All Forum Posts by: Christopher B.

You've cracked the lid on pandora's box and need to get that shut real quick imo. In your lease it should be clear that the tenant is not allowed to make changes to the property without your explicit consent. In short, no. Don't oblige them or even act like you're entertaining all their requests and make it clear that you've provided a nice, functional home and it will stay as-is. If something breaks or honestly needs replaced/fixed then do it. They don't get to add luxuries and send you the bill just because they want them. I'm a bit annoyed for you right now. Sometimes you give a little, yes, for example I had one tenant recently ask if we could add 2 plugs in the garage at his expense because he is getting into building small furniture. I obliged and sent my electrician out. No cost to me, improves my property, being done by my electrician, and the tenant is happy. Another tenant asked if they could get a 2nd dog, we only allow 1 pet, I said sure and I'll even waive the $250 pet fee for it when you renew your lease. I did this because they've been good tenants and we'll probably have to replace the carpets when they leave anyways. This is a small incentive to keep them there another year and will be cheaper than a unit turnover,a win-win for both sides.

The point is don't let your tenants try to press you for things constantly or control the situation. Lay the law down when you sign the lease and stand firm the first time they come at you with something like this. You don't want to constantly be spending your time and money working for them. Also, absolutely not on the garbage disposal. Those things can be a maintenance headache. I have one remaining unit with a GD and I told the tenant when they moved in that if it goes out we wont be installing another one because they break a lot, their answer "ok, totally understand."

What's wrong with a slope? They're good for directing water away from the house. If you don't want a steep slope why don't you just bring in a couple of guys with shovels and a load of topsoil to reduce it to a more gradual slope. Should be cheap, quick,and keeps good drainage away from your foundation.

That's a pretty big question to answer. Based on how you've structured this question I'd suggest that you focus on increasing your financial literacy first and foremost. BP is great but I'd suggest starting with a couple books on the basics of finance and investments in general. Essentially you need to understand how money works. Just like building a house,  you have to start with a solid foundation. As your knowledge increases the puzzle pieces will become more clear.

Knoxville stinks, wouldn't come here 

@Manolo D. You sir are a gentleman and a scholar. 

I'm liking your perspective and it makes a lot of sense. I wouldn't consider myself a micro manager but I am quite detail oriented. Too often I find myself tightening the screws so to speak on the little details of my projects and thinking to myself, "I'm spending $xxx,xxx on this rehab and I'm still standing here doing this!" Honestly, just this week I've found myself doing numerous things that has made the idea of bringing on a crew very appealing. 

I'm an open book so it doesn't bother me at all. I've had 2 employees. The first employee I hired to be my in-house PM.  I probably brought him on a little early but we both saw the opportunity and jumped in the boat. We would have been very successful together but it didn't work out. There were a few contributing factors but mainly he was going through some personal issues from his military days and decided it was best to leave. We still maintain a good relationship today though. My second employee was a carpenter. Not overly experienced but 100% trustworthy and handled a lot of the little details like light carpentry and trim work, deliveries, punchlists, etc. He was a great help to me while I struggled through some injuries from a couple accidents and appreciate him immensely. He took a higher paying gig. We still have a good relationship as well.

The biggest issue for me was that I had to spend time each evening/day coordinating things for them, sending them here and there, etc. I'm a bit of a workaholic but when I started my business I wanted to build more of a lifestyle business, not sit in my office and handle employees 40hrs/week. I'm afraid employees will serve as a ball and chain on me.   

@Manolo D.  Awesome info and feedback. Your suggestion makes a lot of sense and reinforces what I've been thinking as well. The only downfall is I'll have employees. I've really wanted to structure my business to not have a bunch of employees and maybe that's just not in the cards. In your response to Stacy you mention most investors should have a PM. For someone like me that wants to be around 15-20 rehabs per year what's your take on just getting my GC license to pull permits and then hiring an in-house PM to manage the projects and subs? I know it wont eliminate sub headaches, costs will be higher, etc but I wouldn't have multiple employees. It sounds nice but I wonder if I'm missing something.

Thanks for the feedback Tim

I'll do 7-8 projects this year but only because I'm choosing to not take more. A lot of my projects have rehab budgets over $100k, with the rest over $50k. So not huge volume but decent sized projects. I calculate that at Just 12 projects per year it makes financial sense to have a four man crew. I've never wanted employees and am concerned about keeping up with them, managing them, etc like you mention. I have a lot of good subs except a solid carpentry crew/gc, the one crew I can't seem to build a long-term relationship with. I provide consistent business, work to stay organized and ahead of my crews, and always pay promptly. I 'm working with a good GC now on a couple projects but am still handling the other subs myself. He wants 40% of my profit to take over full management of my jobs though. It's either hire my own crew or an in-house PM and let them manage the subs but I still face the issues of getting  my permits pulled. 

I just don't enjoy managing projects anymore and am looking for the best way to remove myself from that role. If I can do it without a bunch of employees I'll be all over it. 

I see. Well sounds like you got it resolved. Sry for the bad tenants. 

Lesson learned, make sure all lights have working bulbs when they move-in and charge them a cost for each bulb that no longer works when they move-out. Put this in your contract and cover it during the lease signing. We screen pretty well and cover all these items thoroughly during lease signing and thus have never had any major issues. We also leave the property inspection form with them for a few days after move-in so they can write anything down they may not notice during the initial walk through. Be fair here and make sure you notate anything they point out that is relevant because this is the first time the trust between you and them is tested. Use this opportunity to show that you will listen to them and be fair in your dealings. Not all landlords and especially the mom and pops don't do a good job of managing their properties.

 Think of a tenant as a pet, if you train them properly from the beginning both their and your lives will be much better for it. It's all about establishing those expectations on the front-end. 

I also have a garage that sits under an apartment on a 3 unit property for storing items I buy for current rehabs, valuable salvaged materials like heart pine flooring, etc. I bought some shelving units and organized the entire space, it can be handy I wont lie. Saying that, you should be very careful about getting caught-up in saving a bunch of materials, it's just not going to be worth it in the long run. People will call me every once in awhile, "hey HD has vanities for $50 off, do you want to buy a bunch and store them?" or my favorite "do you want to save this 3/4" OSB, we only used half of it" No! The time to go buy them, take them to storage, and then get them from storage to the job site eliminates the savings and creates a bunch of hassle. I wouldn't have 1/4 as much as I do if not for some injuries that resulted in bad material management last year. I am working through my garage now with plans to be very selective to the point of storing essentially nothing moving forward. It's just not worth it unless you've got your of construction firm or manage your rentals in-house.