All Forum Posts by: Thadeous Larkin

@John Warren - I was thinking of going this route.  She pays her rent in advance, so I'd have to shave it off of the next rent payment she makes which wouldn't be until December.

Am I being a cheap jerk by differentiating between frozen pipes and non-working oven and dishwasher, though?  The former is a habitability/use-and-enjoyment issue and the latter are features that can be replaced by other means of cooking/washing the dishes.  Which gets to your point about "how much is totally up to you."  I have no idea what would be appropriate, though discounting the rent for the days she has been without them seems excessive.  Maybe half the rent for those days?  I'm willing to take suggestions or be told I'm way off base!

Hey team - Would love your thoughts for this situation:  (BLUF - my tenant has had to deal with appliance issues for almost a month through no fault of her own, and I want to try to make that right).

My tenant let me know that both the dishwasher and the oven in my rental were on the fritz.  It took my handyman a few days to check it out, but he confirmed that I'd either need to do not-cost-effective repairs or just buy new appliances.  It hurts to have to replace multiple appliances at once, but it's the cost of doing business so I decided to bite the bullet and get new ones for him to install.

The oven was a special order (it's a 24" wall oven, none at big box stores in the local area), so I had to order it online.  I'm long-distance, so I'm dependent on others to pick up, install, etc.  The dishwasher is getting installed today, but the people I ordered the oven from are STILL having issues getting it to the house almost three weeks after my tenant alerted me to the issue.  So my tenant has gone almost a month without a properly functioning dishwasher and oven, through (as far as we can tell) no fault of her own.

What would you do for the tenant in that situation?  I'd like to kind of "make it up to her" for the inconvenience, especially because this rental isn't cheap.  "Let her enjoy new appliances" isn't a satisfactory answer, either, since it's important to me that she not feel like she's getting a raw deal.

Let me know your thoughts!  Dazzle me!

We use Dave Holland from Holland & Co. CPAs.  He's busy but solid and knows Real Estate.  

'Sup nerds?

We're negotiating seller-financing for an off-market MHP.  That's cool, right?  Go us!  The only issue is...I have no idea how the nuts and bolts of seller-financing actually works.

I understand the basic concept of seller-financing, so my question isn't like "WHAT IS SELLER FINANCING?"  I mean when it comes to a commercial property, what is the step-by-step of how seller-financing actually works?  Examples of things I don't know include: who do I talk to about payments for the loan - escrow must be involved, right?   Is there any sort of closing - we must need to record something somewhere?  How are the taxes rolled into the sale?  You see how much of a neophyte I am when it comes to this?  Basically, I don't even know what I don't know.

Imagine that I'm talking with the Seller and he says "Ok, great, let's do this 'seller-financing' you're talking about at 10% down and 4% interest.  Now, how do we set this up?"

How do I answer his question?

Anyone with prior experience doing a seller-financing deal (MHP or commercial or really anything), please help!

Thanks!

I was about to type up an unnecessarily long and convoluted definition of medium-term rental (there's not a strict legal definition or anything), but Erin Spradlin (who I can't tag for some reason.  @James Carlson - help a brother out?) wrote a great blog post about them here - https://www.biggerpockets.com/blog/real-estate-medium-term-rentals-first-time-investments

In short - it's 31+ days of rental.  The core demographic is traveling nurses and folks in town as corporate travelers.  It's for a set period of time (e.g. three months), unlike a perpetual month-to-month lease that comes along with the eviction notifications of 21 days, etc.

I'm zoned R1, so I can't owner-occupy for STR once I move. The CoSpgs City Council never got back to me about what the military exemption actually means for military, so I'm assuming I won't be able to continue to STR.

@Daniel Haberkost - Is that as a long-term rent-by-room, or a medium-term?  

Management will depend on what we ultimately decide. Most local property managers don't really understand the medium-term rental market, so we'd use an REI investor buddy (who is also in the Army) for the next couple years if we went that route. Otherwise, we'd hire a local property management company.

Hey Team,

Unfortunately, the wife and I have to pack up and leave Colorado Springs this summer.  The Army has seen fit to finally send me to my next assignment.  As much as we'd like to stay, we have to go and leave our house (that I own) behind.

To that end, I've had moderate success with STR in my home while I live here (average about $650/mo for a single room and shared space). But now that we're leaving for good, we have a choice - traditional long-term rental or furnished medium-term rental?

I know the pros and cons of each generally.  But to get a baseline of what I can expect with medium-term rental, I wanted to ask folks in Colorado Springs who are successfully running a furnished medium-term rental about their success, rates, etc. so the wife and I can make an informed decision between long-term and medium term (and copy your business model).

We have a 3bd, 1.5ba 1,500+sqft SFH on the West Side (best side) in a totally-zoned residential neighborhood. One car garage, large front and back yard. Updating the half bath to make it a full, installing new flooring, and updating the kitchen.

