All Forum Posts by: Alisa O.

Paul, You don’t “need” an attorney or some company online to establish LLCs, especially if you’ve established one before. It’s a matter of “want”. If you want to save some $$$ and time, an LLC in NYS can easily be established online. IRS will give you 1 EIN per day, look in the search box on IRS website (must end with .gov) “open LLC” or something like this and do the same thing on the NYS website (also must end with .gov). NYS charges $200, IRS is free. Good luck.

Swastika is considered a religious sign so realistically you cannot discriminate based on that. If you are going to say that you don’t allow tattoos (which is not a protected class), they can file a suit against you for discrimination if any of your other tenants have tattoos or you have any. Tread lightly there. Best way to get rid off of them is through financial disqualification.

By law you are not allowed to discriminate based on the SOURCE of the applicants’ income. However, you are allowed to “discriminate “ based on the AMOUNT of income. 

I have Section 8 tenants whom I “inherited” with a purchase of the properties and non-Section 8 tenants whom I placed my self. Even though a few tenants are non indicative of a whole population, my particular tenants in my particular properties in my particular situation require more work and oversight and involvement compared to non-Section 8 tenants. Even though I pass inspection, it is time out of my day to deal with the inspectors who have to justify their jobs with stupid citations that they previously passed.  And they love to waste your time! Some of the criteria they have is absolutely ridiculous ( 2 in long crack - not a break!!- in the corner of the ceiling tile in the dark corner of the laundry room behind a column- they required me to fix it or I won’t get the rent pmt. How she even saw that I don’t know! I told her to get the hell out of there and got management involved). 

I raised my monthly income criteria and collect first, last and security UPFRONT  to select the best applicant. They also pay for the background fee- non-refundable and not part of the Security deposit. In my particular situation in my particular properties that I currently own Section 8 doesn’t work. Plus, where I can, I pass the snow removal and grass moving onto the tenants with their lawn movers (you can be liable for malfunctioning of your lawn mover and they will own everything you own). You are legally allowed to “discriminate” financially  (select the best applicant without discriminating protected classes- sex, familial status, race.. etc- financial standing is not one of them). 

If you say that your property won’t pass an inspection, a “professional tenant” might file a complaint against you saying that you are not even giving them a chance, hence discrimination, hence you are paying for your ESQ, while they enjoy the free legal service on your tax dollar. But don’t let me go there, sensitive subject. 

Good luck. 

Hello, please PM me. 

Alisa

Welcome! You might want to consider joining local REIA to get access to professionals and tradesmen. Face time and real conversation with seasoned investors can only benefit you. I would also be cautious who I read/listen to and take advise primarily from seasoned investors, who have successful track record and something to back their experience with a number of properties they own, vs those "fluke" or one-two times high fliers who imagine they are pros after 1-2 flips and spew their advice. When you start talking to "investor friendly" realtors ask how many properties they sold to the investors this year and most importantly, how many properties do they own them selves. This should save you lots of time.

Good luck! 

@Mitchlyn D. 

I would be very cautious to use only 5% each on Repairs & Maintenance and CapEx, unless its a newer building with newer systems. Also 5% on Vacancy is low, unless you live in the area where apartments are easily rented pretty much immediately.

You have 2 empty units. Just the lost rent per month for those 2 units is $1,390. Add on top of it the share of the hard costs, you may not cover it. You are also not calculating the cost of the utilities that you will be paying while the apartments are getting rented. Also, are you renting them your self or hiring someone? Who will be paying for tenant background check? It's between $60-$80 per unit (with 2 adults in each), but it's still a cost. I think you need to increase vacancy unless you can rent immediately without hiring a professional or your PM doesn't charge for it and tenants are paying for background check. 

I don't see an expense for lawn/external maintenance. Are your tenants or you will be cutting grass? Or do you have asphalt around the house? It needs to be sealed/ cracks need to be repaired. Make sure to calculate for that. 

Also, check whether your municipality requires you to register the rental building because it will add additional annual/semi-annual expense. 

Bottom line, I think you are optimistic on your expenses and maybe forgetting to include some in your estimate. 

If after all said and done you can either bring the purchase price down or lower expenses and still come out with $100 per door its an ok deal. 

I hope this helps.

@Mike Abramowitz 

My property is in Buffalo NY so I would consult an ESQ in your area. 

