All Forum Posts by: Rick Bassett

Quote from @James Hamling:

 what page of the slumlord handbook did this come out of?

After reading this, and your last post, it’s obvious that you’re uninformed and too quick to jump on the S word,

if you have ever pulled a toilet and found a giant wad of toilet paper, you would know exactly what I am talking about. Our plumber has done this at least three times this year at a cost of $250 per visit.

Sometimes Tenants will just ’wad’ up not thinking or understanding the consequences of what they are doing. That is not a wear and tear issue and that is not an issue related bad plumbing. It is a user issue.

Also, it’s pretty easy to determine if it’s a clogged pipe or if the problem is located to the toilet. If the rest of the bathroom plumbing fixtures are flowing freely then usually it’s not a clogged waste pipe.

@Nadir M. Tell him to flush at 1/2 time (my plumber calls this a courtesy flush) and it should solve his problems; otherwise charge him.

The reality is we are not in business to protect any other landlord than those who we manage properties for, and the math for our client owners works out much better to get a bad tenant out as soon as possible.

We will never give a bad tenant a good reference nor we will never serve as a reference for a bad tenant. They may get cash for keys, but we are not going to lie for them.

  Have a very tight screening process, like we do, and it will be difficult for these professional tenants to get in. But even with that sometimes good people run into bad situations which alters their ability to pay.

Quote from @Nathan Gesner:

Wrong. Cash for keys is a means of erasing a big mistake and rarely works in the landlord's favor.

If you understand the law and how to handle tenants, you'll never have to pay them to leave. 

I respectfully disagree. We manage several hundred tenants and know how to handle this and we know the laws in our state.

Giving cash for keys definitely does not feel good but a protracted eviction in our tenant friendly state of 3 to 4 months, which is the normal plus attorney fees will easily exceed $10,000 depending on the monthly rental cost. We generally will offer the cost of our Legal, which is about $1500 to get them out. It works about 30% of the time and it is well worth it. 

Cash for keys is a business decision, it is not an emotional decision, and usually the math works in the landlords favor.

As others have said, the trick is to execute it properly. Never give them money until they are out, they are handing you the keys, the place is broom swept, and free of all of their possessions.

@James McGovern - when it’s clear they aren’t or can’t pay then our motivation is to get them out as soon as possible to get the unit rented to a better paying tenant.

We serve them with a NTQ.

We offer them cash for keys (the equivalent of our attorney’s cost, which is about $1500) on a tight window of time.

We explain how bad having an eviction on their record is for them.

Still, only about 30% take us up on it often citing that $1500 isn’t enough moving money. So I can’t imagine anyone accepting $200.

@Gerard Scranton - we have gone the partner route in similar situations in the past by giving an equity stake in exchange for cash and labor.

I would find the nastiest houses in need of work and put up 50% of the combined purchase price and rehab cost and then I’d bring in a contractor partner to bring in the other 50%. We would both do some of the work and hire the rest. It worked out very well.

All were buy & holds, all cash flowed well, all have at least doubled in value.

Miguelli - When I first got serious about RE investing it was about 2005 and the market looked a lot like it does today; prices were very high and cash flow was very low. Almost nothing penciled out and I wasn't interested in buying properties with negative cash or banking on the possibility of future appreciation.

So I resisted buying bad deals and pretty much sat on the sidelines from 2005 to 2009 and continued to build up cash, contacts, my credit score, and my RE knowledge/education. 

After the market crashed in 2008 we went on a buying spree from about 2009 until 2015/6 (buy & hold) until the numbers didn't make as much sense as the prices started creeping up again, rent prices were flat and many competitors started entering the marketplace.  

Today feels a lot like the 2005ish market with very high prices, and very low, cash flow. On the plus side of where we are; rents have really shot up, we have far better RE investing tools, as well as better software and knowledge. But there are many more investors chasing every deal that's out there, repair costs are much higher, taxes are much higher, insurance is much higher, regulations are starting to become a bigger issue, and of course interest rates are an issue.

 So for now we continue to hunt for deals, but most do not pencil out. In the meantime we are building our resources to be ready for the next market reset (if it comes) so we are prepared to go on another buying spree if sensible opportunities present themselves.

@Patrick Bavaro - we manage over 200 units in Buildium

@Elijah Berg ‘a lot of sweat equity in 1 week’’? How so?