All Forum Posts by: Jeff Bridges

What is your intended use for the property? Lease it out retail? I've seen banks re-leased out as starbucks or bar/restaurants. The cheapest path appears to be to remove the vault door and prevent liability of someone getting locked inside and use the inside as a store-room. Or sometimes the vault door could be permanently rendered unsuable and placed in the open position behind plexiglass and maybe be used as a design accent. Just some ideas if you dont want to demo the vault. 

Another suggestion: hire someone to fog the affected studs with professional deoderizer/sanitizer after you have removed all of the old insulation which has to be replaced. When I had a mouse infestation behind the walls with heavy mouse urine smell, I hired a cleaning pro who had a professional thermal fogger who used steri-fab/ sporocidin and eliminated the smell. You need to neutralize the urine to remove the odor and sanitize it as well since there were pests there doing their business. A fogger hits all of the surfaces quickly, dries quickly because its not a moisture saturating fog and you can then close up the walls once you confirm the smell is gone. Or DIY, you can use "Natures miracle" spray which is sold at retail stores which is an enzyme based cleaner that works great on urine and will break down the ammonia (and strong associated urine smell) in urine that makes it pungent. I dont recommend covering the studs with paint until youve sprayed or fogged those studs... Otherwise you just cover things up and risk not doing so effectively. good luck!

 I will correct you there as I was in your shoes a while back. You do not necessarily need a commercial policy when you exceed 4 rental units. You can get a personal policy with more than 4 units, just not with GEICO due to their underwriting standards. GEICO had notified me that their limit for rentals under their personal umbrella policy is 4. I switched over to an independent insurance broker/agent who got me setup through Travelers (while I moved over all of my other policies away from GEICO as a requirement of obtaining the umbrella) and they do not have similar limits on number of rentals. I dont know the exact limit but I recall being told there is no limit. So yes you can get commercial, but it is not required.

this link also had a good explanation of how umbrella policies work:

https://www.financialsamurai.c...

I believe this is common for properties whose attics are converted into living space for the new area to be more difficult to keep cool. Usually the roof absorbs alot of heat from the sun, but they are usually vented helping to dissapate some of the heat out of the house plus the insulation between the attic and conditioned space prevents the heat transfer. When you build an attic, you are basically putting conditioned space right up against the roof surface and there is less room for venting to naturally let the heated air escape. You're only options are to beef up the insulation between the roof and the conditioned space to prevent heat transfer or add an additional AC unit to help keep that area cooler. The previous owner probably converted the attic into the current space but was too cheap to also upgrade the AC unit. Regardless, the thermostat being downstairs is difficult because the cooling setpoint will be reached downstairs much faster than the upstairs resulting in that being hotter all of the time. Your cheapest option is to get a AC window unit from craigslist for less than $100, lowes or home depot and then move on:)

If the floor is uneven, carpet is the way to go. Use inexpensive nylon (most durable and stain resistant) or olefin cut or loop style carpet. Avoid berber as that can cause runs in the carpet that can be sucked up by vacuum if not carefully cut and then that ruins the carpet. Its not rental friendly and is already more expensive to install and will be replaced at higher frequency (not cost efficient). Use at least 6 lb carpet pad as that will prolong durability of the carpet and reduce wear best as possible. Look for darker browns or other variations or speckles to hide stains better. Bulk types at home depot and lowes offer competitive rates for the material and sometimes the basic carpet install.

I've started to try out luxury vinyl plank. Its a higher up front investment, but I'm hoping I wont have to replace it as often and it will have better value and easier between turnovers. The best priced material I found that has good quality is $2/sq foot at lowes- shaw matrix resort teak or other colors (below link). Needs no underlayment but requires leveled floors. I paid about $2/ sq ft install for basic one level install so about $4/sq foot all in where carpet can be had installed for a bit less per sq foot for the basic types using the bulk in stock stuff at the big box places.

https://www.lowes.com/pd/Shaw-...

my suggestion is to research the laws in your state regarding auctions and foreclosures and see if outstanding condo association fees carry over to the next owner following a foreclosure. In some states, the lien from condo associations or outstanding balance is not wiped out and you inherit the old unpaid balance, attorney fees, and penalties. I strongly recommend you arrange to have both a title search and make contact with the property management for the association to see what the current account balance is and the condo fees, so you can account for that in your offer and overall cashflow estimates. I've seen balances in the 10-20k and you dont want to be caught not anticipating those costs when buying the unit. Further, the verify the exact condo fee to make sure you have your expenses down pat. Another thing, condos are much harder to finance in general because they qualify the borrower and the association itself. So if you think you can buy using personal loan and then refinance into a long term loan, find out if the finances of the association are in order, ask management if anyone had trouble obtaining a loan recently and if the association is warrantable. Also know that rates are slightly higher for condo units.

