All Forum Posts by: Corby Goade

Is your agent giving you guidance around this? Much of the negotiations during due dilligence depend on demand for that specific property- hopefully your agent has build leverage in to your contract that they can use to help you with this piece. 

First of all- the security deposit isn't "yours," but it isn't the PMs, either. The security deposit must be kept in escrow, but it belongs to the tenant until the PM have documentation allowing them to contractually use those funds for damages. 

Second- these developments where the same person develops, builds, and then requires you to use them for management- they always suck. Every. Single. Time. 

It's not a direct answer to your question, but it's very likely you have no contractual leg to stand on. I'd sell the property and 1031 in to something without an HOA.

Just have your lawyer contact them- they have no legal right to withhold funds or documents, those are your property. I wouldn't spend another moment of my personal time on it. 

Safely or not, it's a rare day that the seller in a sub-to deal walks away in better shape. That is, unless the loan gets called, then they hit the lottery. I've seen that happen many times. I'm a fan of win/win deals. 

Not a fan. I'm starting to see a lot of these that were set up with balloons three years ago and now the buyers are in serious trouble too, negative equity, no capital and no real income that will allow them to refi. Just had someone bring me one of those situations yesterday and wanted to know what kind of secret tricks there are to let them keep the property without coming up with another $100K and getting a job. 

Just hire a professional PM. They'll have a network of tenants, professional marketing and they know pricing better than a self manager will. 

I'd imagine you've already lost at least two years worth of management fees in carrying costs alone. You are'nt saving money (or time or avoiding stress) by self managing. 

If he's lying to his boss, what makes you think he'll be honest with you? 

Hard pass. 

Contrary to popular belief on these forums, a GOOD PM will save you money and headaches, not the other way around. 

I could go in to all kinds of details with the horror stories I've seen, but I'll let BP do the work for me. I'd challenge you to scroll through the forums here to see all of the self managers who are dealing with nightmare tenants and situations in order to save a few bucks per month on PM. Although it's possible, most new investors don't have the skills, resources or network to effectively self manage. 

As a matter of fact, I just posted on another thread by a self manager who is being constantly harrassed by their tenant in retailition for a very minor rent increase. That's a small problem, but what about tenants who are professionals and know the laws better than their landlords? They can smell an opportunity from a mile away. 

Look at PM like homeowner's insurance- it seems like you are wasting money until your house burns down, they you'll be happy you "wasted" money on those premiums for years. 

Your time is the most valueable asset you have- use it to find deals and make more money, not negotiating with your tenant over lightbulb installations. 

Tell him you are sorry the unit doesn't work for him and that you'll let him out of the lease penalty free immediately. 

You'll never convince a tenant that they are getting a good deal, especially as a self manager, no point in even engaging in those conversations. 

Typically setting up the LLC is the easy part. In my state, you can fill out a form on the SOS website in about 3 minutes and pay a one time fee of $100 and you are done.

The LLC isn't the important part, it's the operating agreement- you should defintiely hire an excellent and local attorney to do that for you. I'd venture to say that an experienced attorney propbably wouldn't charge much, if anything at all, to set up your LLC if you are working with them on an operating agreement.

Best of luck!

Yep- location is important. Best if the people you work with are in your area and know your market. 

Also- pro tip: The people in your market who are killing it won't ask you for compensation. Generally, when people "make it" they want to share their good fortune with others and they understand that whatever they give freely comes back to them tenfold. I've found the people who want to charge for their time and "mentorship" typically need the money because they are struggling- maybe not the best person to take financial advice from. 

Best of luck!