My Brother asked me to manage his property.

[Cody Barrett]

My older brother recently bought a new home for his family, moving him out of his current duplex that he can't sell because he's underwater.  He also does not want to deal with being a landlord.  Here is where I come in possibly...

I became hungry to learn about REI and for about 6 months I have been reading books, blogs, posts, listening to podcasts, asking questions, etc... and loving every minute of it... I actually am about to close on my very own duplex that I got for a great deal just a few blocks away from my Brother's duplex in a week or so!! Super excited but definitely in overdrive trying to put together my business so it is ready for a tenant. @Brandon Turner and his wife wrote 2 terrific books recently on Managing/Investing in rental properties and boy did I take away so much after just reading it once... Its incredible on how actionable these books are instead of just theory based writing.  I will be honest, these books are going to get me off the ground and I can't be more thankful...

Here is my question:

Would I be taking on legal risk managing my Brother's duplex as I manage my own?  His tenants that I find and mange will be using all the forms currently being generated and soon reviewed by a lawyer and I.  (I'll get my lawyers advice on this too but I love hearing from the BP community).  Anyway, has anyone done something like this for a family member, friend, coworker, or whomever?  Just for some extra money to later invest? I could even see myself buying it from him in years to come if he gives me a killer deal ; ) 

The way I see it is that its an extra 130 bucks a month for me in profit for helping him and I will have another property to learn on and become more "handy".. Just 3blocks away...  I would invest in another property right away but my funds need to be replenished after doing my first deal : ) 

Cody B

Thanks!!! 

[Dana Dunford]

@Cody Barrett - Congrats on investing / making headways in your business. Two big thoughts come to my mind:

• Property Mgmt License: Depending on the state, you may need a property management license to legally manage your brother's property. Check your rental property's state's requirements. But, in most states, if you're not the owner then you can't manage it without a license.
• Trust Account: If your rent collection is not an online ACH/e-check transfer (which I highly recommend setting up for all properties -- from the tenant straight to the owner), then you cannot collect the rent without setting up your own trust account. Therefore, I recommend your brother sets up an online account to transfer the money directly from the tenant to him.

Let me know if you have any other questions!