All Forum Posts by: Andrew B.

Hi BP,

I hope you're all having a great new year!  My questions are regarding inherited tenants in a property I recently purchased.  The unit is under a joint lease between 3 people.  2 of the 3 people indicated January 1st they'll be moving out (without the proper 30 day written notice required in the lease).  The 3rd person indicated they would like to stay.  My questions are:

1) Is a new background check/lease appropriate for the 3rd tenant to determine if they can afford the unit on their own?

2) I assume the security deposit remains since all 3 tenants have not vacated the unit and any claim the other tenants have to the security deposit would have to be handled by the 3 of them on the civil side unless that happens?

3) Would a walk-through of the unit be appropriate to attempt to confirm the 2 of the 3 parties have moved out and to assess any potential damage to the unit?

Any input would be greatly appreciated!

Hi BP! After purchasing a property it's my understanding standard homeowner insurance is not sufficient to cover a landlord in terms of liability. In the interest of qualifying for residential financing it seems an LLC is not a great option for asset protection when starting out. With that in mind general liability insurance appears to be the best option.

What would be a good level of protection when starting out (1/2 million)?  How should that protection be modified as you start to add multiple properties to your portfolio (umbrella policies/etc.)?  Any input you could provide on the subject of would be greatly appreciated.

I've heard good things about all three markets.  For me, it's a choice between Houston and Jacksonville.  I've heard property taxes in Houston have been rising due to frequent town assessments.  In Jacksonville, there is the potential for flood and wind insurance being needed depending on the area which are additional expenses to consider that may impact cash flow.  

There is great jobs and population growth in both markets and the expectation that home prices will continue to rise at an above average rate.  Out of those two markets I would go with Jacksonville, but it's a tight race.  Hopefully, some investors from those markets can way in with more area specific considerations.

This is awesome information as I am looking to enter the market in Cleveland and find good neighborhoods also.  Thank you!

I watched the podcast with the authors and just bought the book.  I'm excited to add this skill set to my tool belt after I get a few traditional investments under my belt.

Hey @Connor Ong welcome to BiggerPockets!  Keep learning and you'll be better positioned to succeed when finances allow you to jump in to your first investment.  Getting started young is also a huge advantage for you.

Hey @Greg Dickerson thank you for the reply that is awesome info!

Hey BP!  I'm working toward an out of state investment property purchase within the next 2-3 months.  My question is how do I avoid double taxation on income earned from out of state properties?  Any assistance is appreciated.

Hi BP! I'm a new BRRRR investor looking to get my system in order for an impending purchase. All steps of BRRRR are important, but I can see a mismanaged rehab making or breaking a deal. I am looking for advice on how to ensure an out of state rehab goes smoothly and a contractor follows through on the agreed upon work,cost and timeline. Here's what I have so far:

1) Network on BP or local REIA's to find qualified contractor referrals then further vet those referrals through websites like Yelp.

2) Interview 10-15 contractors through those referrals or websites.

3) Get 3-5 materials and labor separated bids with an expected worst case scenario time frame for your rehab prior to finalizing the deal.

4) Turn the bid into a binding contract where bonuses are in place for finishing on time/early and penalties are established for finishing late.

5) Supply the materials for each phase of the rehab and pay labor as phases are verified to be complete by other team members (Real Estate Agent/Property Manager).  These team members will provide videos and pictures of the completed phases.

My main question is regarding the payout of labor for phase one.  Is it common practice to only pay out labor once phase one is verified complete.  If so, it seems you could completely eliminate the risk of a contractor taking that initial payment and never starting work.  Any other ideas would be welcome in terms of how to eliminate risk, stay on budget, and finish on time.

Welcome to BiggerPockets Valencia!  Joining the site is a great move to help grow your real estate knowledge and network.