All Forum Posts by: Brady Miller

Hi - thanks for your input - Here's the update, nothing too flashy.

I did hire a real estate lawyer who searched the person's name and came back with: she'd had 3 evictions started, one that was completed (the one I found) and a charge of check deception. 

I emailed the property manager and I notified him of my intention to terminate our contract. He didn't put up a fight (like he had before when I had resisted the placement of this tenant). So, I'm back on the hunt for a new PM in Indianapolis. 

I appreciate everyone's thought-out help, and @Adrien C. - if you (as hypothetical PM) can't handle if I'm doing due diligence during the very first tenant placement (especially considering I found three strikes: eviction, check fraud, and shadiness around disclosing repair costs), I really don't want you as my PM. 

Hello! This is long, but I really do need help, so if anyone's dealt with similar issues, I'd love to hear input on options. 

I closed on my 1st ever rental property (SFH) in Indiana November 2018. Got it fixed up and chose a well-reviewed property management company based on BP reviews and my own conversations with them and I signed an agreement about a month ago.

Issue #1) We agreed that prospective tenants would have no evictions in their history. This was not in the property management agreement itself, but was stated in emails from the prop manager. They found a tenant quickly, provided me the screening report which showed no evictions. I did my own check on the Indiana court site and found the prospective tenant did indeed have an eviction that went all the way to judgment. The address matched, and the tenant has a unique name. The lease is to be signed on move-in day which happens on 2/18, just a few days away. I contacted the property management company and said that this was a disqualifying issue for me, I did not want to proceed with this tenant. They balked and said that because the deposit had been taken, there was no way to back out, claimed that the placement of a deposit was somehow legally binding. I know time is short now, but I don't feel good about this. I have tried contacting a local real estate/landlord attorney regarding this issue. 

2)  Finishing touch was a simple repair (inspector had pointed out the dishwasher gasket had needed to be replaced). Property management company said "we don't do work on appliances" - disappointing since this could be done by anyone who's remotely handy with a $15 gasket and 20 mins tops. Instead, property manager contracted their vendor (a very well known local appliance shop). I was supplied the *property manager's* invoice which merely said "gasket repair: $240.50." 

Whoa. Everybody's got to make money, but this struck me as...high. I called the appliance shop itself and said "I want to follow up on some work you did at my property, here's the address, can you send me over the invoice?" One time I got "I'll have someone call you back with more info on that", one time I got another brush off but not before they let slip that the repair was billed at $180 *hmm* and the third time I spoke to a gentleman who said he was the owner and couldn't get me that info because he just changed to a new records keeping system and yada yada yada...

Then I get an email from the property manager saying "[appliance store] s calling me saying you're requesting the invoice for the repair work. You get our invoice. Not theirs. Sorry for any confusion." 

I re-reviewed the property management agreement and found no mention of markups on maintenance work that's done in or out-of-house, and a vague description that "property management company will provide bills and invoices." I have not yet paid the repair charge for $240.50. 

So: 

Questions on issue #1) Has anyone else been in the position of wanting to override the property manager's tenant decision (based on solid factors such as eviction history)? Can you? 

Questions on issue #2) Has anyone else tried to do due diligence on repair work by getting the original invoice from a vendor? Do I have a right to this info? Does a property manager have to disclose any markup on work done by a vendor that the property manager initiates?

I feel like blind trust is never the answer: trust but verify, right? but...what can I do? 

Ultimately, all I want is: to have a tenant that meets the previously agreed upon criteria, not: oops, our screener says this tenant is good to go, don't know what to tell you about that eviction, can't back out now.

AND

A breakdown of parts and charges on repair work from the original source so that I can see what happened and know that the property manager is not pumping up the total by (potentially) 33%. 

I'd love to hear from anyone with insight on these matters. Thanks!

Does anyone include and leave a security system installed for the tenant as a kind of value added service? If so, are you finding it at least more than pays for itself? 

Hi @Shawn Holsapple - I am interested in hearing your take on Indianapolis property management - and also Indy TK providers, if you have thoughts there too.
Specifically, I am looking at Lawrence and Beech Grove. I called Red Door property management and they took a few days to get back to me but their operation *seems* to be good. 
I'm out of state and this is for a first rental property. Thank you very much. 

