All Forum Posts by: Michael Choi

Wow, thanks to Andrew Yang pushing for UBI, President Trump's proposal to send $1000 check to Americans as soon as in next two weeks!

https://www.youtube.com/watch?v=3WU1PR6UK5k

This was totally unexcepted and huge slap in the face to Biden and Bernie Sanders. 

This is some scary **** going down, pretty much it involves everyone and effected our daily lifestyle.  The next 4 weeks are going to be critical how this plays out and I really hope the Federal will step in soon enough placing some kind of debt relief program to help us all.   I wonder who's gonna be the winners during this crisis. 

Looks like Freddie Mac and Fannie Mae has safety measure to postpone mortgage payments for single-family homes, does this applies to Multifamily as well?

https://sf.freddiemac.com/articles/news/important-seller-servicer-information-on-potential-impacts-of-covid19

Not just landlords, but businesses with loans will be hit hard not to mention those who lost their jobs overnight is insane, this is about to get seriously ugly.  I guess nothing is safe in terms of investment vehicle, I hope we are not heading towards like Italy.

https://www.euromoney.com/article/b1kq42s3yscx9g/coronavirus-italys-banks-and-smes-face-crisis-if-shutdown-persists 

Does anyone know how long is the duration of eviction moratorium in Los Angeles Mayor Garcetti just announced?  With restaurants and retails closing due to Covid-19, this is truly haunting times for both landlords and tenants.  

@JD Martin I guess the value I'm considering is learning their operation and see how profitable this short-term rental is without having myself to learn everything from scratch.  No, they aren't getting any discount, I asked for full rent/deposit and no incentives until we renew our contract. 

@Joe Splitrock My lawyer is rewriting the lease agreement and he too suggested doing a month to month contract.  I think that's a great suggestion (thank you!!) and if they won't agree to the new terms I will move on to the next applicant.

@Thomas S. I'm at the property almost every day since I use another unit as my office also I'll be monitoring the tenant screening as well as financial report.  I want them to succeed and be highly motivated, they did offer to give incentives if I gave them a break on the rent which I declined.  I think having a month to month term and see how things turn out I plan to renegotiate the terms.  Thank you for your suggestion.

@Julie McCoy I found through Liana Enkelis (https://pasadenahomesharingnetwork.com/) who worked closely with the Pasadena committee for the upcoming regulation.  She is a Superhost on Airbnb and mentioned LA is doing something very similar to Pasadena.  You can contact her directly if you like to find out more details.

@Lee Ripma Thanks Lee, I'll keep you posted.  I have friends and families who own multi's keeping a close eye on me as well lol.

Wow, thank you everyone for all the replies sharing your thoughtful concern and suggestions. 

@Stan Hill In the lease contract they've included in the lease agreement to apply for a proper permit, short-term occupancy tax and obtain a commercial short-term rental insurance along with Airbnb Liability insurance.   

@Lee Ripma Yeah, as individuals they have credit ratings above 800 and passed the screening test.  I've decided to go ahead and give it a go, if all good we can potentially partner up with other units.

@Karen Margrave So sorry for your bad experience, wow 34 beds is just crazy especially when you've rented out to a YWAM, aren't they non-profit organization?  What a bunch scammers, I hope you filed a lawsuit against them.  I've realized this could happen to anyone even with regular tenants.  At least my applicants are upfront and proposed their plan backing up with their current Superhost status with 5-star reviews.  They've added a couple of more clause to the agreement upon my request, I'm having a lawyer to go over them just to double check.  Hopefully, I won't have to experience a bad situation but you never know. Crossing my fingers.

6. SUBLETTING OR ASSIGNING: TENANT agrees not to assign, or sublet the premises or any part thereof for a period exceeding 30 days (long-term sublease) without first obtaining written permission from OWNER.  

9. LIABILITY, PERMITS, BUSINESS LEGALITY: TENANT shall obtain proper permit to legally conduct short-term transient occupancy. TENANT will remit proper transient occupancy tax when applicable and retain full liability for compliance with city, state, and local ordinances. TENANT is personally liable for obtaining and maintaining any applicable insurance to fully indemnify OWNER from claims arising from injury, damages, or loss of personal property.

@Michael McKay   Thank you for suggestions, as far as I understand LA regulation will be requiring Airbnb host to use the residence as their primary while renting out other rooms as short-term basis hence they will be occupying the unit.  The tenants agreed to provide commercial ST rental insurance as well as paying for GAS and Electric.  I cover mainly water and sewage since it's shared with other units.

@Shelby Pracht Yes, that's what they proposed saying they will keep it a top notch to maintain their Superhost status.  I think your suggestion to ask my insurance agent is a great idea, that way my agent can keep up with their commercial insurance status, Thanks!

