All Forum Posts by: Dan K.

Hi @Evan Jacobs,

As I'm sure you are aware, a wrap-around is a specific form of a subject-to financing deal. Although subject-to's and wraps aren't very common in Massachusetts, I have worked on several and am happy to discuss your deal and the circumstances.

One of the most important aspects of subject-to's, no matter what form they take is that all of the parties understand their obligations and risks under the agreement.

Feel free to PM me.

Timing the market is impossible, that's why the property needs to have solid numbers. If you are looking for a buy and hold, being underwater shouldn't even matter in most respects so long as your rents are covering your expenses plus a profit. 

Market rallies don't die of old age. 

The key is to stick to your analysis. Don't start assuming vacancy rates will be zero or that appreciation will be 5% higher than average just because that's what it's been over the last 18 months. Additionally, in your analysis make sure the property is cashflow positive with money in your pocket.

Hi @Ian Maxwell,

A long answer to a straightforward question. Quick answer, your friends can charge you, you can't. Long answer -- there is a good chance the former landlord did not properly follow the security deposit law.

Always good to ask. As I'm sure you know, security deposit laws in MA are very strict and judges give landlords very little (if any) leniency.

Since you inherited the tenants, you must first ask if you're entitled to withhold any security deposit. Did the former landlord follow the security deposit law?

Here is a quick list of what's required to prevent treble damages in Massachusetts:

• Provide receipt when receiving the security deposit saying who received it
• Put the security deposit into bank account
  • Must be MA bank
  • account must interest bearing
  • Account is a trust account in tenant's name with landlord as signatory
• Within 30 days of signing the rental agreement, give a receipt that lists
  • The name and location of the bank
  • Amount of the deposit
  • Account number
• Each year
  • Pay interest of 5% or actual interest received
  • Provide an annual statement that lists
  • Name and location of bank, amount of deposit, account number and interest earned
• Within 30 days of the end of tenancy,
  • Pay all interest
  • Provide an itemized list of damages
  • Signed by the landlord and should say “Signed under the pains and penalties of perjury”
  • Receipts, invoices, or photographic evidence are required for each deduction
  • Return the original deposit plus remaining unpaid interest less damages

Recent case law in Massachusetts ruled that landlords cannot charge for their work, since that is the general expectation of a landlord. However, your friends can charge a reasonable amount and bill you.

I'm an attorney and broker. Feel free to reach out.

Hi @Krista Manna,

I'm pretty surprised at the cost you're getting. Perhaps you're using too many filters? I'm in the Boston area and leads to cost area is much lower than what you're getting.

@Erin Whalen -- There is no sure fire way to "find a deal." MLS is a great way to start. Run the numbers on potential properties and get comfortable with the numbers before pulling the trigger.

Some wholesalers are wonderful, others not so much. There is no need to start buying from a wholesaler. As @Lien Vuong mentioned, working with an agent that knows the market from both a buy and sell perspective as well as renters will be beneficial.

A few points:

1. As others have suggested, find out why his credit score is so low. When I tell tenants that I'm going to do a credit and background check, I also say, let me know if there is anything I should pay attention to. If they defaulted on a credit card, forgot to make a couple of payments, etc., I am not scared off if their income can support the rent.

2. When the female moves, will she have a job? What is their plan?

3. Know what you can legally charge (and charge it) -- for example in MA we can ask for first and last months' rent as well as a full month security deposit. Every state of course has its own rules. Make sure you comply with your state's security deposit regulations.

4. Ask why they're moving. I always ask prospective tenants why they're moving. You're often able to find out a lot from open ended questions like that. 

It sounds like you’ve worked out a solution.

Nobody asked, but did the agent sign the release as well? Unfortunately if you were the only one to sign the release, it isn’t enforceable.

I'm going to agree with @Lien Vuong and add some details. As Lien says, you are focused on a lot of issues that are really secondary -- having a solid property that cashflows or can cashflow after forced appreciation should be your number one priority. 

Have your finances in order. Before you contact anyone, have a very easy to send document ready to go with income, bonuses and the other financial info like assets, debt, monthly payments for anything like rent and credit card payments. We are still in a borrower's market, but you want to make it easy for a lender.

You should get quotes from a 3-4 lenders and can negotiate from there.

After you have a document together hit the phone and nail down some lenders. Knowing your credit score is helpful of course, but you don't need to have the lenders do hard credit inquiries at this point; however, you can provide info from a site like Credit Karma.

No. I'm a lawyer, and your very phrasing of "open an LLC" tells me you need to continue to do more research and learning. In addition, as a newbie, a lender will only do a recourse loan -- meaning you are personally liable for the loan. If you later transfer the property to an LLC you may trigger what is called the "due on sale" clause of every mortgage.

Completely up to you. TurboTax and other software offerings have come a long way. If you'd be more comfortable with an accountant, go that way. As you progress in your real estate endeavors, you will find that an accountant is helpful. At this point however, an accountant is not a critical team member for your short-term goals.

No. I'm in the Boston / Cambridge market.

A broker is a key member of any team. Do you know what leases should be for example? 

A handyman or GC. What do you do when the toilet clogs or a drawer in the vanity is jammed?

I have used somebody for many years on a property in Cambridge and in Newton. He does a great job, cleans up the sidewalks, side entrances, etc. He also clears out dryer vents.

He isn't cheap, but he does a terrific job and our sidewalks and driveways are usually the best around (besides various neighbors that have hired him after we did).

I can't post his contact info in the forum, but feel free to message me.