All Forum Posts by: Corey Key

@Karthik Kumaresan I have just recently went through the same issue, the PM agreed in their management contract that they would do quarterly inspections, I received rent late, and come to find out they were not doing the inspections. I do not know the price of my rehab right now because I'm currently in the eviction process with the tenants. I'm definitely disappointed in the PMC that I chose because they only took 10% from me the previous two years and did not do anything that they mentioned in their contract with me. However, after discussing this with my attorney, he suggested it's not worth it trying to sue the company because in their contract they have " indemnification clause" which exempts them from all liability, damages, caused by the tenant. 

So, after educating myself, speaking with my attorney and research, in my opinion some not all PMC's only collect rent for you and take their 10%. So even if they do not honor their contract with you, they have that clause in their agreement that doesn't hold them liable, and also the claim may be so small it's not worth you or your attorney time. I wish you the best of luck!

 Thanks again Michael for the response, you are correct I misspoke the tenants were receiving Social Security, not S8. I was aware of the national eviction moratorium however I was not aware of the PMC not being able to do inspections or nonessential repairs. However, the management contract did state they would do quarterly inspections. And after discussing this situation with an attorney he suggested the same, not worth the time or money to hold accountable the PMC because they made sure that "indemnity" was throughout their contract which I was not aware of. 

Everything you have mentioned is correct, I should have definitely screened my PMC more instead of looking at reviews and giving a call asking a couple questions.  This is a lesson learned and the great thing about these hard lessons is that I will educate myself more now before giving my property to a company that doesn't have my best interest at hand.  

Thank you @Kaycee Miller and @Jessica Stevenson for the quick responses. Definitely take in what you considered.  I just recently purchased Brandon and Heather Turner Managing Rental Properties and I know this gives me some insight on property management, even if I do not manage my properties, I'll at least have some education on what needs to be done. 

I have a property that was being managed by the PMC for approx. 2 1/2 years.  During this time, I have been under military service traveling across the country, which is why I utilized this specific service. Everything started well until after the COVID pandemic the PMC said the tenants were under Section 8 and could not pay until the middle of the month, my ignorance at the time, I was not aware I could ask for an eviction, so I continued with late payments due to the tenants being already in the property. Fast forward after numerous discussions regarding late fees, miscommunications, etc. with thus PMC, I decided to cut ties and go with another PMC. The tenant recently asks the new PMC to repair the A/C unit in the property, when the new PMC maintenance guy came in, he took pictures of the property because he could not believe what he was seeing. There are holes all in the drywall, underwear hanging from the ceilings, rat droppings, and an amount of other stuff. The maintenance guy is wondering if people are staying there, how are they living like this. 

This was not the way I gave the property to the previous PMC; it was a brand-new house. According to the lease agreement of the previous PMC they mentioned they would do quarterly inspections on the property along with random inspections. I do not believe that this was happening due to the extent of damage to the property. The new PMC in their lease agreement states that they would do an initial move-in inspection, however due to them receiving previous tenants from a lease agreement, when they took responsibility of the property, I do not think that happened either.

My question is can I file a civil lawsuit against the previous PMC. I understand that ignorance is not an excuse but the reason why I was paying 10% to a PMC was to oversee this property and that was not happening. I'm definitely discouraged and disappointed that I put my trust in a company and received these results. Any feedback would be appreciated. 

@Account Closed I've put that into careful consideration, the tenants I have has been with me for over three years and I've never raised the rent to market value due to their situations and they keep my homes in great condition. So I'm always considering if I replace the tenants will I have more overhead due to replacing or renovating the entire house because they're not taking care of it. However if the tenants that are in the homes paid the market value rent, I wouldn't have an issue at all clearing the monthly payments. If I keep it the same, It looks like I will be breaking even or very minimal cashflow. So that's another question I have to consider risk bringing in new tenants that may or may not destroy the home, or keep the ones who are taking very good care of my homes? Something to consider. 

@Bjorn Ahlblad thanks for the input, I'm definitely going to research the refi vs HELOC, its a big risk seeing that it would be my first time acquiring 12-20 doors but I'm going to move forward with it.

@Jonathan Ling I have considered vacancies just not extreme, the equity I always said I would use a a scapegoat just incase something happens, but it sitting there not doing anything. I'm thinking that if done correctly I can also add to the portfolio without any major hiccups, like you mentioned earlier about vacancies. The three properties are in Southern California, Victorville, Hesperia area about three hours from Vegas. 

Good day BP

I'm between a rock and a hard place on making a decision. Currently I have six properties three in California and three in Louisiana. One of the homes is being used as a primary residence the rest are rented out by tenants. After reviewing the market data I see that I have roughly 794K in Equity in the six homes give or take if I sell. I would like to scale up and purchase a couple multi-families and/or a apartment complex by taking out a cash out refi approx. 300-400k on three of the homes in California since they are sitting with the most equity and use that as a down payment for a multi-family since the interest rates are so low. I was speaking to my mentor about it and he suggested selling the homes then buying a multi-family, I'm trying to understand his point about selling. Why sell when I can continue getting income from these rentals especially since they are tenant occupied. Why sell the cow when I'm still receiving milk especially on the homes in California. I definitely do not want to keep the equity sitting there not performing,  So I guess the questions I have are

1. Should I sell the homes vs. Doing a cash out refi to put down on a multi-family.

2. Can I do a cash out refi on multiple homes at one time?

Still a beginner to investing in Real estate so looking for advice on moving forward. 

Thanks

I've been doing a lot of research on Subject to on this forum and others. I'm reading the pros and cons of doing a Sub to, but I feel this along with seller financing is the only ways to add to your portfolio without a big deal of money. I've just purchased my 4th rental property the conventional way and  starting to run out of the 20 to 30% down payment I need to purchase more rental homes. Can some one who has done Sub to or knows about it give me some feedback on if this is a effective product for your toolbox or a hazard waiting to happen. 

Its a SFR Jason