All Forum Posts by: Christopher Kolasa

I have a three family under contract in Connecticut. It is a side by side duplex with a ancillary unit (converted garage into a single family) and after running through it with my home inspector and contractor, it's looking like I'm going to need to put $40k into it in just safety upgrades (3 unfit falling over porches, deteriorated window sills, smoke alarms, second means of egress). The purchase price was $230k, it's making $3075 per month, I went in without seeing the inside, it's nearby to my other duplex in an area I like. It's a big cost but it's easy enough to figure out, ie here's the is the most I can pay, take it or leave it. I'm in the price of the inspection ($650). Hunch is current owner's have moved to Florida and looking to get rid of this headache and tenant fiasco, they don't want to deal with them.

Here is the cost I can't figure out: Emotional and financial cost dealing with tenants and possible removal.

Tenants are all month to month at this point. Unit 1 had a woman who was just down on her luck, hated the two other tenants (brother and sister), the unit had lots of wear and tear, saying she was on her way out and she's been there for 3+ years, paying $1075. Unit 2 was nicer, large family, but head of house was already telling me about her being behind and willing to pay extra $100 each month to catch up. She was working at a Laundromat so worried she's making 3x the rent per month ($1300x3=$3900). The bungalow was the brother, strong minded, paying $700 who was smoking inside the unit, he's been there for 3 years. The side by side units are very desirable spacious 3 bed/1 bath and the bungalow is a bonus. Eventful day concluded with the cops show up during the inspection arguing about someone keying their car, a sort of gift, a sign of future interactions maybe?

Besides the price tag of the need repairs, each unit seems to be equipped with challenge tenants. Lawyer mentioned it has costed her $600 to $6,000 for an eviction and up to 3 or so months. Compounding the issue, Connecticut is landlord unfriendly, and with COVID, no evictions can take place till end of August (this has already been delayed). What kind of discount could I request to take on this risk? Should I request the sellers to deal with the tenants? Or should I walk? What do you all think? Would be great to also hear from people with Connecticut experience.

This would be a great addition to my portfolio to add cashflow as I can comfortably estimate getting rents up from $3075 (current) to $3500. Thank you!!

@Elena Koyun

How did you do that and what concession in the price did you get?

Hello Foster,Obviously this is an old listing, but was wondering if you have in mind any real estate agents that deal with investors in Deland. Would be great to expand my portfolio and looking for someone to assist. Thank you

@Brandon H. @Melissa Veazie

From the property owner's side and from the management side, is now a good time to buy or wait a few more months? How many new homes have come on the market in Jacksonville year over year and is there still a sustainable demand to accommodate these? Growth seems promising, but how does it feel for you?

@Ryan Allison , I am heeding the advice of @Jaysen Medhurst & @Filipe Pereira, I will likely go forward with an umbrella policy to protect my owner-occupied duplex (soon to be non-owner-occupied) and likely go without LLC protection at this juncture. This decision is location dependent due to the fact the property is in Connecticut and LLC's are expensive to maintain. I received a quote from my insurance broker for a $1 million dollar umbrella policy for +/- $160 for the year (tied in with my car and home insurance), all in all seems like a pretty good deal. This will also provide some coverage for my single family rental in Florida which is in an LLC with a partner as well as general lawsuit protections. My knowledge with these asset protection structures is limited (not a lawyer) but will probably pick up the rich dad LLC book to learn more. Anyway, they will probably suggest I create a 'parent' LLC in Wyoming and eventually put all other LLC's into this LLC for the best protection considering Wyoming has strong protections far greater than Connecticut which will help de-incentivize any lawyers from pursuing lawsuits. At this juncture my assets are limited and should be well enough protected under the umbrella. I think if I were to have 3+ properties in Connecticut (total value over $500k) I would revisit the LLC creation discussion.

@Filipe Pereira yes, the recommendation of my attorney is LLC (no surprise)! Regarding LLC's in CT, I believe they have an annual renewal fee of $150-$200, similar to Connecticut's handling of other professional licenses (expensive to maintain). This is a cost I would rather not incur and I believe an umbrella policy should be sufficient in my current case.

Filipe, how do things change in Connecticut under and LLC, specifically evictions? Also, you comment about a good attorney piercing an LLC, are you suggesting a different corporate structure may be appropriate upon property managing?

Thnx!

Thank you @Jaysen Medhurst for your feedback, at what point would additional properties require additional protection (obviously a very subjective question).

How can I protect my assets, I am owner occupying a duplex in Middletown, Connecticut. I currently live in the first unit with a roommate and have tenants upstairs, Unit 2. I plan to officially move out so my roommate will be taking on the entirety of the tenant responsibilities in Unit 1 (lease already in place), thereby will no longer be living here. I have heard many differing opinions on what to do with my asset protection in the landlord unfriendly state of Connecticut so I am worried I have no protections in place other than home insurance. How can I protect my other assets (401k, savings, Florida single family rental part of a 50/50 partnership LLC) with intentions to grow the portfolio.

Is it advisable to purchase an umbrella policy or form an LLC for my business here in Connecticut? Any suggestions on what I can do?

Thank you in advance. -Chris

Hello Ro, Are you living in New York? I would start by connecting with as many people from the area as possible from real estate agents, property managers, local investors, lender's, etc. I have a property in Middletown and from the area so would be happy to connect and offer any help if I can.

Good luck!

Hey @Nikki Cuozzo, I was in a similar predicament, I purchased a home in Middletown, Connecticut and one of the issues was a suspected underground oil tank, at least at the time it was a combo of an unknown fill pipe and unknown vent pipe. After searching for lot of advice, and the suspicion of a buried tank this became a unfortunate deal breaker. Noted a lot of properties on the same road had oil tanks on the DEP website, I believed I searched for Brownfields. I was concerned of a potential $10k-$100k cleanup if contamination bleeds into a neighboring property. All buried oil tanks will eventually leak due to the constant saturation and desaturation of the soil in New England, this one was likely 60+ years old according to the fill records and my limited knowledge of the history of the house. 

I spoke about it with the owner and this news became overwhelming for him. Deal breaker. He wasn't gonna deal with the tank. Tough to walk away but it was the right move for me even after months of a very slow negotiation, and work dealing with knob and tube and asbestos (out of his pocket). Costs became to high to get out of the nuisance for him but with no other choice, we knew where the tanks would be and instead of a $3000 survey of the property, he found someone that had this ground penetrating radar, took two scans of the suspected property, bam right underneath the vent pipe. A company came out and pulled the tank in a day, it came back fortunately dry. I believe the owner paid about $4000 to get rid of it and thereafter the deal came back to the table. 

Maybe would try to investigate with through the fill pipe with a borescope for some corrosion holes and cleanliness of the bottom to understand potential spill potential ($25 on amazon).

Good luck! Hope this story may help!