Hi @Nathan Gesner or others - does the "new code" 36" off the floor apply to new construction or also to new basement additions on homes built prior to said code? 

What if I'd like to add/modify the foundation wall to add a window to meet the code - is this cost prohibitive?  Thanks. 

Thanks @George Blower - My understanding of the solo 401k is that even with both types of contributions, the 59.5 age limit applies for withdrawal (to avoid penalty). I probably wasn't too clear in the initial post. Is it such that the solo 401k after-tax contributions can be withdrawn before 59.5 (not counting the borrowing allowance - I'm interested in actual withdrawals so as to replace some income prior to age 59.5)? Thanks

Hi all! I am interested in starting my REI business to meet a few specifications & I'd like your input on what kind of structure would work best. I understand I'll need to talk with a CPA and attorney too. Thank you in advance.

My business would ideally be structured to:

1) Invest in notes and be structured so that if the property were acquired by the business through DIL or foreclosure, I could legally coordinate a remodel/resale even though i would not be "swinging hammers" personally. 

2) Protect my identity - because of the nature of my regular job, I do not want to do business under my own name. I won't get into it, but this part is extremely important, there must be a clear delineation between my existing (self-employed) business and my yet-to-form real estate investing business both in name and in structure. 

3) Be able to fund some investments through a retirement account like solo 401k AND fund some investments using after-tax money to begin replacing some of my income prior to retirement.

I'm self-employed in my existing (non-real estate) business with no employees, and so I will be investigating solo 401k. 

What kind of structure could accommodate these needs? 

Thanks again!

Thank you for your reply @Dmitriy Fomichenko - I am learning more about the idea of a disqualified person, and the limits of it. Would me being a disqualified person negate all 4 scenarios I mentioned about using a solo 401k to fund Business B? Thanks

Hi - I'm trying to wrap my head around the relationships and rules about a potential solo 401k through my full time job (non-real estate: Business A) and a future real estate investment business, specifically notes (Business B). I have not formed a real estate entity yet.

I am self-employed at Business A and do not have any employees except myself. 

I have a Roth IRA (not self-directed yet), and no other retirement accounts yet.

If I form a solo 401k through company A, can I provide all funding for Company B investments? Do I need a particular entity type for business B to receive this kind of funding transaction?

Also, say I purchase a note in company B - can I fund part of the purchase price through the solo 401k and part of the actual note purchase through a SD roth IRA?

Could I fund 100% of the purchase price of the note within the solo 401k and then things like servicing, legal fees, etc through the SD Roth IRA?

Lastly - I believe I understand the rules regarding dispersal, but want to make sure: let's say I acquire a property (not a note this time). Is there any way above-board to enjoy personal use before age 59.5? Paying taxes and penalties etc? Or is it simply locked away in the plan until age 59.5? I am absolutely not interested in trying to fudge, but curious about use rules in this case.

I understand that ultimately, i will be hiring a CPA and lawyer before moving forward, but your input is helpful for my understanding, thank you!

Hi there! I'm Brady, and I'm learning a ton about note investing from podcasts (thanks, Brandon & Josh! and thanks Chase & Robert of note mba!) right now, and books, and my goal is to keep learning, connecting, and purchase my first note with mentorship by August 1, 2017. I'd like to start with non-performing 1sts and potentially move to include seconds over time.

I was hooked by the idea of notes through the bp interview with Dave van horn & the other episode w Bob Malecki, learning that I could help people stay in their homes, and in knowing that one of my strengths is attention to detail. My long term goal is to be able to work fewer hours and retire from my job in 20 years.

I don't have a real estate investing background per se, but I did sniff out a diamond in the rough at a great time for our first primary residence and we're slowly fixing it up as we go!

I've had a pretty good few weeks, already getting to meet Scott Carson & Bob Malecki in person! I've also already connected to the local meet up group and I look forward to continuing there as well.

In my everyday job, I am in the mental health field and I love what I do! (But of course, I can only fill one of those roles at a time, so you all get the investor-me 😀).

if there's anyone in the greater Seattle, Washington area who's experienced in notes, I'd love to buy you a coffee (and a pastry!) and pick your brain. I know I have a great deal to learn but I'm determined not to get paralysis by analysis! Thanks for reading!