Need help with a 27 unit

Hello, I have a 27 unit that because of lack of experince I had to empty out. I had a management company and the company went out of business sticking me with late mortgage payments, insurance water, repairs, plus cash funds. I felt, at that time since I had no more funds to put in the property that empting it would be the right thing to do. Is there anything I'm able to do at this point?

When you say you "emptied it out", are you saying you evicted residents? I'm probably dense, but I don't understand your rationale for emptying out the building?

If you evicted residents, there may be legal issues to deal with before you can re-rent. . . (This is the case where I live.)

Why would you empty out a building that you need to make payments on? How do you plan to meet your obligations without rental income?

Herbert:

There are many things you can do at this point depending on your goals and objectives for the property. There must be a story here. Are you the owner? Feel free to contact me to chat: [email protected].

My question is where are you now with the late mortgage payments, water, etc? Have you been able to become current on those issues? When you say lack of experience caused you to empty out your apartments, did you give notice to the residents to vacate or did they take it upon themselves to move due to failure of the owner to obtain utilities?

What happened to the rents that were collected did the management company not disburse any profits to you?

My first step would be to contact an attorney to see where you stand legally with this property then go from there. You may need to find alternative money elsewhere to get your books back out of the red before you even considering renting these units. Was the water in your name or was it in the management companies name? Call the water department to see who is responsible for the water bill (more than likely it will be you) and start setting up some type of affordable payment plans with them. Not to mention your insurance... talk to an attorney.

The property could not support all the expenses including mortgage, insurance, water, garbage disposal, maintanace, etc. I personally called all tenants and explained to them the situation and gave them the option of staying and keeping the rent to be able to move. I gave them the phone number to other properties around. I also called the other properties and explained to them the situation at my property and recommended my tenants. I do own the LLc. The property is behind almost a year in mortgage payments and there are repairs needed since the repairs where never completed by the management company.

Did the Property Management Company send you a monthly financial statemenct and a reconcilliation of your income and expenses? As an owner, were you aware of the operating shortfall? If not when did you become aware of it?

I am so sorry what a horrible situation to be in! No communication at all from the management company during all of this! This is beyond my expertise in this matter but I do wish you the best of luck. It'll get turned around once you get the expertise you need to show you how to do it. It's like what they say how do you eat a Hippo? One bite at a time. The advice works for everything in life!

Yes, they did send me excel spread sheets and everything balanced.
The management company went out of business and claimed bankcrupcy because they where doing this to other property owners. We had the case brought up to court but since they claimed bancrupcy we where not able to go after them. The case was finalized two weeks ago.
That's just anoter issue completly, I much rather concentrate on the property and find a way out.

what was the cap rate ??
what location ?/
larry

I purchased at a 12.5% cap. (mix ratio 15 1 bedroom, 10 2 bedroom and 2 3 bedroom). Rents at time of purchase were $350, $400 and $475. 801 6th St. W., Birmingham Al.

can a section 8 public housing program help you fill the units? you might get highrt rents and that subsidised portion is a monthly income u can count on.

I am from the Kansas City area and there a few hints I will give you. Here we have city, and county Section 8 and all of the programs are different. There are also two programs - one where the S8 program pays all the money, and another where they pay part and the residents pay part.

The BIGGEST problem with S8 is that owners and managers believe that they have S8 so they do not have to meet any requirements. WRONG!!!!! You need to screen the residents like everyone else, and they must qualify like everyone else -- except the financial portion.

If they are destroy the property, and the kids run amuck, they are to no value to you. There are a number of GREAT renters on the Section 8 program in the Kansas City area, and they are not hard to find. They still must pass the civil and criminal background checks. The property they were at two properties ago will likely tell you the truth about noise complaints, etc. You will know who you are getting.

Good Luck - it is a great program if you use it well. Pam

We use our Section 8 office alot here in Florida. It is a guaranteed source of rent and they are very strict on their recipients.

Yes section 8 it is very good in Birmingham to. I did not have a problem renting the units to section 8 or cash, what did happend was that since the management company were not making repairs at all, it did not pass inspection. On top of that many tenants began to move out due to the lack of maintanace and the fact that the property and I could not afford to pay all expenses and obligations. Maybe what I need at this point is to JV with someone that has the experience or one that could take it of my hands completly.

Call Silvia Hernandez @ 786-251-0378 @ Apogee company she is great on what she does tell her lori ask you to call her

Letting all the tenants go was the worst thing that you could do. You needed that income to keep the property going, pay the operating expenses etc... the only thing I would have stopped paying is the mortgage. The banks wont really work with you unless you are in default, which is silly, but they will be much more willing to work with you if they know you have a plan in place.

I would do the following:
1. Set Agressive rental rates
2. Fill up the property ASAP
3. Prepare a long term plan for the bank and get them to work with you

I am happy to give you more details, feel free to contact me. I operate 2500 units in Phoenix, AZ.

www.vestis-group.com
[email protected]