All Forum Posts by: Jennifer T.

Hello fellow BPers--

I am moving out of state sometime over the next 6 months and am selling my New Orleans rental portfolio. I am also open to selling properties individually. They are all in good condition. They are all fully rented out at/near market price to great tenants. All tenants are on month-to-month leases, except for three units with Section 8 tenants. Three duplexes are in the Algiers neighborhood. The other duplex and the one SFH are in East New Orleans. All properties are in an X Flood Zone. All tenants are responsible for their own utilities (water, sewerage, gas, electric). Square footage is approximate.

Algiers

1616-1618 Elizardi Blvd and 1622-1624 Elizardi Blvd, New Orleans, LA 70114.  $478,700 for both.  Total monthly rent for all four units is $5,171/month.

These two duplexes are next door to each other.  They were fully renovated in 2020, including a new roof for 1616-1618 Elizardi Blvd.  Each of the four units is 3 bed/2bath and 1100 square feet.  Three are rented at $1,300/month and one of those is Section 8.  The fourth one is also Section 8 and rented at $1,271/month.

1212-1214 Casa Calvo St., New Orleans, LA 70114.  $204,800, total monthly rent is $1,950/month. 5 bed/2 bath total for property.

This duplex is less than one mile away from the Elizardi duplexes.  Both sets of tenants have been living there for over 5 years.  One unit is a 2 bed/1bath and the other unit is a 3 bed/1bath.  Total property is 1,900 square feet.

East New Orleans  

13501-13503 N Nemours St., New Orleans, LA 70129.  $199,900, total monthly rent is $2,250/month.  6 bed/3 bath total for property.

This duplex is across the street from the field for Einstein Charter school.  The units are different sizes.  One is a 2 bed/1bath and is about 850 square feet.  It is rented by a Section 8 tenant at $950/month.  The other untis is 4 bed/2 bath and is about 1150 square feet.  It is currently rented for $1,300/month.

14555 Duane Rd., New Orleans, LA 70128. $127,500, currently rented at $1,350/month. 4 bed/2bath single, family home. This SFH was largely renovated and had a new roof installed in 2021. It is 1200 square feet.
 

Please contact me for pictures, questions, and showing appointments.

Jennifer Tornus

Cell:  504-250-2222.  Email: [email protected]

I had a similar issue with two duplexes next door to each other (I own both).  Both tenants in one duplex complained about noise from the other one.  But the complainers were also both high maintenance tenants, that I wasn't sure I believed that it was as bad as they claimed.  Both sets of complainers also refused to call the police and I know one of them also never bothered talking to the other tenants.  I have a lot less sympathy in those circumstances.

I did post a Cure or Quit notice on the other two doors.  But I also warned the complainers that there is no way I would go to eviction court, unless I had proof that the other tenants had violated that Cure or Quit notice.  That proof would be date/time stamped video or audio recordings.  Or police reports.  Because I can't go to eviction court based on hearsay from other tenants.

Main Complainer sent me a video where a Duplex #2 tenant was speaking outside on their phone, I assume in a normal voice, at 7:30pm.  I couldn't hear the sound of the woman talking, only that she didn't appear to be angry.  Are you kidding me?  This tenant had previously always complained about screaming arguments outside.  But then that was the "smoking gun" the video/audio she sends me.  Right.  I politely told her this didn't violate the Cure or Quit notice.  People are allowed to have normal noise level conversations when they are outside.  But I encouraged her to send me other videos when there was loud noise, whether screaming voices or loud music.

Never got another video/audio from either tenant and about the other duplex and they also both stopped bugging me about it.

Ironically, I did get an audio recording from Complainer #2 about Main Complainer, she lived in the same duplex as.  Main Complainer (MC) was screaming at the top of her lungs, because Complainer #2 had closed her door too hard.  The recording was only a few minutes long but the tenant who sent it said MC had been going on like that for over an hour.  It was just funny that MC ranted on all the time about how rude and loud everyone else was, but she turned out to be the biggest problem there for upsetting the other residents.

To be fair, it's possible they bought some things.  Possibly all, though that's not likely, especially for the chandelier.  

When I buy a property with existing tenants, I include "which appliances belong to who" in my estoppel agreement for exactly these reasons.  I don't want people taking appliances that probably belong to me, because I can't prove otherwise.  Hence, the estoppel agreement is my proof.

Or, on the flip side of that, thinking the seller is including all the appliances when some of them actually belong to the tenants.

A few years ago, I went to view a house for a fix and flip.  Good bones and a nice neighborhood, but the house was very dated.  A mix of 70s and 80s styles.  The master bedroom was very large.  Against the wall across from the bed, there was a hot tub on a platform.  High enough there were 2-3 steps.  The entire area around the hot tub, including the steps, had the same mauve carpeting as the rest of the room.  It was a sight to behold!

We passed on the house.  Not because of the bedroom hot tub, though that didn't help.

@Jerry W., I have a similar story. I had a tenant, also short on rent, who called that she didn't have any hot water.  My husband and I were about to run some errands, so we decided to swing by her property first.  On the way there, she calls me back that the heater won't come on either.  Mmm...hmm.  Those are the only two things in the house that run on gas.  Where we live, gas and electricity are on the same bill.  I ask if her electricity is on and she says it is.  I wouldn't have thought that utility would keep the electricity on, but not the gas, so we continue on to the property.  Apparently I was wrong.  We get to the property and immediately see the problem.  Her gas meter is gone.  We tell her she needs to pay her bill and then call them to have the meter brought back.  She calls us about 10 minutes later asking who the gas company is and who does she need to call.  Wow.  Has she really never looked closely enough at her electricity bill to see the whole section for gas?  At any rate, we told her to call Entergy (electricity company), because they also handle gas.

