All Forum Posts by: Anthony Wick

Honestly, with a moratorium in place on evictions, landlords are stuck in place. Yes, you would need to evict him, unless you have proof he has abandoned his property, or he has turned in his keys so you can trash all of his belongings. The best bet is to speak with him in person first, and explain you'll be forced to file court documents against him. Then, send the same info in writing if that doesn't go well. Then, you simply have to wait. Even though there is a moratorium on actual evictions, can you file the court documents now? The damage deposit is gone for August rent of course. You'll definitely need to file in small claims court for damages and September rent/hold over. And yes, I would file in small claims court. 

I simply would not hire an attorney. What are they going to do, other than charge you more money to give you the advice that their hands are tied at the moment. While I really despise this, perhaps a "cash for keys" situation might be in order. Depending on how bad the unit looks, you could agree no extra charges for damages and/or September rent if they are out within the next 7 days. You should be prepared to actually speak numbers with them, and that you will be willing to file in small claims court and wage garnishment if they do not agree to your generous offer. 

@Kendrique Coats. There's a pandemic happening? In my area, I'm seeing absolutely no changes in the market. It is strong as ever. A little too strong really. I've been looking for a 4-8 plex for months, but everything seems to be overpriced. Very hard to cash flow much, especially if you realize the upgrades a person needs to do asap. Luckily, real estate is just a part time gig for me, so I don't "have" to buy anything, ever. And that may very well be what happens if the interest rates stay low and the market stays strong. 

@Oren Kachel. Sorry, I have no knowledge about their foreign investor policy. 

@Courtney Duong. Have you heard on the BP podcasts when certain guests walk into a place and the stench of cat urine bowls you over? Well, if you're a buyer, you say; "smells like money!", because you're about to get a great deal (and a lot of work to go with it). Well, I already owned that place, and wasn't selling. So, I just got the "lot of work" part. 

All it takes is one bad cat owner that lets their precious kitty crap and urinate everywhere. This particular cat urinated all over the drywall on a wall and the cement in the basement. I never knew how porous cement was until I had to try and get cat urine out of it. It took $700 and hours and hours worth of work. While the former tenant did pay the bill, they questioned me since; "the cat only went to the bathroom in one small area". 

@Logan Reinard. I'm not in your area, but a couple thoughts by me. First, always require renters insurance, pet or no pet. Some make sure the landlord is listed as an insured on the policy. Second, I don't charge a "pet rent". I raise their rent by $50 if they want a pet. Pet disappears? Rent stays the same. And I absolutely charge a non-refundable pet fee. And as of the last disaster, we no longer allow cats. At all. Don't care. No cats. 

Well, if a person doesn't have the 20-25% down payment, they could always find partners to assist them with the money, and form an LLC with said partners. I've done that before.

@Ryan Fosse. I'm going to assume this is Des Moines, Iowa and not Washington. If not, read no further. 

Is this in an LLC, or in your personal names? My last several mortgages I have gone with Luana Savings Bank in Clive (or Polk City). Local bank that will keep all loans in-house. The mortgages are in my LLC, but my partners and I signed a personal guarantee on the mortgages. All recent mortgages we have are 20% down, 25 year amorts, and 7 year balloons.

@Shalom Benton. The only way I see you having 1-2 units pay off all expenses is if you buy D class properties, or huge down payments. I'm assuming fixed expenses of PITI, plus Property Management. As an example, I'll talk about my last two duplexes I purchased. Identical duplexes on the same block, purchased 6 months apart.

It basically takes me 3 units rented to pay the fixed expenses. With the fourth unit rent of $1,480 as net before reserves (Capex, maint, vacancy). But after reserves, I'm basically pocketing "only" $828 per month for the two duplexes. But over $200 per unit works out well for me. And once the reserves are capped at a level I like, then we may be talking as much as $370 per unit. And I cannot find anything better than that around here right now, for Class B properties that are newer and nicer.

Now, I suppose I should also mention that I have "made" about $70,000 appreciation on these two duplexes in less than two years. We did two cash out refi's earlier this year for 75% loan-to-value (new appraisals). 

@Ian Verzoni. Well, it is hard for us to say, as we do not see what your unit looks like. As a matter of fact, you might not even know until the tenants actually move out. But, between tenants is a fantastic time to get in those upgrades, and to raise the rent! One month of vacancy can easily be made up for within a year with raised rents. 

Some of the small things I like to improve at turnover or purchase, mostly at little cost if you do the work yourself....

Paint everywhere, new flooring if needed (LVP is great, but Home Depot free tear out and install of carpet is cheaper in the short term), new toilet seats and handle, new lighting in bathroom, new handles on all doors (I like brass nickel), new fixtures on sinks and showers, ceiling fans, change all outlet and light switch covers, cabinet hardware, replace appliances if needed, supply washer & dryer if appropriate, clean up and improve landscaping, new blinds, supply curtain rods so they don't destroy your drywall, paint the front door and or entryway. 

It sounds like a lot of these things have already been taken care of about five years ago? So it might just be time to do touch-ups and clean up, and rent out asap at market rate rent. 

@Shalom Benton. Have you heard of the 1% rule? Some here do not like it, but for a 2-4 plex I like to use it as a way of deciding whether or not I should even look at a property, or run the numbers. It is 1% rents to purchase price. For example, you state maybe a 4 plex would be $300k, and garner $3,200 rent. Above the 1% rule. But, unlike a possible duplex with utilities separated and all paid by tenants (it is what I own), a 4 plex will require you to pay for some utilities. Hence, the 1% rule probably doesn't get you much cash flow, if any. 

The BP calculators are a must use. Always use real numbers if you can. Property tax from county assessor page. Actual utilities from local services. Actual garbage bills. Actual lawn care and snow removal costs, or close to it. And maybe even actual vacancy rates from Pro Forma's (but never blindly trust a pro forma). Actual rent rates from actual leases (including estoppel agreements if analyzing an actual property for sale). 

Like Evan said, it's tough out there right now. I've been looking for a 4-8 plex this entire year. Everything I see is not to my liking when it comes to cash flow. I'm in the Midwest, I buy for cash flow, with appreciation being the bonus. 

Good luck to you. And again, run the real numbers. You should never be under contract and not know what your cash flow will be at closing.