All Forum Posts by: David S.

I do not think you are liable if you made a good faith effort to have the fridge repaired or replaced in a timely  manner. However, you can offer some kind of food reimbursement as a good faith gesture.

I am sorry to say your passive investment is about to get more active.

Check your lease with the tenant. Our standard leases do not allow for remodeling, renovating, painting, etc…

I have not had experience with Section 8 but have heard that the City can with hold their portion of the rent subsidiary if certain conditions in the unit’s state of repair are not met.

I would read up on Section 8 in that property’s city location and how friendly local courts are to tenants. Maybe talk to an attorney.

Why did you change PMs in the first place? Unfortunately, one of the biggest risks for out of state investors is finding a PM that can be trusted not to take advantage of an out of state investor. 

Many BP members are of out of state investors. Consider starting a new thread asking for recommendations for PMs in your property’s location.

@Ashley Benning - 

It sounds like, with the help of all the input you have received so far, you are going to

"stay the course with the retirement account, possibly move some of the money to some funds that might be a little higher risk, but not reduce my contributions…..I'll also work on changing up my budget so that I can put as much as possible of my second job income into my REI fund."

I agree with that.  With returns of 12-14% a year, I think you are doing well, But I would caution on trying to get more aggressive with your 401K allocations given that the stock market is due for a correction, and possibly a large one, after an 8 year run. That is, unless you think you would have the emotional fortitude to hang in there through a 25% drop or more in the value of the 401K.

Instead of moving into funds with higher risk in hope of achieving a higher return, maybe see if there are funds in your 401K plan that do not charge as much for management fees, such as index funds.

On the REI side, it seems you have made several offers but have not been successful. Here too, I would caution against loosening your requirements in order to "get the deal". Not sure which markets you are targeting but I think that with the increasing competition for flips and BRRRs, profitable opportunities will be more difficult to find. That said, there still are many examples of recent successes on BP and I am sure you can learn from them.

@Dylan Vargas - Thanks for the offer but I don't think you need to make any special trips to the property at this point. Which are the better neighborhoods would you say to invest in? Based on your comments above, is Ralland Circle in a better neighborhood than Arcadian?

I am also eye balling the potential of Chico as I seek to diversify buy and hold multi-res from the SF Bay area. Reasons for my consideration include the large college student base giving some stability to the local economy. That said, I would be seeking to have my rentals occupied all year round rather than just the school season. Other not so scientific reasons include Chico having good recreational amenities and its got a Costco, Trader Joes and Sierra Nevada Brewery. And its very driveable to Sacramento or San Francisco.

@Mick Harvey and @Adan Mendoza -  May I ask your motivations for moving to the Chico market vs. say Sacramento or Redding?

@Dylan Vargas  – May I ask your your opinion of a couple of four- plexes currently listed on Arcadian Avenue. Pictures on Trulia show well but it looks like they have been on the market awhile. I am sure the days on market in Chico would be longer than say SF Bay Area.

@Manolo D. So, there are four forms,

1. Conditional Waiver and Release Upon Progress Payment, 
2. Unconditional Waiver and Release Upon Progress Payment, 
3. Conditional Waiver and Release Upon Final Payment, 
4. Unconditional Waiver and Release Upon Final Payment

Am I to get an Unconditional Waiver and Release Upon Final Payment from the Engineer?What if he hasn't been paid the $4,000 yet and only gives a Unconditional Waiver and Release Upon Progress Payment for the $7,000?

@Manolo D. Got it. Thanks again!

@Manolo D. Thanks for your response. I will have a look at the website.

Just so I understand, I do not have to worry about the $4,000? All I need to get is the unconditional contract lien waiver from the Engineer and a Conditional Lien Waiver from the Contractor, both for $7,000?

Hi BP Community!

I want to see if Developers, Rehabbers, BRRR'ers, Contractors and anyone else in this community could offer any advice about this situation.

I hired a design-build Contractor to retrofit the garage of an apartment building to comply with new soft story laws. Due to growth in the Contractor’s business and because one of his in- house engineers went on vacation, the Contractor entered into a contract with a reputable engineering firm to do the engineering and design work on many buildings, including mine. Let’s say my contract provided for a $7,000 fee for the design and engineering phase which would include getting the city’s approval of the plans. The plans were approved and the Contractor sent me an invoice for the $7,000. At the same time, the Contractor said that he was under water because the engineering firm also charged him an additional $4,000 fee, on top of the $7,000, for expediting the approval of the plans.

The Contractor told me that I would only have to pay him $7,000 per our contract and that the extra $4,000 is between him and the engineering firm and that he would be negotiating this with them since their contract with the engineer provides for them to do many more of the Contractor’s buildings.

Since this is a fairly big project for me, I have been reading about Contractors and Mechanics Liens in California and learned that if the Contractor does not pay his subcontractors, and I consider the engineering firm in this case a sub-contractor, any sub-contractor could file a lien on my property.

The good news is that I had the Contractor get a lien release from the engineering firm for the $7,000. However, and while I want to believe that the Contractor will be able to resolve the $4,000 issue with the engineer, I am wondering if there is anything else I should be doing to protect against a potential lien. For example, I am thinking that when I pay the Contractor for the $7,000, I should have the Contractor indemnify me for any claims the engineer may bring if he isn’t paid. Or should I require that the Contractor pay the extra $4,000 before I make the $7,000 payment and get a another lien release, eventhough this may impair the Contractor’s ability to negotiate with the engineer?

Thanks for reading. I look forward to any advice you may have.