All Forum Posts by: Brad M.

Isn't that a cat toy just to the right of the photo? With the pink plastic ball? If not, and no animals have lived in the house, what exactly is it?

My vote is for a cat. 

 It may be a horrible strategy...but it may not. Sometimes it is not about "getting the win" or proving that "you are the boss". It is about trying to get out of a situation (that was inherited through no fault of the OP) with minimal cost.

I'm not familiar with CA eviction laws, and only the OP can decide, but it sounds reasonable to consider a strategy that may return the unit quickly albeit at a slightly higher cost. Might the tenant trash it anyway? Sure, always a possibility. But I think that is a risk well taken in this situation if it looks like an eviction could be drawn out (and results in a trashed property anyway). 

@Tony H Truong Wow, that is a lot of money. Sorry I can't offer you any advice particular to your situation, but I do recall another rather lengthy thread about someone else that tried to recover money from a guru. Read through this and maybe that will help. 

https://www.biggerpockets.com/forums/79/topics/185...

One strategy might be to diversify across two or three moderately sized properties. I don't think you will get the same experience needed for a larger multifamily by doing a duplex first. Some, yes, like tenant screening, but the operations side will be quite different. Diversification will also help spread your risk across properties. You could have a bad outcome on the first property for reasons outside of your control - you wouldn't want that to be your only property.

Just thinking based on unit size, you could do a 4-6 unit to start. Use this time to get your systems in place. Accounting, tenant screening, maintenance contacts, etc. Then move as quickly as you can to one or two larger properties. You are in a great place to have the capital to get going. Use it wisely! 

Based on my interpretation of Fair Housing law, you are not being discriminatory. For occupancy limits, Fair Housing is primarily concerned with discrimination based on familial status, which does not apply here. You are within your rights to limit the number of adults beyond the limits set by local ordinance. I'm not an attorney, so consult one if you have more concerns. This link provides some more understanding of HUD's interpretation of occupancy as it pertains to Fair Housing.

http://portal.hud.gov/hudportal/documents/huddoc?i...

Here is an example of an Estoppel Agreement that I use. It solves a lot of these transfer issues, or at least makes sure you know what you are getting into. 

Estoppel

@Donald Cooley

Good questions. You should brush up on the local landlord tenant laws in Michigan (I'm assuming that is where the property is located), as some laws vary by state.

In Virginia, if the tenant has a valid and in force lease, they are protected from any changes. You must honor their lease terms. You can have them enter a new lease at the end of their term, or earlier if they agree. 

Another step that I highly recommend that you do is obtain an estoppel from each tenant. This is simply a form that the tenant fills out that states what they pay, do they have a lease, when does it expire, what is the security deposit...basically an abstract of their lease. You want to make sure that what the seller tells you, and provides via current leases, is also what the tenant thinks is the case in regards to their lease.

The seller must transfer all security deposits to you. It isn't their money, it is the tenant's, and you must hold it in escrow (requirements can vary by locality) until it is time to disperse all or some of the deposit.

Those are my initial thoughts, hope it helps. Good luck.

@Nat C. If this is a deal that you expected may have some hair on it, and you are comfortable with that, sounds like you are in control. Get the estoppels, figure out where the money is, and if you are comfortable with the possible legal issues, close. Good luck! 

@Nat C. One word - Estoppel.

It avoids the he said - she said that you are dealing with. If you have the tenant sign an estoppel, and the seller also signs off on it, everyone is on the same page. This is less of a question of who "owns" the security deposit, and more of what is the status of said deposit and where are the tenants on rent. If they paid security deposits you have the right to receive them. 

But lets see what happens without an estoppel and dis-honest seller and tenants...."Do you have a security deposit?"

-Tenant "Yep, two months rent!"

-Seller "Nope, never got one. Sorry, no money to pass on to you!"

@Rhett P. If you are looking in Los Angeles, here is the link. You'll need the Assessor's ID number, which you can also find from this site.

http://ttc.lacounty.gov/