All Forum Posts by: Sean Autry

Thanks for the additional comments, Jon S. . Can you clarify the comment you made about rental Neighborhoods? I've been focused on MF, which are primarily in rental neighborhoods. What is it about those places I should be avoiding?

Michele Fischer , great feedback. You're right, we could probably start new tenants on a more frequent inspection up front and then taper off after some good inspections.

I'm 11 months into my first rental (triplex), and so far I've experienced: -2 evictions (inherited tenants) -a roach infestation -thousands of dollars in damage to one unit -likely more $ in damages to come Am I deterred from buying more? NO WAY. But here are some lessons I have learned: (1) I considered pest control when I bought the place, but went the cheap route and decided it wasn't necessary. BAD MOVE! Trying to save a measly $400/year or less in pest control is now costing me several hundred $ plus more vacancy time while the situation is rectified. (2) there's no room for sympathy. Bad tenants will come up with every excuse in the book to delay the inevitable- eviction. Come up with a strict eviction process and STICK to it. From now on, 3-days are sent the day after rent is considered late, eviction starts once the 3-day expires unpaid- no exceptions. (3) if inherited tenants are problematic and do not meet your tenant screening criteria, terminate the lease and replace them. Don't delay the inevitable. (4) collect the maximum security deposit. This will weed out crummy tenants and also give you more security if things go down hill. (5) perform regular walk throughs! You need to respect your tenants space and privacy, but you also need to make sure they aren't trashing the place. If we'd done quarterly walk through we would have caught the infestation before it was an infestation. (6) don't be afraid to bill tenants for damage that THEY have caused. Put it in your lease (if your state allows it; not even sure if mine does) that unpaid repair bills will result in termination of the lease. This way (a) you can avoid footing the bill on expensive repairs, (b) even if they don't pay- they are likely to continue to cause more damage so you can at least get them out and prevent further expense to you. I have a ton more to learn, but these have been my biggest takeaways in year 1. For the pros/veterans out there- I'd love to hear your thoughts on these. If you have anything to add, advise, suggest, or clarify- I'd love to learn a little more and avoid some other pitfalls.

Kristina Heimstaedt , Christine Swaidan , @nick G, thanks for your feedback. This is our first rental, and like you said Nick, the tenants we had to evict (inherited tenants) destroyed it and have wiped out at least a year of profit. I want to stick to the 2X deposit, but wasn't sure if many have had success with that in lower income areas... like many things, sounds like there's diversity in practice. Given this latest experience, I think we'll try the 2X and see how it goes. I don't want it to sit vacant forever, but I also don't want to go through this nightmare again...

Christine Swaidan , Kristina Heimstaedt , thank you for the feedback. Can I ask in what areas either of you have rentals?

Jo-Ann Lapin , great advice. The rental is actually up in Apple Valley, CA so I could reach out to the real estate association up there. I am also still interested in hearing others' experiences if anyone has any to offer.

I'm curious what others are charging as security deposits in C-class areas. California allows for 2 months rent (security deposit) + first month's rent up front. Are other landlords in these areas asking for what amounts to 3 months up front? If so, do you have trouble finding tenants that can come with this?

Looking at your post again- $22 additional cash flow isn't a game changer. I'm in CA where a half point rate savings equals hundreds of dollars a month in future cash flow (hence my premature answer)... If the extra points to pay it down doesn't hurt too bad- I'd still say buy it down. But if you can put those funds to work in a new deal, I'd say don't sweat the $22/mo; put the funds in a new deal. Sorry for flip flopping - maybe I should have been a politician.

If you feel very confident that you'll hold it longer than the re-coup period; then buy down the rate. Rates won't be going lower anytime soon (not materially). If this is a long term play- buy it down and appreciate that you did for years to come.

Aaron Mazzrillo , there's no question you've got the SoCal market figured out. I've seen a lot of your posts. They give us SoCal rookies confidence that it can be done. But a few questions: Are your recent purchases in CA multis or SFR? Are they cash flowing (the properties you've bought this year)? Large cash outlays to acquire (and make them cash flow)? Finally, what areas?