All Forum Posts by: Bryan Petrinec

I am in a partnership with my father and brother in a parent LLC that then has property LLC's under it. My father is down sizing and is in the process of buying a new home as his place of residence. Although we only have duplexes at this time in our LLC, is there any benefit to putting his new home in the LLC and have a rental agreement with my father?

On the surface, I feel like this is dodgy, but I cannot find any legal reason not to do this.  Would the mortgage of the new property need to be from another member or is it okay that he is also the mortgagee?  I feel like there is circular logic going on here, so help from the BP community is appreciated.  Before you all tell me to talk to a lawyer, if this is not flawed on the surface or illegal, I intend to do that next.

Some of the reasons why we are thinking about this is that my father is elderly, but still in good health.  That said, the 30 year mortgage will probably out live him.  And if he gets to the point where he will need to go somewhere for living assistance, we want the ability to rent out the house without any issues.  

His rent would only be the cost of PITI, so this would not be generating income, yet it would provide additional write offs. What am I missing??

 It was a friend of hers from HS.

Anthony, Carrie is spot on.  My daughter is going to UT and I looked in getting a duplex or small house for her to live in, have roommates and minimize expenses while she was at UT. As a long-term investment it might make sense, but if you plan to minimize costs, that is not the right path.  If you want to stay close to campus, you will be lucky to find anything under $500k and rents are ~ $600-$1200 per bed.  My daughter is in a 2 bed 2 bath with a roommate 2 blocks off of the engineering buildings and her half is $900/month + electric and water.  There are better deals the further you go out from campus, but then you miss out on the college life.  

Good luck at school and don't enjoy the college life too much!

Is TurboTenant able to accept online rent payments?  I looked at that a while ago but since it did not take online payments I moved on, but in general I liked what I saw.

I am currently experimenting with Rentigo and Cozy.  I have 1 tenant on each.  Just a quick rundown on what I have found so far:

- Rentigo

PROS: Nice dashboard, good mobile app, repair request management; able to set up late fees automatically.

CONS: Slow to pay - this is my first month using them and they are blaming payment delays on their verification process.  Tenant payed on the 1st and have not received payment yet (14th).  They say it is coming tomorrow. Also, unable to accept multiple payments or multiple accounts for the same rent. Cannot manage properties without having account.  Since I have 1 tenant of a duplex using it, i have no way to show/manage the other tenant in the software.  Therefore it shows 50% vacancy even though both sides are occupied.

-Cozy

PROS: ease of set up; it works.  Allows multiple payments for rent, allows for maintenance requests but does not auto notify selected vendors like Rentigo (that is a nice feature); text when tenant pays and when money is deposited.

CONS:  not able to set up late fees; no mobile app (but web site is mobile friendly)

Right now they both have +'s and -'s, but the lead right now goes to Cozy only because I have all the money in my account which is very important to this business.  

Not ready to go to a premium system with monthy payments.  Once I hit 10 units the economics make better sense.

Septic systems should be inspected by a licensed septic professional.  If they are cared for, just like anything else, they will last 20-50 years.  The biggest issue people run into is that if there is a major repair, your city/county may not allow it and force you to update your whole system,  which can cost upward of $20k.  Septic system regulations here in Texas change frequently, so be sure to understand what you can and cannot do.  Also, be sure to get a copy of the septic system permit before you buy and verify that the current system is what is permitted.  If the previous owner did rogue repairs, you could be asking for a lot of headaches.  

If this is for a rental, be sure to educate your tenants and have DO's and DONT's in the lease.  Just like any other sewer line issues, if it is general wear and tear/tree roots/etc. landlord is responsible.  If the tenant has the information and it is in the lease, any foreign material that causes issues is their responsibility to cover.

In all, they are not problematic if you know how to manage them.  I have a rental with a septic and my parents live in the country with a septic system.  For the rental, I use it as an excuse to stop by and change the drain fields every quarter.  Less than a 5 min job, and I get to have a look that all is well at the rental.  Don't let them scare you, just get educated about them.

I am also interested in the Killeen/Belton area and have been looking at that area for some time.  There seems to be a large number of multifamily on the market there, which makes me a little nervous.  Did they over build or is there something else going on there?  

Are there other BP members that can chime in on their experience in that area.  Not trying to hijack this thread, but I would also be interested in average tenant turnover.  

Before you say no, I would find out what kind of dog it is.  Unless you are prepared to evict the tenant, the dog will probably be there whether you say yes and collect a pet deposit/rent or say no.  If it is not a vicious breed and on the smaller side, I would consider meeting the dog and if it is okay, then have him sign a strict pet agreement, add a non-refundable deposit and consider adding a pet increase to the rent.

It is more a judgement call in my opinion.  If you are in a hot market and can get another tenant quick, then see if he will leave with his dog and get another tenant.  If you decide to allow it with the pet agreement/deposit/rent increase, then be sure to have a frank conversation with him that the dog situation is not cool and you will be keeping an eye on his tenancy and this is a strike against him.  Who knows, he might be a great tenant, pays rent on time and otherwise is worth the extra headache up front.  Also, if they are willing to pay the deposit additional rent, they are probably decent pet owners.

But what ever way you go, don't think for a minute that you saying no will keep the dog out.  It is probably already there.

Hello @Tim Wang and welcome to BP and the N Austin area.  I am fairly new to real estate investing as I just acquired my first duplex in Sept. and recently closed on my 2nd and 3rd duplex last week.  Austin is a fickle market, but you can still find deals, especially if you are looking to expand into the nearby areas.

I have taken the approach of Just Do It.  I analyzed many deals, but I got to the point where the ones that I thought were good we gone before I could even provide a bid.  So I recommend getting proficient in analyzing deals, and get your funding in place, especially if you plan to go conventional.  Provided my numbers work out, I take the approach that these first few will be learning experiences.  

Even if the Austin market slows, which I expect it will at some point, I am confident that I can at least break even in the property and I have made some money along the way.  Obviously, I am hoping for much more than that, but that is the worst case scenario barring anything catastrophic. My goal is to get 20 doors in the next 5 years, but that doesn't mean that I wont exchange lesser performing properties for better ones.

Best of luck,

Bryan

Just started using Rentigo, so no real  life data yet.  I selected this one because it allows you to accept ACH, CC, & Debit cards, but also allows you to select who pays the fee.  $0.5/transaction for ACH so I pay for that.  CC & debit cards are a % of the payment, so I have that on the tenant.  Other features I like is that is has a repair request portal and you can set it up to not accept partial payments.  Decent dashboard and the price is right...free. 

Welcome Sarah.  I am fairly new to the world of real estate investing and also in the Austin area.  Getting deals in Austin proper that cash flow seems near impossible right now, but I have purchased 3 duplexes in the last 90 days-ish (Closing on 2 next week) in surrounding areas that are good deals in this market.  Just curious why you are choosing to become a remote investor so far from Austin when there are good deals closer to home?  

I am honestly curious, as I am window shopping in other markets as well, but too nervous to leave it in the hands of people I don't have a relationship with that are key to long term success - that being an agent and a property manager.  Not saying there are not good ones out there, but wondering what processes you are using to vet them remotely.

Thanks and best of luck