18 slummy apartment units - need some advice.

[snowbank]

Seriously it sounds like he needs to do a lot better job of qualifying his tenants and get more of a deposit so he doesn't get left holding the bill when they trash it. Hire an onsite manager that lives there so they can keep an eye on the property 24:7 pay them on occupancy. Build up a good occupancy history then sell it or reap the bounty. Those guys could be making a killing on it. Sounds like there is a lot of crime there maybe go to the police ask them to put a neighborhood station in one of the units. One where the cops can hang out eat a donut fill out reports. Maybe get a security service to patrol at night"

Best advice you will get.

Desertcat,

Is your friend by any chance named Steve?

[joda mas]

I own 10 units in Oakland. I'm lucky because my partner loves the problems you describe. Our building had much worse before we bought it.

Like Desert cat said, do a better job qualifying tenants and get bigger deposits.

Get the dealers out or make it tough on them. Call the police often. Hire on site manager, etc. If possible, install a security gate around the property to keep out non-tenants.

Become very familiar with the eviction process. As soon as they don't pay, file a 30-day notice. You may need to hire a professional.

[DesertCat]

[ QUOTE ]


Is your friend by any chance named Steve?

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Nope. He's very creative though. I know I couldn't dig in and do the things he's done to turn around a property. I think you have to love this kind of stuff to be successful at it.

[Slacker13]

I am heavily involved in real estate but I am not in the rental market so I am not sure if what I am about to say makes any sense. Is it possible to get some kind of govt assisted tenants in there?

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Real estate isnt for me. People just dont give a [censored] and ruin all my effort.

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There are thousands of areas where this would have been a great investment. It just sounds like a bad location. Unless there is a chance of this neighborhood improving it may be hard to unload this property.

[LinusKS]

All those are good ideas, but a lot of them fall into the "easier said than done" category.

If he's having problems getting tenants, how's he going to get bigger deposits or reject more applicants without driving his occ. lower?

If he's got negative cash flow, where's the money for 24hr security going to come from?

A management co. will cost you money too, and often times the management you get is not the greatest, since it's not their property they're managing.


This part I don't understand:

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When we first bought them, they were in the 325-350 area. I believe the combined appraised value at the moment is above 450k.

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Why would anybody buy a money-losing property for 450k?

And if nobody would buy them for that price, what's the point of the appraisal?


The HUD thing is a good idea, though. That way, you'll be getting reliable rent, and since the tenant's not paying, he's liable to stay there for a while. If he (or more likely she) is going to be there a while, she's not so likely to tear it up.

[Life]

How do you guys find these apartments for sale? I would like to look into this but not sure where to start. Googling for low income apartments + area doesnt work, and websites of RE companies like remax or century dont list these types of buildings.

[mmcd]

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Any advice would be appreciated greatly

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Just make sure your insurance is paid up...

[DesertCat]

[ QUOTE ]
All those are good ideas, but a lot of them fall into the "easier said than done" category.


[/ QUOTE ]

I think OP has to either roll up his sleeves or invest more in the property. Lowering rents gives more tenants to choose from, but they have to be able to handle lower cash flow for a (hopefully short) period. OP can't afford security, he should consider living in one of the units himself, or pick the best tenant and make him onsite manager for half priced rent.

And I agree about management companies. John T. Reed made some comment that he'd never met one that didn't rip you off, and he's both hired and worked for management companies.

[Bulbarainey]

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I have one word for you son...

Condos! Sell each one for $50k average and you'll be rich!

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this is a good idea, but it will take some time. in some cities the condo conversion process can be a bitch. the small 6unit place i live in now, owned by family, is in the process of being converted. Already its been about 8 months of paper work and filing, over 30k in fees, and were maybe halfway there...

[Hack]

I own 550 units in the Tamp/St Pete areas. Feel free to send a PM.