All Forum Posts by: Bob Lowry

I am a real estate broker in the SF Bay area and interested in starting a property management offering.  I am interested to learn how others in CA are handing the tenant security deposits, rental payments and owner reserve funds.  I have tried to open a RE Broker Trust Account at several banks and am being told each tenant and owner need a separate bank account due to IRS reporting rules.  CA BRE suggested using a Broker Trust account, but I have not found a bank that will support this.  Any, all suggestions appreciated.

Anyone familiar with "landlord insurance" that insures against loss of income due to vacancy or eviction?

Heard about it on an investment webinar as being a feature they offered to protect the revenue stream of the investment, but have been unable to find any providers, costs, etc.

Thanks,

#1 Notification - make sure you follow the proper notifications process inyourstate before you enter. This can create headaches. 

#2 Move In Move Out Form - use this at time of lease signing and move out. Protects both parties on paper and helps if you need to claim use of deposit.  Add pictures as back up. 

#3 Lease - make sure your lease is clear on when you can inspect,  how to handle violations (curable vs incureable) and what the eviction process is in your state court system. 

#4 Tenant Screening  - before renting next time do a thorough screeing: credit, employment, court,references and follow proper notification if you deny a tenant. 

This is the exact process I followed. Created a self-directed 401k and then directed it to invest in a c-Corp that bought 2 franchise areas.  There are many rules and filings to follow to be in compliance.  Sold the franchises back at a 40% profit and have now opened a real estate brokerage and property management firm so I could be active in the business.  Same rules for filing and reports as well as employees qualifications, but allows me to manage the day in an industry with a lot of variety and opportunity.

It's a new year, and I am interested in using my IRA and 401k funds to make some real estate investments. Can someone provide input on how to use these funds, tax compliance, vehicles to use, providers to assist in managing these funds, etc.

As an investor, I found that many realtors and property managers just did not get it when it came to investors goals.  Result: i just started my own real estate brokerage and property management firm, On Demand Realty.  You can view my PM pages on my site and provide responses to question below.

Question: I know what I am seeking in a property manager, but would like to get pro's and con's from other investors and those in the PM field of what sets the good ones apart from the bad ones in the minds of investors and industry peers.

All opinions are greatly appreciated.

Would like to get some feedback on the pros and cons of using a property manager.  I have seen some that offer online portals for tenants, vendors and owners and therefore keep all communication and financials tracked.  I also can see the benefit in helping to find tenants and manage the late night calls, financials, and general headaches.  Wanted to hear what owners feel might be pain that a property manager can solve.  Also at what expense (fixed rate, %of rent, etc.)?

Thanks all. Will be taking your advice and getting an attorney to get this settled.

To make sure commentators have the correct data:

Her lease expires on 6/7/14 with no legal right to remain. She has breached to covenants of the lease by denying a landlord inspection per the lease, in separate sections. Her rent was due on 6/1 and has not yet been paid so she is default for rent payment. She has been asked nicely over the past month to cooperate, but continues to state the same thing, "I will use my security deposit in lieu of last month's rent, I will not show the property while in it, and I will stay until the end of June."

After trying everything to accommodate her, the strategy is now:

3 Day Notice of Cure Breach in the lease for inspection or Quit

3 Day Notice of Pay or Quit for late peyment

Lease terms are defined that lease expires on 6/7/14 and there is no month to month allowance or extension permitted so she must vacate.

I have 2 prospects waiting for the home that are waiting to place 2x month rent for the security deposit, $3600, plus pay $1800/mth going forward.

All this said, if the current tenant has no place to move to with her family and children, I have given instructions to the attorney to accept an additional security deposit of $1000 cash, a cash payment for the remainder of the month at a 30% increase and a newly signed lease that terminates on 6/30 with no possible opportunity of extension or reversion to a month to month.

Based on her broker and property management experience, as well as concern for her personal credit score which was 760, it is my belief that being served with 2 - 3 Day Notices of Default and that an attorney has been engaged, she will decide to either cure the defaults and move on 6/7, or find the cash, sign a lease for 23 days with payment and then move on the 30th.

Wanted to make sure all had the details plus the facts that as a landlord I feel a responsibility to my tenants and their tenants, hence the opportunity to extend, but also that to get the opportunity they need to be held accountable. Needs to be a mutual relationship. I am not chest thumping, nor being a door mat, but instead giving her the opportunity to make the right decision.

Thanks again to all for your valuable guidance, insight, and honest feedback!

Thanks all. Will be taking your advice and getting an attorney to get this settled. Tenant is a licensed CA broker and works for a property management firm in the area, so guess she is trying to use her knowledge and learning's to screw a landlord. Tried to use be accommodating, but she refuses to cooperate. Hopefully with the breach of the lease terms the process will move faster. Thanks to all for the valuable advice!

All, thanks for advice. I am trying to be respectful of a tenant's life, but protect my property and interest.

The interesting thing is that she is a real estate broker so I would guess is trying to use "her talents" to get some free rent. Will enlist the assistance of another broker to get her out. Am sure that this mark on her record will not serve her well professionally or personally.

Again, thanks to all! Very much appreciated.