scenario is the best? Any advice is greatly appreciated!

Scenario 1:

After we close, let them know immediately that we are raising the rent to $1450 and give them the choice of signing a year lease. Most likely they will move out, and we have to find new tenants with a lease starting Dec 1.  (I don't know if it's hard to find qualified tenants in winter in Northern NJ? any inputs?)  We might take time to renovate the bathroom and rent it out starting Jan 1.  

Scenario 2: 

Offer a 6-month lease from Nov - April at something like $1200, and then raise it to $1450 (or more) next May. This way we will avoid having tenant turnover during holidays. This will also give us time to renovate the exterior siding, add laundry in the cellar (that tenant can use), and freshen the entry area.  

My concern is, if we sign a 6 month lease, and then a 1 yr lease with $250 increase, that is probably considered "unconscionable" according to NJ landlord-tenant law. 

Scenario 3:

just increase to $1200, and keep increasing by small amount ($50/yr) every year. We are limiting our income and obviously we want to avoid this. 

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The seller's 1-page lease is hand written and it's so illegible that I can't even read the date on the lease.  So I don't know how long the tenant has been there.  We've been trying to get clarification from the seller but we haven't had any success.  

We are super excited to close, but this tenant question is concerning us quite a bit. I would appreciate any suggestions. 

Thanks in advance!

Rikako

@John Errico Thanks again for the detailed reply. I will contact the state of NJ and see if I can find anything about the green card for this property.  The whole issue is so complicated! I didn't know there was so much legal difference between 2 family and 3 family. 

Anyway, hope your situation works out at the end! Keep us updated. Looking forward for the meetup! 

@John Errico, thank you so much for valuable info! that's interesting to know about state and city records of multi family buildings. My realtor has been overly optimistic about this, so it's good to hear the other side. Your story of state thinking 3 fam and the city thinking 2 fam is insane. How do you figure out what the state of NJ has in their records? In NJ, is there any way to publicly view the certificate of occupancy? (in NYC it's easy to find C of O).  I think we just won't be able to close without settling on 2 fam / 3 fam issue.  I don't think we should buy the house if it can only be 2 family, because duplex of 1st fl and basement won't bring in as much income as those being separate units. When you said you are in the process of buying a property for 8 months, is that mean you passed the attorney review but haven't closed yet, because of this 2/3 fam issue? you are scaring me :p

there are 3 gas meters and 3 electrical meters. I didn't see water meters, but there is only 1 water heater, so i guess we'll be providing water to all tenants. There are only 2 boilers... hmmm. 

please send me info on union city meetup.  Thank you!

hi everyone!

I'm jumping into this thread about Union City. My husband and I placed an offer on a house in Union City and it was accepted yesterday! It's a 3 family house and we will be living in one of the units (house-hack!) This will be my first deal ever.  With all that studying, listening to podcasts, and reading BP forums, I'm finally jumping in. I would love to connect with all of you investors in northern NJ and hear your stories. 

Our plan is to live in it for at least a year (we are using FHA financing) and fix it up while we live there. I'm hoping to repeat this process and acquire many more.

the tricky thing is that the house used to be a legal 3 family, and the current owner remodeled it into 2 family (basement and 1st fl are duplex). My agent thinks we can turn it back into 3 family without that much issue. There are 3 separate meters for gas & electricity, and there are windows and separate entrance for every unit. Our attorney is writing that the contract is contingent on the seller providing proof of 3 family. I actually went to the Union City Building Department today, but they couldn't tell me anything because there are open permits that the seller has to close first. The numbers don't work unless it's 3 family... so we'll see! 

I wanted to ask if I'm missing anything from my expenses. 

• Principal, Interest, Property Tax, Insurance, PMI
• Water (does everyone provide water to tenants?)
• Trash (is there any fee for this?  Is there anything else that's utility related? heating?)
• Maintenance & CapEx (i'm putting 10% of rent)

I'm not counting vacancy or property management, because it just does not cash flow at all if I count 10% for each. Are people finding deals that would still cash flow with vacancy and property management, in northern NJ? This market is so tough!

thanks in advance!