All Forum Posts by: Paul D.

@Lance Lvovsky Thanks. Yes, I'm the fiduciary and also one of the beneficiaries.

A family (parent and children) owns rental properties as tenants in common. Each co-owner has more than a 10% stake in the properties. One co-owner does 99% of the property management. However, when it comes time to approving rental applications, making decisions on capital improvements, etc., all co-owners are consulted before a decision is made. Can all family members claim active participation in this passive activity?

I have read what the IRS says about Passive Activity in Publication 925, where it says:

I'm just still unsure about whether all co-owners in my example qualify.

Tenant moved into a home that was built before 1978 in CA, then requested that I get it tested for lead. I ordered a lead test. Is this a deductible expense? If so, what category does it fall under? Thanks in advance.

I don't write it into the lease. Two months before the expiration of the lease, I send an email, something like the following:

A reminder that your current lease is scheduled to expire on <date>.

I'll be happy to renew the lease for at least another year. I generally incorporate a small increase in rent into all renewals, just to keep up with rising expenses (e.g., taxes, HOA fees), inflation, and fair market value. This usually means a 3 - 5% increase per year. 

Then the following is case-by-case:

However, since you guys have been great tenants, if you would like to renew for another year, then I propose for the increase in monthly rent to be $xx/mo (closer to 2%). If agreed upon, then this would mean that the monthly rent due beginning <month year> would be $x.

Please let me know your thoughts by <date>.

I also give a similar mention about the "I usually raise rent by 3-5% per year" as part of an acceptance/welcome letter at the start of the tenancy. For good tenants I almost always keep the annual increases less than 3%. 

If/when we agree on renewing, I just put together an amendment that states the new expiration date of the lease and the new rental rate (if different).

(My properties are in the Boise area, by the way.)

@Kenneth Garrett. Thanks for the recommendation.!

@Don Spafford. Thanks for your input and suggestions. I should have mentioned that it has been quite some time since the decedent passed away, and as a result, the properties do not need to go through probate but rather some simplified process (though it still requires a court appearance, etc.).

We will very likely refi at least one of the properties to pull out funds (one has a mortgage; the other three are owned free and clear).

@Katie L.. Thank you for your reply. For now, we plan on keeping the ID properties. Prefer to do the bookkeeping and taxes myself for now but regardless of that looks like I will be consulting with a CPA based on everyone’s input (in addition to an ID attorney and likely a CA attorney as well).

Thank you, all, for your input.

My family and I live in CA and we currently have four SFR in Idaho. Technically those four properties are in the name of a deceased family member, as his sole and separate property. We are the beneficiaries of the decedent's estate, and we will soon initiate the process of having title transferred [1]. We are looking to continue investing in RE! We all share the same vision/objective of maximizing our growth, collectively, in the long run. None of us are concerned about how much income we "get" individually; and most of the money we earn now and in the near future will be reinvested.

That being said, I am seeking advice on what type(s) of professional(s) to consult with in regards to questions I have about best practices for a family (two generations for now) who is investing in RE (small potatoes at the moment, but with ambitious growth plans). The questions pertain to how to structure ownership, how to divide income/expenses among family members, how to minimize individual tax burdens, etc. Should I just be looking for a CPA who is experienced with RE investing? Bonus points if whomever I speak with can also give basic advice on estate planning as it pertains to the investment properties.

On a related note (but probably more appropriate for the forum titled "Private Lending & Conventional Mortgage Advice"), I'm also interested in learning about how different ownership and income distribution scenarios might affect our borrowing capacity, especially cash-out refis. For example, would banks / credit unions be less willing to lend money if the properties were in an LLC? Is it more difficult to get loans if rental income is split up among four people?

I've read through some discussions here on BP and they are great resources and have given me some good ideas and things to think about, and now I feel that I would benefit from having an in-person conversation with the appropriate professional(s) with whom I can delve deeper into the circumstances that are specific to me and my family.

Any and all recommendations and advice are welcome!

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Footnote:

[1] Decedent died intestate, and according to the Idaho laws on intestate succession, the surviving spouse receives 1/2 of the Idaho property and the other 1/2 is divided among children. 

Thanks to all for the input. I asked for the prospective renter to send me copies of more current letters, and also advised that each letter should specify that the individual has a disability and has a disability-related need for a service/assistance animal, as per a template I found on the HUD website.

Agree with another poster that it is absolutely NOT legal to charge more for qualifying service/assistance animals.

I'm processing an application for a SFR in Idaho. The application lists two assistance animals for two of the individuals on the application.

FIRST ASSISTANCE ANIMAL: Attached to the application is the following letter, dated 5/12/2016:

To whom it may concern,

ApplicantName sees me in therapy related to high levels of anxiety. She has two dogs, Dog1Name and Dog2Name, that are very close to her and vice versa. Being around these dogs assists her in the mitigation of stress/anxiety. Please recognize them as “companion animals“ integral to her emotional health. You may contact me if you have any questions. 

Respectfully submitted,

SocialWorkerName

Licensed clinical social worker.

If I call the social worker to verify that this is true and correct, and still applicable today, does this qualify as a "reasonable request" to accommodate a person with a disability? (The HUD document regarding Service Animals and Assistance Animals (https://www.hud.gov/sites/documents/SERVANIMALS_NT...) explicitly lists a "social worker" as a "mental health professional" who could provide the necessary documentation.) My main concern is whether or not "high levels of anxiety" qualifies as a disability. It seems like a bit of a gray area.

SECOND ASSISTANCE ANIMAL: For this individual, the disability has already been established. Attached to this individual's application is the following letter, dated 3/29/2016:

To whom it may concern:

It is my medical opinion that ApplicantName would benefit from a companion animal. Please allow him to have a companion animal at his place of residence.

Sincerely,

DoctorName, MD

My concern here is that it does not specify the name of the assistance animal.

Any advice would be appreciated!

Thanks to all for your input.

@Tim Boeving: Yes, I'd be much obliged if you could share your recommendation.

I'm sure this is very much YMMV, especially based on location. My question applies to single family homes and townhouses in good parts of the Boise ID area. The units are not luxury units, but they are respectable and were originally built with decent quality. Another part of the equation, if it makes any difference: I live out of state.

Who in your opinion generally has a better combination of price/quality/customer service (keep in mind I'm managing from out of state) for things like flooring (looking to get luxury vinyl plank installed), kitchen upgrades (replace laminate counter with granite or quartz; refinish or upgrade cabinets; install new sink), bathroom upgrades (install new bath/shower insert)? Lowe's? Home Depot? A local contractor? 

I'm relatively new to property management and would love to hear your thoughts!