All Forum Posts by: Jeff Bridges

 I would call the upstairs tenant's renters insurance policy and make a property damage claim with them and request an adjustor to come document the damages to your property. They brought an unauthorized appliance into your house which then leaked into the downstairs unit. They will write up an estimate for repairs and what they would pay for your damages. At the same time, get estimates from contractors of your choosing to perform the repairs and make sure your estimate matches that which insurance wants to reimburse you for. If not, you need to advocate for having them increase their reimbursement before you sign any releases related to the claim or accept any payment. They should also reimburse you for any emergency water damage repairs like carpet drying from the likes of servpro or local water clean up professionals. You don't have to wait for approval for emergency cleanup costs since those could result in mold if you dont act quickly. They'll make you whole down the line when you share receipt. Then have the tenant submit their own claims for personal property damage  with their own policies and deal with replacements on their own. Don't get involved with their personal property issues and let them know the same. Execute repairs quickly to your property, wrap up the claim to get money from their insurnce and move on. Make sure they dont attempt to connect another unauthorized appliance. If it works out and you get made whole from their renters policy, you should not have a loss history against your homeowners/landlord policy. good luck!

I dont think there is any benefit to charging yourself rent. your rental business income is taxed as pass through to your personal taxes. If you charge yourself rent, you both are receiving income and paying an expense as a tenant, which is a wash. So only thing I see happening is you creating paperwork for the sake of paperwork. also, when you occupy a rental unit, it becomes your primary residence and you no longer can claim normal rental property deductions on the unit for the days in the year the property is not in service as a rental property. Imagine what a tax audit would look like? Who is the owner on the deed of records and imagine their confusion when you said you were your own landlord paying yourself rent... That won't fly... You might have different options if property was held in an LLC and the transactions were real bank transactions to your LLC account, but even then, its a wash since LLC is pass through to personal and you would be recording both an expense and an income resulting in no benefit(not a tax professional. just opinion.)

source:

https://pocketsense.com/can-declare-rental-properties-primary-residences-8116.html

 Consider checking your lease for these actions to be considered violations and if nothing present, consider modifying your lease for future renewals to include rules that prohibit storing of junk vehicles, personal property etc. on the exterior grounds of the property. You can even prohibit drying of clothes outside, commercial signs, etc. based on what other landlords have seen in the past. No storing of indoor furniture in the outdoors (common sense, but not always to tenants). Then when this happens, you provide a notice to cure or quit since it is a lease violation... Talk to other landlords to get the best rules and regs they already include...

No HOA fee for the townhouse? I saw that missing from the numbers above. Just know that you will not have the luxury of handing over to PM at any time in the future or risk negating all future annual cashflow. So if you have to move in future, you will likely need to sell.

 I mentioned earlier in this thread a solution which allows this. BofA allows you to request an employee deposit only ATM card for your business checking account. Tenant doesn't deal with account numbers or tellers. They get a ATM card and an easy to remember PIN and deposit their check 24/7 at any BofA ATM. The tenant has a unique debit card that is tied only to them and the deposit record contains the ATM card used for the deposit.

From FAQs:

You can request cards for your employees, which will allow them to make deposits only. Each card has a unique card number and individual personal identification number (PIN).

Source: https://www.bankofamerica.com/help/bus_debit.go

Check with your lender for the cash out refi phase plans. They can tell you what they allow. I was only able to secure 75% LTV for a cash out refi where purchase loans might allow 80% LTV. Just so you can be fully aware of what you should be allowed to borrow...

 Cash doesn't bounce like a check. So what is the advantage of the money order vs. cash deposit in this scenario when this is a rental property specific account with one tenant depositing rent in it? As long as it's not a personal check of course... You can still send a rent receipt via email... Just curious why it would need to be more complicated than depositing cash...

 This is correct. You need to open a business checking account with BofA and request a deposit-only ATM card. They issue several of these for free which you can provide to different tenants. The hitch is you need to keep a 5k minimum monthly balance or there is a $15/month service fee. You decide if you can keep a min balance or accept $180/year fee for this convenience and avoiding lost checks in the mail or any excuse, since there is an BofA ATM in every town. They can deposit any combination of cash or  check so there is no excuse. ATMs accept the rent 24/7. use this with one of my only cash tenants. Best decision ever to avoid having to manually process their cash deposits monthly and not having to coordinate rent drop off/pickup with the tenant...

Current prime plus 1% rate for penfed HELOC means 5.5% interest rate (and will only go up from there since its variable) for those particular loans. FYI in case that helps you all do your calculations to see if worthwhile. fixed 30 yr I recently got at 4.75 for a cash out refi. just food for thought..

 If contract says he must pay within 5 days of lease signing, he is now in default of the contract, and you are under no obligation to allow him to move in. FYI for future, that clause is helpful for people signing the lease weeks in advance, but if you do it days before move-in, then you can get burned the way you did not accepting funds at lease signing. In this case, it was that much more important to collect certified funds at lease signing and continue to advertise the property until you receive those funds. Lots of flakey applicants that dont follow through. I would be inclined to move on and continue marketing the unit for other applicants. Let him make all the threats he wants, he is in default of the contract and has not paid any funds per the contract stipulation. If you do relent to his threats and allow him to move in, he looks like he is going to be a high trouble tenant that you will have regretted allowing to live in your unit. He hasn't moved in, hasn't paid squat, and already is threatening to sue? Imagine what happens if he discovers ants or some minor maintenance issue. ugh..