I'm going through a similar experience right now, although my tenant is still on the Lease. His rent is paid through social assistance and disability programs. The cause for eviction is smoking in his apartment and the building and consistent noise disturbances after hours. Police came once. He is essentially violating conditions of the Lease like your tenant.

All of the other tenants' written complaints against him were documented and I sent a Cease and Desist notice to the tenant and his case worker at the agency in April. 

Little history: when I tied to evict an inherited tenant from the first property I ever bought after his lease expired (different from the current smoking tenant's building), the Buffalo NY court pretty much told me that because my LLC is an owner, an ESQ had to represent me in court. I'm an out-of-area self-managing landlord. I lost time on refiling and getting new court date, fees on refiling and after all ended up hiring a lawyer to represent me to kick that trash out who stopped paying and caused $4K in damage on top of non-payment as retribution while I was getting my forms together. You want this process to go as swiftly as possible.

Now as I'm dealing with the latest eviction of the social program tenant (very similar to Section 8- same funding, called differently) my ESQ tells me that the documentation has to be filed with the court and that the judge has to award an eviction judgement because the tenant doesn't want to move out on his own. My lease stipulates that reasonable legal fees will be taken out of the security deposit, so the tenant will essentially pay for his own eviction. My ESQ already confirmed that I have a right to take the legal fees out of the security deposit and also reasonable costs to bring the property back into "pre-smoking" condition, whether it's re-painting or cleaning. He also said that there will be no problem to evict the tenant for smoking and the noise because my Lease says "no smoking" and "not to act in a loud....manner or disturb the right of the other residents to peace and quiet". At this point it's just going through the motions.  

How else are you going to get your tenant out without court? Marshall is only going to act upon the eviction judgement and additional notification that the Marshall is coming and you can not change the lock or disconnect utilities if they are included in the rent. 

If your tenant is not moving out on their own, then, unfortunately, court is your solution. The housing authority will continue paying because they don't have a reason not to pay. Just because you are not renewing the lease, the tenant is considered month-to-month in the eyes of the housing authority. 

Because it is not a straightforward eviction for non-payment, my advice would be to hire an ESQ and use this situation as an educational experience for future situations other than non-payment eviction. If you file some form wrong, the court will throw your case out and you will loose time and might loose good tenants who are tired of waiting for you to get your bad tenant out. If you learn that an ESQ has to represent you after you filed all the forms correctly, again you will lose time and might loose good tenants. If you say something "incorrect" in court, you have different risks. 

In my mind real estate investing is my responsibility/business, legal stuff should be left to the professionals. This way you will know steps/forms/process will be done correctly and you can learn what to do and how to go through the process the next time.

I hope this helps.

@Adam Ulery

I would absolutely deny. 

The cost and aggravation of getting rid off of them if they get back to their old familiar ways will outweigh the rent. 

Tips is not W2 so use it in your estimates very carefully. I would not rent to this candidate, but if it was a good candidate I would ask them to prove the tip income over an extended period of time either through employer provided statements or income tax. 

Distant family member will say whatever is necessary, I would not rely on that. 

Current landlord will review any unwanted tenant with rave reviews to get rid off of them, would you expect anything else?

You are saying that a previous landlord doesn't give "red flags" and then go on to say that "they skipped out early without giving notice" and "there were SEVERAL criminal offenses". 

Continue to march and don't waste your time. Unless you intentionally are looking for aggravation.

@Matthew Irish-Jones 

Disclosure: comment below is for general information only and not to provide legal advice or opinions.

Matthew, 

At some point your Realtor was estimating that the appraisal will come in "well over $100,000" so he or she was getting this number from the comps in the area (hopefully!). The only solution I can think of in your situation is to get those comps to the appraiser asap. You can not change, but you can somewhat influence the opinion of the appraiser. If you provide the data to the appraiser showing that the property in question has attributes comparable to let's say properties in $120K rage, versus $100K range, the appraiser will take this data in consideration. 

If the appraiser did not finish their report, have the Realtor provide information to the appraiser that would sway the number in your direction. Stay on top of it. Make sure the Realtor copy you on the email. Fighting with the Realtor right now is not going to help you, concentrate on "saving" your $4K. You can hire an ESQ or make a complaint to the Department of State later. 

If the appraiser finished the appraisal and it is low, look whether there is anything that can be adjusted. For example, the appraiser "missed" that the property they used for comparison doesn't have a tear-off roof, but your property does, things like that. 

I hope this helps. 

Hi Jeffrey, 

Welcome to BP. Once you get into wholesaling, please put me on the list. 

Good luck.