So...what's your data?  How are people who are operating furnished medium-term rentals in Colorado Springs operating?  As an entire house and allowing subletting?  By the room?  If by the room, how are you managing several-different rooms?  How much are you charging?  What's your occupancy rate?

"I just want you to answer all of my questions and not act like I'm being annoying at all."

Thanks!

@Jeff C. - You know what would be great?  A thread/forum dedicated exclusively to real estate investing failures.  Folks willing to show their warts/go outside without makeup would probably (1) separate some wheat from some chaff, since shameless self-promoters are loathe to air their dirty laundry; (2) show newbies that it's okay to fail, and that everyone isn't GREAT SUCCESS all the time; and (3) actually provide value by pointing out potential landmines for others to avoid.

Then again, it would probably only be a matter of time before the self-promoters hijacked it and started threads saying things like "My greatest failure...IS THAT I DIDN'T GO BIG ENOUGH EARLY ENOUGH USING MY PATENTED SYSTEM!  IT'S CALLED THE F.A.I.L. SYSTEM AND YOU CAN CHECK OUT MORE ABOUT IT ON MY MEMBERS-ONLY WEBSITE!!!  PM ME FOR DEETZ!  ANYWAY BYE GOTTA GO DRIVE MY LAMBO TO MY BEACH PROPERTY!"

@Ronald Starusnak - Good for you for demonstrating basic human compassion and at least trying to puzzle through a particularly prickly situation.  Placing business above any sense of humanity is a failure of the soul.  And who wants to do business with someone who has an ugly soul?

On the flip side, @Karen Margrave brings up an excellent point with regards to discrimination:  New York State's (aspirationally-named) Human Rights Laws include a restriction on housing discrimination based on age.  Discrimination includes, under these laws, providing unequal services to tenants based on their protected class status (such as age).

Therefore, if you're willing to provide extra services (e.g. setting up a soon-to-be-former-tenant with social services) to one tenant, then you'd better be willing to provide that service to all tenants, lest you find yourself on the wrong side of a discrimination lawsuit.

How does that play out in a real world worst-case scenario?

You think you're doing a good thing by offering, before upping her rent, to help the elderly lady in Unit 6 apply for Section 8 or get her in contact with Social Services.  A year from now you have a 23 year old tenant in Unit 11 who you inform "rents are going up!"  You don't offer her any Section 8 application help or to connect her with Social Services.  And, what's more, she's friends with the elderly lady who lives in Unit 6.  They get to talking and 23-year-old learns about the special treatment the elderly woman in Unit 6 got from you.  She's savvy and doesn't want to leave her apartment.  So she talks to an attorney or the local legal services clinic run by Syracuse University Law School (I did Tenant rights for Greater Boston Legal Services while I was at Boston U. School of Law, so it's not an unreasonable scenario), and they tell her about housing discrimination and how she can't be treated differently just because she's 23 and Unit 6 is 89.  

Now you find yourself on the wrong side of a discrimination lawsuit, housing this angry tenant and paying her rent AND damages.  NOT GREAT, RON.  NOT GREAT.

The unintended consequence of non-discrimination laws is that they sometimes lead to scenarios like this - where you have identified an elderly person as weak or in need of additional help but are required by law to treat her as any other tenant.

In other words...it's a pickle.

--break--

That said, and not to be the fun police here because I am a fun guy... (I tried to upload the Kawhi Leonard laughing gif here but I'm not sure if it worked) 

but I've got to say that I'm a little disappointed by the levity with which many users (not you, Ron) are treating this situation.  While I can understand gallows humor to help process or mentally manage traumatic events, these are human beings that Ron is talking about.  Potentially losing your home around the holidays is pretty traumatic.  Laughing at their circumstances doesn't seem funny, it just seems cruel.  If this were happening to my Grandma and I presented these facts to a group of unknown business people and they made a bunch of Werther's Original jokes, I would (1) be forgiven for thinking that landlords are the awful stereotypes the media and lawmakers often make them out to be, (2) be justified in hating them forever, (3) also be justified in probably punching them in the face, and (4) probably get away with it because I'd demand a jury trial and as soon as the comments of the punched party got out, the jury wouldn't sympathize with that person either and would let me go.

Again, not trying to be the fun police.  It's just that some of those comments about a potentially vulnerable population seemed gross.  Maybe I'm just being sensitive, but then again people might be acting a little bit like jerks.  We report, you decide.

OK!  Non sequitur!

@Diane G. - ahhh...the typical mistake of the non-native NYer...assuming that the rest of the state is the city.  New York City has rent control.  New York State does not have universal rent control.  New York City is a city within New York State that contains about half of the state's population.  Conversely, about half of the state's population does not live in New York City (or even particularly like it).  NYC laws, despite what they try to do in the state legislature, do not apply to the rest of New York State.  Common mistake to make.  Also, go Bills.

I'm not even sure my interpretation is correct since it talks about "temporary duty."  I speculate as to what it means for "permanent duty."  The language doesn't quite make sense to me, so I'm emailing my City Councilfolk for clarification.  STAND BY, MORE TO FOLLOW.