All Forum Posts by: Warren Lizo

If you attempt to go to court, the 30 days repayment is most likely what the judge will grant in my experience. Without seeing your lease, if the lease says that 'charges are due as additional rent' the charges may fall into housing delinquency law. If they are billed separately, the charges may fall into Fair Debt Collection Practices Act laws. Someone on BP may have a different suggestion on the later. Ultimately, you want to be fair and firm.

Nothing says you have to use the GBREB lease or MA Realtor lease. You can craft your own or modify it in the Addendum(s). We use a custom lease that has evolved over more than a decade to protect us and the property owners. If you connect with a good real estate attorney, s/he will certainly have a strong lease for you to use.

@Katharina Bormann

Hi Katharina, you need to put something in writing to the tenant with a reference to the lease clause to officiate the lease violation, as @Nathan Gesner mentioned. Not only does this provide you a reason to non-renew, but if it gets worse you have a paper trail. 

In MA, tenants generally have 30 days to pay repair costs. Be sure you provide them with copies of the invoices. You lease should state a interest fee for unpaid balances. This is a good incentive for them to pay on time.

If this is a single family, they are responsible for pest control. If this is a multi, then you are. But, you can charge them back if the pest control report indicates they are the cause. That is a health code violation. Clutter/hoarding are a different issue and create a fire hazard. If you have a multi, I usually recommend not allowing tenants to store items in the basement. The risk is too great.

Overall, I recommend revising your lease to include less arbitrary language to set clearer expectations and make it more enforceable in court.

Feel free to reach out directly with any questions. 

@Lorenzo Lopez

Pretend a map of Boston is a pool of water. Imagine dropping a stone on the Public Garden and watch as the ripples extend outward. Where you dropped the stone is where you get max appreciation. They further out the ripples go from the stone, the less appreciation your receive while the cash flow increases.

Don't think of CAP Rates as just NOI/value. They really shouldn't matter to you. CAPs are an individual investor's measure of acceptable risk for a given reward. Some investors have an appetite for 3% (low risk) buys, like a Walgreen's parcel. Others want a higher reward so take on more risk, like low credit tenants.

Boston is a "mature" market with strong appreciation, as @Dan H. mentioned. If you want some cash flow, aim for secondary markets like Worcester or Fall River. Starting out, buy a shabby condo and live-in/flip it. Or explore a 40B lottery condo purchase and look into house-hacking. Follow RobertNichols on IG (who also has a hard money company OnyxCapital, btw).

Keep trying until you find an 'equation' that works for you.

And. if you have a property management question along the way, feel free to reach out to me. 

Hi @Inderpreet Singh

An Umbrella Insurance policy is a cost-effective way of getting your general liability coverage up. For a few hundred more it is well worth it in my opinion. When you move all of your insurance under one insurer, they can also bid down your individual policies to help save you money. I understand that Geico is good for car insurance, but not for rental property. Every carrier has their own specialty. If you're interested in an insurance broker that can help you with that, msg me and I will provide a local name of someone that can walk you through some options. 

@Matt Kelly  I'm interested. Do you have a defined market area?

Matt Valanzola is the attorney to contact. vlawgrp.com. He understands small investor needs and is great to work with. 

How does Fannie/Freddie under write an ADU?

In Massachusetts, towns are passing energy codes that increase the cost of housing. Adding or substantially renovating a >=1,000 sf space can lead to the entire building being required to be made energy compliant. That's a real disincentive in my mind. 

As a Property Manager in a market where many owners choose to manage on their own, I've seen several examples of owners losing their homes or properties because their tenants did not pay or caused excess damage. Landlording can be risky if you don't know the law.

Hi Anna,

At the start of your journey you may be limited by the amount of money and time you want to put into it. The best first step you can take is to connect to a great broker with market knowledge and existing deal flow. Then, find a mortgage broker that hold your hand through the financing options. Pick these two partners carefully.

Once you find a property, hire a professional property manager who can make sure you comply with the laws and get you great tenants so you can build long-term wealth! 

Hi Carmen, 

Sorry to hear about your bad tenant. Whatever her issue is it shouldn't become yours! sounds like she is trying to stick you before move out. Send her a notice to quit ASAP. Be aware of Massachusetts Laws. If she has housing assistance, you need to provide 30 days, not 14 days. The eviction paperwork process should be considered separate from your continued rent collection process. I would also be clear with her that regardless of the her vacating the apartment, if she owes you a balance you are going to pursue collections actions so she won't get away free and clear.

Consider hiring a property manager next time if not just because they have the tools and processes to reduce the risk of this and move quickly to execute on a problem. For instance, I would be surprised if she hadn't been late on rent before this. If you do go to court for eviction, the mediator/judge will want to see a record of non-payment notices to demonstrate the tenant is not having a one-time hardship. Massachusetts does not like landlords. Hire a professional!

Love this thread! Just want to impart some local experience here after 20+ years in PM & investing in Massachusetts:

1. Massachusetts punishes landlords. Laws are pro-tenant and it can be difficult to enforce lease terms. An eviction takes 8-12 months and recouping legal fees is rare. Charging lease fees is highly regulated as well. If you don't have a strong process in place when SHTF, consider if the risk to your home/wealth when 'under-managing' is worth it. Property managers fundamentally do two things: manage your asset (lease, maintain, accounting, anticipate) and reduce your liability.

2. Brokers can rent a property or call contractors to do work. Are they using a generic, untested lease? Will they respond at 2am when the basement floods from the ice maker? Do they have software in place for accounting, tenant ledgers, or inspections? When was the last time they took a Fair Housing class? Do they get price discounts from vendors because of bulk business? If you go this route, get references from their other management clients.

3. Screening of tenants is something PMs can do exceedingly well because, well, the PM has to 'live' with the tenant. At PropertyCraft, we have a written Resident Selection Plan, a process to ensure we check off all the boxes and treat every applicant lawfully.

4. Quality PM's have tons of experience that lends to good judgement. Why hire an investment advisor to manage your retirement savings when you can do it yourself through the Fidelity dashboard? Because advisors know their business. The rational for hiring a PM to protect your +$2M property and its income is the same. GOOD PM's actually create value for you.

In all honestly, the quality of property managers can vary significantly. Mass doesn't have licensing requirements for PM's so there are some fools out there. Our company does not work on the North Shore, but if you personal message me with your town, I will send you the name of a good shop around you.

Enjoy your travels!!