Although not necessary, grip tape can help if stairs are slippery from tree droppings, leaves, etc…

Believe it or not….  Copper theft is a problem these days.  Be careful letting units sit vacant for too long.  I have seen copper wire and plumbing stolen.  Best thing to do, FILL THE VACANCIES and keep the units occupied.

Just pull the trigger and make the landscaping decent.  I am always amazed how many apartment buildings have ZERO curb appeal.  Who wants to live in a place that looks like a dump from the curb?

Magnesite is the decking material used on stairs and second story walkways.  Many buildings in Los Angeles were built in the 1960s that were stucco framed with a magnesite stair case and landing.

For some reason, many landlords have tried to avoid using magnesite because it is a little more pricey than other materials.

Below are pictures of one landing that a landlord pored concrete on top.  This is heavy and so the deck started to droop.  So, the landlord propped up the deck with 4×4s.  It didn’t work and there was serious water intrusion.  So, we fixed it correctly with magnesite.

Here is another landlord’s attempt to go cheap and avoid having to replace the magnesite.  This landlord used brick and mortar.  It does not keep the water out!

So, my suggestion…  Do it right!  The magnesite lasted since the 1960s.  Thats pretty good.  New magnesite stairs & decks on a typical 6 unit building cost $6,000 - $10,000 depending on the number of stair cases and surface area.  Don’t go cheap or you will just be doing it again in a few years.

All the rent incentives in the world do not change the fact somebody is going to have to make the unit their home.  Well, would you want to live in a dingy place, even if the first months rent was free?

I have had great success with refinishing hardwood floors as opposed to putting that boring, brown carpet in the rental units.  Who wants boring & brown?  Prospective tenants walk into a unit that has shiny new hardwood floors and they flip.  WHERE DO I SIGN??!!??

But, hardwood floors are expensive to refinish!  Not really.  Only about $400-$600 more than putting boring apartment grade carpet.  But, the hardwood floors are ruined under the carpet!  Not really.  Most of the hardwood floors are fine.  Even if there are a few blemishes, it looks better than boring & brown!  But, tenants will ruin them!  Not really.  In fact….   Our hardwood floors hold up better!  You don’t refinish hardwood floors everytime a tenant moves out.  Then again, tenants don’t move out to boring & brown when they have beautiful hardwood floors!  But, noise will transmit to the lower units.  Probably slightly true.  But, usually a loud tenant above will disturb a lower tenant whether there is carpet or hardwood floors!

Apartment buildings often use 100 Gallon Commercial Grade water heater to provide hot water to the entire building.  It is cheaper than servicing individual water heaters.  You will need about one 100 Gallon Commercial Grade water heater for every 16 units.  They last about 10 years if no maintenance is done on them…  If you attach a hose and clean out the entire water heater once a year, they last another 3-5 years.  The rusty sediment on the bottom of the tank compounds the rusting.  So…  Do a little preventative maintenance and you save a few bucks!

Water heaters range in price.  But, currently water heaters are about $4,000 to $4,500 installed.

Pools are great…  But, expensive to insure and maintain.  Additionally, pools are additional liabilities lurking.  You could get sued!!!  Many of my landlords ask shyly… So, how much to fill it in?  Pools range from $8,000 to $10,000 to fill-in and level with dirt.  We have done it at a number of apartment buildings where the pool was a nuisance, expensive and was not updated.

The contractor must pull a permit, break out the bottom of the pool, fill-in dirt and compact at various levels, etc…

In lower income apartment buildings, I would seriously consider filling in the pool!

Actually, it is not that simple!  Minimum wage laws have snagged unsuspecting landlords.  Many landlords reluctantly realize they must give up a unit to a Resident Manager because they have 16 or more units.

The next thought landlords often have is…  How much do I have to reduce the rent or how much work can I get from the Resident Manager?

Minimum wage laws change often but, currently the rate is $8/ hour.  Of course, overtime generally applies.  Therefore, the rental credit must be divided by $8/ hour.  So, an $800 unit would theoretically allow the landlord to demand 80 hours of work per month.  Life is not that simple for landlords!

The California Code limits the rental credit to the lessor of 2/3 of the rental value of the manager’s unit or $451.89 (Single Manager) or $668.46 (Co-Manager Team).  In reality,  the limits are always the lesser amounts.  Therefore, landlords are limited to a rent credit of $451.89 for a single manager or $668.47 for a co-manager team.

Applying minimum wage law to those credit limits…  A landlord can demand 56 .49 hours of work from a single manager or 83.56 hours from a co-manager team.  Managers must be compensated for any work above and beyond these hours.

It is wise to have a Resident Manager on an employment agreement limiting their scope of work and the number of hours they are to work in a month.

An apartment building in California with 16 or more units must have an on-site resident manager.  Cal. Admin. Code tit. 25, § 42.

If your building is more than 4 units and less than 16 units, then a notice must be posted on the building informing the public of the phone number and address of the owner or owner’s agent (Management Company).

This is the text of the code:

A manager, janitor, housekeeper, or other responsible person shall reside upon the premises and shall have charge of every apartment house in which there are 16 or more apartments, and of every hotel in which there are 12 or more guest rooms, in the event that the owner of an apartment house or hotel does not reside upon said premises. Only one caretaker would be required for all structures under one ownership and on one contiguous parcel of land. If the owner does not reside upon the premises of any apartment house in which there are more than four but less than 16 apartments, a notice stating the owner’s name and address, or the name and address of the owner’s agent in charge of the apartment house, shall be posted in a conspicuous place on the premises.

Do you own a real estate investment?  Are you in default on your loan?  Be aware that most lenders have a clause in the loan documents that allows for an absolute assignment of rents when the borrow is in default.  The lender files a Notice of Default and then, the lender intercepts the rents before the owner of record can collect.  If the owner tries to interfere, the owner could be liable for the attorney’s fees to get an injunction against the owner collecting rents.

The typical clause is as follows:  “In the event of a default, lender shall be entitled to accelerate all sums due under the loan secured by deed of trust and is authorized to enter into and upon the property for the purposes of collecting the rents, issues and profits from the property.”

At MacFarlane Real Estate, we often take control of a property before the trustee sale (foreclosure).  Basically, once the Notice of Default is filed, MacFarlane Real Estate seizes the rental income for our hard money clients.  At this point, the borrower has to make up the payments owed without help from the rental income.