Since my last post, we have gotten new tenants and made progress in the construction project.

Our six-month term lease tenant moved out at the end of May. She was a good tenant in that she was rarely at home, we never heard her dog, she was always respectful and nice, and she paid rent on time. The unit did need a bit of cleaning but not too bad. We were getting $2350/month from her and needed to bring it down to $2200 to get a new tenant. I have come to the conclusion that we were getting a premium because she had bad credit and really wanted the place. Because we have a Section 8 tenant in the other unit, we were able to bring that unit’s rent up to $2350 to match the previous tenant’s rent. Now we are getting $2200 and $2350 for each unit. The new tenants are a young couple who are very nice people. They are quiet and respectful as well. They have a dachshund named Dude.

Now, with all units occupied and on leases, we are collecting $2600, $2500, $2350, and $2200 per month in gross rents.

The construction project at our duplex, where we are converting the garages to one 2BR unit, and adding a 2BR/2BA ADU in the backyard, is almost ready to break ground. The city reviewed the plans and gave comments. I had to hire an MEP engineering firm because the duplex is being converted into a triplex. Why that necessitates and engineer is beyond me. That was another $4000. Last week, he finished the project and, Lyla, the architect, made the changes to her plans and handed them off to the “runner” to submit to the city. We are so close!

Luis, the general contractor, has stayed in contact with me keeping himself updated to the status of the plans. He also successfully changed my mind in regard to the HVAC solution. Bobby, our electrician, suggested mini splits for AC /heating. Luis questioned that advice. He told me the central air was the better option and the MEP engineer agreed. So, we will be doing that instead. Luis estimates the plans will be approved in about a month. Once construction begins, the existing units at the duplex will each be paying $200 less per month until construction is over.

This project was started over a year ago.

I started doing something to keep myself busy while waiting for construction to begin. I have been handwriting letters to absentee, multifamily, property owners who have owned the property for at least ten years. I write these letters informing them that I am interested in purchasing their property. I use Redfin to find the property and APN. Using the APN, I go to the county Recorder’s website to get the owner name and Parcelquest to get the mailing address. According to my research, the conversion rate (rate at which a property is purchased) for direct mailing is .2%, or 2 conversions per 1000 mailings. I have sent out about 40 letters so far. I have received three phone responses all informing me the property is not for sale. Regardless, the phone call is enough rush to keep the motivation for writing the letters. I have increased the number of letters I send out each day to four from one. I want to send out one thousand letters within nine months with a goal to buy something within a year. I’ve listened to the book, The 1 Thing, about 5 times in a few weeks. My 1 thing right now is to write four letters each day.