@Myka Artis Me and my wife deeply thought about hosting Airbnb ourselves but decided to try out the new Airbnb co-hosting program.  We offered to furnish but they insisted bringing their own since they know exactly what their clients like based on their experience, I have no issues with that.

@Thomas S. They offered incentives if they I give them a break on rent which I declined and suggested to pay full rent and no need for incentives.  Since we are starting out I want them to succeed and be motivated while I don't have to lose a portion of my rent due to not working out for whatever reason.

@Julie McCoy Thanks Julie for recommending those companies, hopefully, my agent deals with them.

@Roy N. Yup, added in the clause

12. ALTERATIONS: TENANT may, at times need to make an alteration to the premises, including but not limited to aerials, lighting fixtures, washing machines, dryers or other items. They will first obtain written permission from OWNER. TENANT may change or install new smart locks for ease of guest entry, install smart home devices, smart thermostats, but will not paint, or wallpaper said premises without OWNER'S prior written consent, TENANT will not place placards, signs, or other exhibits in a window or any other place where they can be viewed by other residents or by the general public.

@Manolo D. Yeah, I totally agree with your suggestion, I was first wary of them providing their own rental agreement but upon reading through it wasn't all that one-sided which made a good impression on them plus they agreed to add few additional clause to further protect myself from liabilities although I understand nothing is bulletproof.

Thanks everyone for the reply.

@Roy N. Yes, my lease agreement prohibits from subleasing hence why they want me to use their agreement which includes my written consent.  All tenants applicants are required to apply and show proof of rental insurance before signing the lease.  And yes sublease feels risky that I won't have any control but they argue their higher price point and how they set up the place acts as a screening for more affluent guests.

@Account Closed Yes I have and I don't want any additional headaches haha.  They are moving out of a three bedroom condo they lived for the last three years due to landlord selling the property.  I spoke with their landlord and it seems legit and never had an issue with them.  Sometimes I wonder if applicants give out fake reference number...

The new applicants say they will clean and maintain the property every day for their guest and to maintain their Superhost status and it will have less wear and tear since all the rooms won't be occupied all the time throughout the year.

I have a newly remodeled three bedroom/three bathroom unit in the middle of very trendy Los Angeles neighborhood (no rent control) it's a perfect location for hosting on Airbnb, I thought of hosting myself but didn't want to add any additional working hours to my current full-time job so I made a request to Airbnb co-hosting program and that's how I came in contact with the current applicants.  

Overall, I don't feel comfortable but my wife thinks it's a great idea and that they will keep up with the maintaining the house clean upon looking into their profile on Airbnb.

Hello everyone,

I just thought I should leave an update.

TLDR: In short, I got my unit back and learned a ton during the process.

I think I have made every newbie mistakes in the book, I wanted to handle it quickly and nicely but the tenants tried to use that to their advantage.  So glad my wife pulled me away before falling into a deeper ditch and letting the pros handle it.  In the end, we settled in court and their attitude totally changed when faced with the ultimatum.

Here's what I learned,

1. Hire a lawyer and let them do the dirty work for you.
2. Trust your lawyer and you will sleep better at night.
3. Don’t try to negotiate or settle before the trial.
4. Learn everything about your tenant and it’s best they don’t know anything about you other than you are the landlord.
5. If the tenant tries to make contact with you just refer it to your lawyer for them to handle it appropriately.
6. Keep notes meticulously on every interaction between you and the tenant in case they make any false claim against you.
7. A settlement is essentially negotiating and I gave them a deal it was no-brainer it would have been stupid to refuse and they did refuse the first round.  The second round my lawyer turned the table to my favor LOL.  I took inspiration from Gary Vaynerchuck quote:

“I like getting deals done, so my negotiation tactic is to give a better deal to the other person. Because I know exactly what to do with my portion. Too many people get caught up in negotiating the perfect terms. Speed is so much more important. Provide value and move on.”

Thanks everyone for your support and kind replies, happy holidays!!

Michael

Hi,

I have potential tenants (husband and wife) interested in renting out my 3 bedrooms home who will use one bedroom as their primary residence and rent out other rooms through Airbnb in Los Angeles. They sent me their own drafted lease agreement saying it needed to add sections to indicate my consent allowing Airbnb rentals adding protection that I won't be able to terminate the lease using Airbnb and sublet short-term rentals as a breach of contract, I guess it's a reasonable concern for them.  (I'm having my lawyer reviewing the document)

Their background check is all clear with above-average credit score, the one thing that bothers me is their source of income are self-employed marketing business and Superhost status on Airbnb meaning I don't really understand their earnings.

What are you're experience renting out to tenants who use your property to host Airbnb?  What are some liability issues I should be cautious about?

Thank you,

Michael

Thank you very much @Kim Meredith Hampton  I'll ask my lawyer to draft one out for me under California rules.  I really appreciate your help, thanks again!!