All Forum Posts by: Account Closed

Every state is different in terms of real estate law and whether or not your need a license for wholesaling, etc.  (And, if you need a license from that state.) You'd have to check with the state you're interested in to see what the lay of the land looks like.

You'll find a lot of investors to network with once you're here.  You can also check out some great podcast from the area.  I can connect you with those if you connect with me via BP messaging.

Threats from tenants is cause for eviction with a 7-day notice in Michigan.  Check it out here.  See paragraph 1(e).

You might want to connect with the folks from the RPOA of Mid-Michigan.  Someone with that group might be able to refer a good PM company.

First...the security deposit in Michigan does not need to be kept in a separate account.  And, you do not need to keep track of the interest--any interest earned on the security deposit is yours.  However, if you use the account in which you keep security deposits for anything other than security deposits (i.e. you're co-mingling funds), you must have the security deposits bonded/insured. (Security deposits are not handled the same way as earnest deposits for real estate purchases.)

Second, whether or not you have separate accounts for each unit, etc. is a personal thing and something I'd recommend getting help from an account with initially so you get your books set up correctly--whether you're using an online property management software or QuickBooks.  Many of these programs have electronic rent payments as an option for your convenience and your tenants.

Third, while becoming popular, renting out "rooms" is not allowed in some places, e.g. Grand Rapids.  Renting out separate rooms to individuals on separate leases is defined as a "boarding house" in GR and the owner must live there and get zoning approval.  Having separate leases with each tenant might be allowed, but creating separate leases for each tenant complicates things.  What happens when one tenant needs to be evicted?  How does the court officer know which personal property belongs to whom?  What happens when three of four tenants move--where would you get the rent from?  How can you evict one person if they are only officially responsible for 1/3 or 1/4 of rent? The best way to do a lease is to use one where all tenants are "jointly and severally" responsible for all things in the lease--including the entire rent.

And, be wary of anyone offering to pay all their rent in advance. 

Hi Lawrence:

This type of thing happens a lot.  We suggest notifying your tenants as soon as you find out that they are violating their lease by allowing others to move in and stay beyond your guest policy without approval.  If you accept rent after having knowledge and not having sent a notice, you might be deemed by a court to have accepted the situation.  This could jeopardize an eviction for violation of the lease.

The first "notice" doesn't have to be a formal "notice to quit" to initiate an eviction--a simple letter using a friendly tone might be in order, something like "...you may have forgotten that your lease limits the time guest can stay in your unit.  Please refer to your lease clause ___ which stipulates that any additional persons living in the unit must be approved..."  "...please contact us so we can make arrangements..., etc."  Some landlords will tell you to send a legal notice to quit along with the letter to start the process--just in case.  Not a bad idea if you don't think they'll take you seriously.  The attached letter could say something like "...we've included a copy of a notice to quit which will be initiated if the guest has not moved or started our application process..."  On the other hand, if this has been going on for a while and you've already given them notice, you might be forced to start the formal eviction process without the niceties.

If you have to pursue eviction, it can be tough to prove...unless of course they admit it.

If you don't care for your current tenants and believe they will be a problem and the lease is nearing the end, you could just ask for possession of your property at the end of the lease.  (Just be sure not to mention any other reason other than to obtain possession.)

On a side note, fair housing folks hate it when landlords unnecessarily deny additional tenants unless there is a particular issue with local zoning or property maintenance codes. Giving the existing tenants a chance to resolve their problem and come into compliance is something fair housing advocates like to see.

Note:  I'm not an attorney nor giving legal advice--just passing on information.  And, this is for Michigan only.

Good luck!

Our local economist from Grand Valley State University predicts a national slow down by 2019 but does not see that affecting the West Michigan real estate market (especially the Grand Rapids area) for many years to come due to pent up demand and the significant deficit of existing housing on all fronts and continued job growth.  To quote what he told our audience at our annual conference (probably not verbatim), "real estate investors will be the ones inviting their neighbors to their house for the parties..."

I agree with @Zach Sikes...sounds like a referral.  Your broker will be in the line of fire regardless of the situation.  You or your buddy screw up (or someone thinks you have), your broker will get sued--almost guaranteed. Also, I believe, if you're a salesperson for a particular broker and not a broker yourself, you can't do anything without your broker.  However, it is always best to call MAR for legal advice.

You have to honor the lease if it is not a month to month.  If it is, you can give a 30 day notice to obtain possession of the property.  (FYI:  That starts the process.  After 32 days you can file a complaint and then wait 10 days for the hearing and, if you win, the judge will give them 10 more days to move.  Once that time period is up, you'll get a writ which will add another 24 hours to a week or longer depending on how busy the court is.)  If it isn't a month to month, you'll need to evict for cause, i.e. a violation of the lease.   Good luck!

In Michigan, the security deposit is the tenant's property until they move out and a notice of damages is provided to the tenant showing the disposition of the security deposit.  The purchase agreement should have an assignment clause in it to assign the deposit to the new owner at close.  (If not, you've just given the seller a bonus, and you'll be stuck with returning the deposit to your tenant(s) out of your own pocket.)