All Forum Posts by: Amy A.

First off, I admit that I know very little about Memphis and the purpose of the post isn't to trash Memphis.  I read on many posts and hear on the podcasts that Memphis is the greatest place for cash flow.  However, I've been "shopping" on Loopnet for a while and see hundreds of very cheap units listed there.  Many properties have high vacancy rates and need extensive renovation.  If Memphis is such a great area to invest in, why aren't investors snatching up these units and renovating them like they have in other parts of the country?

I won't bother looking at property in certain cities that have code enforcement officers on a power trip.  Some people can't handle a little power and it goes to their head.  I've seen in the files "dirt on steps" and "bare light bulb in entry" as violations.  Another CEO is known to make people tear stairs out of 100 year old buildings to make them conforming, when there's no room to do so.  The owner has to extend the entry to make the stairs fit!  We have enough drama dealing with tenants, no need to have more!

The $1000 is pending in my account as of yesterday, as well as my husband's for his engineering business. Every little bit helps!

A while back I looked at a package in Macon on Loopnet that sounds similar to what you're talking about.  It seemed like a great deal, but I looked up the sex offender registry and there were many on that street.  I worried that it would reduce not only the rents but also the pool of property managers who would be willing to work there.  It's another factor to investigate as you analyze the property.

I just made an offer on a house I could flip or rent. I assumed an ARV at 20% lower than it would have been in Feb. I'm also not depending on a hard money loan. I'm guessing that the market won't go down that much, but having a large margin for error made me feel comfortable making the offer.

I'll add to the input above, that the Wall Street Journal just had an article (Friday?) about how many people are looking for dogs during the quarantine and shelters have long wait lists for those who want to foster dogs.  Therefore, you don't have to feel bad about the dog not having a home because there are plenty of other people who would love to take it.  

It stinks to be the "bad" guy, but if you let them get away with this it'll only get worse.  You don't want to be the "cool" landlord!

You have been given some excellent advice above, so I won't repeat it.  I want to add that it can be very difficult to get a tenant and landlord to sign estoppels.  I've been burned by trying to get these at the last minute and it cost me when the tenant didn't sign before closing and the seller gave me a much lower deposit.  I've even had commercial tenants sign for the wrong amount (when I finally got them to sign) and then at the last minute say, "wait, my deposit was higher" and we had to recalculate the amount due for deposits at closing.

The bottom line is that your issue is a common problem.  Not many properties that have been managed well, are in great condition, and cash flow smoothly are for sale.  Expect the first apartment turnovers to be expensive, but once you've standardized your paint colors and "hardened" the unit for the next tenants you will find it much easier.

I purchased one property at $520,000 below asking price.  It was priced too high, but the sellers probably could have made around $200k more than they did.  I included in my Letter of Intent the reasoning for the purchase price.  I was shocked when they accepted!

One thing that I've learned over the years is that if you have taken the time to analyze a property and the realistic purchase price comes out way below the asking price, you might as well take a bit more time to make an offer.  A few years ago I went to an auction preview of a former nursing home about an hour away.  I have a good relationship with the code enforcement officer in the city, so he joined me for the tour.  He didn't see any problem with my plan to convert it into apartments. The bank was owed about $1.2M.  I did the analysis for turning it into normal rentals by combining some of the rooms.  It turned out that the most I could bid would be about $650k.  Since the auction wasn't advertised as "absolute", I didn't bother driving the hour to attend.  Only one guy showed up, and he got it for $170,000!!!  

I'll never make that mistake again!

If she pays the rent and keeps the place in good condition, she might be the best tenant you can get in a "D" neighborhood.  Does Tenant Cloud offer a means of communication?  If so, you could tell her that all service requests must be made via tenant cloud.  Otherwise, don't respond or give in to demands and she might stop.  Also, I once had a tenant a bit like this.  She was terrible to me, but respected my husband.  Maybe you could try having someone else correspond with her and see if it works (but don't give out their number!)  It's also nice to have somebody in your life you can share this with and keep a sense of humor!

This is in addition to the good advice you've had above.

Happy Easter!

That's a great list and all very true!  

Since you asked, here's what I'll add:

  I totally agree on the toilet and seal, but replace it with a Niagara or something similar that doesn't have a flapper.  A lesson from a $700 water bill from a 3 year old toilet.

Buy decent faucets, the cheapest ones fail quickly.

Standardize your paint color and use a professional paint store, not a big box store that makes it differently every time.

Use plastic flooring products.  No carpet, hardwood (unless it's already there) or cardboard/laminate.

Don't rent to smokers.  Even if they swear they'll never smoke inside, they will, and will drive your other tenants nuts and it's expensive to get the odor out.

Get your tenants to pay online so you aren't chasing the rent check.

Be direct with tenants.  When they violate the lease, tell them in as few words as possible.  State it as fact, not in an angry way, send them it in writing as well, and follow through with any consequences you've promised.  Ignoring it or trying to be nice won't make the problem go away.

When you have a bad day, remember that this is worth it in the long run and don't give up!