I'm the same way.  I don't mind someone asking.  Some people like to negotiate and I'm not going to fault them for trying to get the best possible deal.  But I've never done that, because my rentals are usually priced correctly and even a bit below market.  There is only one time where I lowered the rental amount because I wasn't getting much traffic.  Though I did that on my own, not because someone asked.

However, it can quickly turn into a red flag.  For example, sometimes people will tell me they can only afford $X.  Don't mind the ask, if it is in the ball park.  But there have been a few times when I said I wasn't ready yet (but would contact them if I did lower the rent), that they suddenly want to apply or come for a showing anyway.  I'm not going to say "no" to either of those requests, but I'm not going to rent to them either after they literally told me they couldn't comfortably afford the rental amount.

Or every once in awhile, someone will ask for a discount because they think the house is priced too high.  I usually reply that I analyzed the market before setting the price and I think it's fair but, if I decide to lower it, I will let them know.  But then still want to come to a showing.  We do open house showings, so it's fine if they want to come.  However, same thing. I don't want to rent to someone who is going to be unhappy from the first day because they think they are overpaying.  

I agree to just wait until closing and then give the tenants a 30-Day Notice to Vacate yourself since closing is only a few days away anyway.  But if you give them a Notice to Vacate, you can't ask them to put utilities in their name or pay you a security deposit.  Those would both be items that, in order to enforce them, you'd need to give a 30-Day Notice of what are basically lease term changes.  However, if they are given a notice to vacate, the hope is they will comply and be out within 30 days anyway.  You can still collect their share of the utilities because that is part of their current agreement.

When you inherit tenants, the security deposit starts fresh anyway.  You know the condition of the home when you buy it.  The only way you can deduct damage from a security deposit is if it is tenant-caused damage that happens after closing.  I'm not saying that's the law or anything, but it's common sense because you have no way to know what the unit looked like when the tenants moved in.

I hear ya! There was one time I bought a house with an inherited tenant and her SD was only $300, even though her rent was $1200. But I took that into account with my offer. My thinking was, "I have the potential to be out $900 if this tenant skips out on rent because the seller collected such a paltry SD. Is this deal still worth it if that happens?" It very much was, so I still bought the property. She was my tenant for three years and was pretty negligent in the way she cared...or I should say didn't care...for the house. The additional damages she caused after I owned the house far exceeded her $300 SD. But, even despite that, it's the best ROI property I've owned.

Just make sure to look up and be familiar with the NOLA's rules to get a STR license for a property. I don't think they are allowed at all in the French Quarter. For the rest of the city, you pretty much need to be an owner-occupant who lives on the property. Though there are some exceptions for mixed-use properties. It's been a few years since I looked at it, but I don't think much has changed. There was a lot of local anger about STRs and votes from the masses are all City Council members care about.

I supposed it isn't a bad one for the right situation.  But there will be some obstacles.  Your credit score, credit history, and income would need to support a 'cc with a 5-figure credit limit.  And keep in mind that, while there are a lot of 'ccs with special low financing when you first open the card, that's usually only for balance transfers and/or purchases.  Not cash advances, though sometimes you'll see that.

A high credit utilization is one of the biggest things that will tank your credit score.  When the 18 months are up, your credit score might not be good enough anymore to get a card with a limit that large.  So now you are stuck paying a high interest rate for the balance that is left.

Plus things go wrong all the time in real estate.  A tenant stops paying.  An unexpected major repair is needed.  Don't ever overleverage yourself so much that one more apple on the cart will send everything crashing down.

If I was going with a 'cc strategy, I'd want to gear it more toward using the 'cc to buy the property quickly.  But then getting a refi loan.  Two problems with that is the value might not be high enough to get a loan.  But, once you have a few low value houses, you could do a portfolio loan.  You also typically need to have a property "seasoned" to get a refi loan, which means you've owned it for at least 6-12 months.

A similar strategy but with less risk is if your own home has enough equity to get a Home Equity Line of Credit (HELOC). You will pay interest right away for whatever money you take out of it, but it will always be at an interest rate that is only a little higher than a typical owner-occupied mortgage. For example, the current rate on my HELOC is 5.3% and that is actually on the high side.

Make sure you get copies of the leases and, even better, estoppel agreements that are signed by each tenant and the property owner.  You don't want to close, only to find out the seller had lied to you and both tenants are at the start of a one-year lease.

I wouldn't even offer for the tenants to stay.  I would give them a Notice to Vacate after closing for whatever the appropriate timeframe is where the rental is located, ie usually 30 days.  Or, if you want to be a little kinder...though they still won't appreciate it...allow them a longer time, but still post the notice right away for the amount of time they will have.  And give them flexibility.  If they want to move out sooner than the notice you gave, let them with no financial repercussions.  You already know they can't afford the rent, so don't try to kick that can down the road.  But, even if they could, they would be upset and resentful.

I was in this situation two years ago when I bought two duplexes next door to each other and 3 out of the 4 units occupied at rents of $500/month when they should have been $750/month.  That was the market rent for the deplorable conditions I bought them at.  Fixed up, they now rent for $1150/month.  

When I gave everyone notice, I mentioned the building needed major renovations that would not be possible to do with people living there.  Which was true.  I figured that would be an understandable reason for them, but they loathed me anyway because I'd stopped the gravy train.  Not surprising, even if it isn't logical.