Is it ridiculous? yes. Do you have any recourse with the contractor or home warranty company? Not really, except to stay on top of the promised repair schedule. When my compressor went down due to end of life failure, they had to order a new one from the supplier which takes a solid week to be fulfilled and ship. The replacement compressors for older models are not one size fits all and seldom used, so they usually need to be ordered on demand from the supplier. I think you're lucky that your warranty company actually found a vendor who properly diagnosed the issue and was authorized to replace the compressor. That's usually a $1000-2000 repair. The bad news in my case is that a year after we replaced the compressor on my 20 year old heat pump unit, it finally started to leak elseware and the heating cooling capacity diminished and we determined it was time to replace. so hopefully your compressor buys you some more time, but know that other issues can still develop.

That timeframe is frustrating but relatively reasonable. It's your responsibility to provide alternate window AC units or portable AC units for tenant to use in the meantime until the repair is complete. My PM has portable AC units that I rent from them and they deliver to the property until the repair was completed. That's a landlord responsibility and you need to handle that ASAP. A gift card really isnt a reasonable substitute. Also, as an aside, most warranty companies are extremely slow to approve and make repairs using a 3rd party contractor (who gets paid a low rate to handle your claim and prioritizes their non-warranty repair calls). By choosing that route, you have to accept that repairs would not be done quickly and goes with the territory.

One last idea: look on craigslist for 1-2 portable AC units or window units, buy them used, provide them to your tenants, then sell them when no longer needed to get back most of your cash. or keep them in your storage for next time AC fails at another rental.

quicken home and business will get it done for you and keep you organized and has rental reporting features like cashflow reports and schedule-E end of year reports. You download your bank/ credit card transactions on a weekly basis into quicken and then tag transactions by property and expense/ income type from a pre-populated drop-down. You can tag/categorize once a month to keep organized so at year-end all you need to do is turn in an exported schedule E report to your CPA. quickbooks requires alot more training and is not intuitive to setup for rentals and doesnt have the functionality built out of the box like quicken. It's also the lowest cost bookkeeping software I've found that's an alternative to cloud-based Software.

 In addition to Jim's advice, I recommend scheduling a move-out pre-inspection walkthrough maybe a week before move-out for several reasons: 1) you can document all items needing repair and give the tenant opportunity to repair any damage instead of you deducting from their deposit and arranging the damage repairs yourself 2) anything that is normal wear and tear, you can begin to schedule painter, contractor, cleaners to come through and do a move-out punch list and cleaning the day after the move-out to expedite the turn and know exactly what needs to be done in advance of your new tenants. coordinating several trades means they all might not be able to come at the same time to allow paint to dry for example but it gives you a leg up on the process. You'll be responsible for normal wear and tear and can't expect your tenants to be on the hook for it. Putting your old tenant in charge of turnover sounds like a recipe for disaster. If I were that tenant I could put a hole through a wall, blame the new tenant and there would be no proof or recourse to deduct deposit. 

We don't ask hotel guests to clean their rooms and check-in new guests do we? That's the job you are proposing handing off to a tenant, which makes the same amount of sense...

I think your problem is that USAA doesn't offer any products that account for the unique risks associated with bed and breakfast/ short term rental businesses. I think this is their way of saying "we still want the rest of your business, but we dont want anything to do with insuring your Airbnb business." The problem is that if you go elseware for your umbrella, then you have to switch over all of your other policies (both for administrative reasons and so they can track to make sure you always have minimum coverage on your dwelling policies and everything is synced. Insurers dont like to have part of a portfolio when covering umbrella based on my experience.

Looks like you need to look outside of USAA to find solutions to insure your entire portfolio to include business and personal/ auto. I dont think USAA does alot of commercial anyway, but you'd have to check. Maybe an independent agent associated with Assured alliance which has a large presence of agencies in SC and they have access to many insurance products. I have no experience but I'll tell you its really nice to have a dedicated independent agent who knows your portfolio, can shop it around, and you can call/ email to update and add new policies vs. generic customer support and having to go through a phone tree. it was a no brainer for me after I maxed out number of rental units they allow with Geico.

http://www.assurealliance.com/our-members

Excerpt from article:

• Renting out all or part of your home or property more than once to guests (whether you’re living there full time or not) is often considered business use by insurers, which means you’ll need a business (or commercial) policy on top of your homeowners policy. Specifically, you’ll need either a hotel, vacation rental, or a bed and breakfast policy even if you only rent your place on a homestay site once or twice a year. Some insurance companies offer month-to-month homesharing liability policies (but make sure to check exclusions or limitations).

https://www.thezebra.com/insurance-news/3836/5-ins...