All Forum Posts by: Denise Evans

@Amanda S., it is a matter of routine inspections to discover if they are complying. If you do not have property management software that includes a module for inspections, i recommend SnapInspect.com   They have a cloud based and phone app system that is incredible, very reasonably priced, and easy to use. They also have a free trial period.  

For animal urine smells, I recommend one of the enzyme based sprays, such as Rug Doctor Platinum Urine Eliminator. The enzyme products work chemically to change the urine into something that is harmless and does not smell bad.  It is not "snake oil."

Good luck!

Greg, You probably have different laws in Canada. This is a United States legal issue.  If someone in the United States did what you do, they would be subject to a Fair Housing complaint, unless they fit within the size limitation exemption.

You should not enter the rent increase conversation with any hesitation, doubts, or unease. The price of things goes up every year. Just be very matter of fact, as if you were Charmin, increasing the price of toilet paper.  Especially if the rent increase is not major, and it occurs in hot months in the South or cold months in the North, nobody is going to move rather than pay a small rent increase.  If rents have increased dramatically, then it is a landlord's market. Increase the rent to market, or find another tenant. Shouldn't be a problem.

Hi @Josh Anders. I know the Hartselle area, and I know Sara. She is a very solid and respectable and conservative investor. Connect with her. I think Hartselle will become more of a bedroom community for people who work in SE Huntsville, so there are some good growth opportunities.  You might want to look at entire mobile home communities to purchase. Maybe between Hartselle and Lacy's Springs.  People get fed up with the management headaches and just want the mailbox money. As a result, they are willing to sell and hold the financing.  Reach out to all of those owners. Today's mobile home community might be tomorrow's Target or Lowes.  Plus, cash-on-cash, mobile home communities provide the best returns. Also the most management headaches.  Reach out to me via private message if you want to talk more. Good luck!

I went to undergraduate school in Dallas. When I practiced law in Houston, I lived out in Cypress.

It all depends on which city/town.  In Tuscaloosa, for example, there is normal zoning and then there is the university overlay. I'm sure Auburn is the same. Popular right now are the 5/5 units--one building with five bedrooms, each with their own bathroom, and shared common areas.   One "suite" of five upstairs, one "suite" of five downstairs. In Tuscaloosa, at least, they are renting for upwards of $750 per bedroom. That model would be much better than your 2/2 units. Contact me privately via a message if you want to discuss further, and I'll send you my phone number. I live in Alabama, but I'm a Texas attorney.  I might be able to give you some insights if you can confidentially give me more information.

"Choice of law" rules are very complicated. In most law schools, this is an entire two- or three-semester hour course. If a decision affects the entity itself, then the court must follow the law of the state where the entity is organized. That is why so many corporations incorporate in Delaware, because it is a corporation friendly state. If the decision is about a contract to be performed in Alabama (such as a lease) or land located in Alabama, or a tortious or negligent act that occurred in Alabama, then Alabama law will be used.

If your entity is organized is some other state, you must register as a foreign corporation in Alabama. Otherwise, you will not be allowed to use the Alabama courts to protect your rights or obtain remedies such as eviction.  That is because your entity will be a "stranger" to Alabama. Registering to do business in Alabama is a simple form and a filing fee. You go to the website of the Alabama Secretary of State, at http://www.sos.alabama.gov/

If I lived in Utah and were obtaining Utah investors, I would form my entity in Utah.  That way, your lawyer and you and your investors will be familiar with the law regarding the entity itself, instead of having to learn about Alabama entity law AND Alabama real estate law.

If you have local lender financing, they are usually willing to allow a transfer to an LLC. There might be a small fee. Large lenders with securitized loan portfolios cannot do that, because the servicing company has no authority under the master servicing agreement.

There is a low likelihood of lender accelerating the loan, as long as it is current. The Due on Sale clause had its genesis in a time when S&Ls held long term financing in their own portfolios. When interest rates rose dramatically, passbook savings rates also rose. S&Ls were paying high interest rates on accounts, but earning low interest rates on mortgages. Many sellers were willing to sell on a wraparound mortgage, at cheaper interest rates than the lenders were able to offer. As a result, lenders could no longer count on property changing hands after 5-7 years, and being financed at the new, higher, interest rates. They started putting due on sale clauses in their mortgage instruments. The FSLIC (sister to FDIC, now defunct) jumped into the act, and got legislation passed saying due on sale clauses were enforceable.

The whole mortgage model is different now. Plus, unless we are in a time of rapidly rising interest rates and an explosion of wraparound mortgage sales, there is simply no reason for a lender to worry about this issue. Yet, the clause is still there.

An LLC is the best for most people, from an asset protection and estate planning standpoint, and the ability to sell shares to a self-directed IRA. The assets in a self-directed IRA must be passive. The average real estate investment is not passive. BUT, shares in an LLC that owns real estate are passive. As far as protection from mold issues and personal liability, any plaintiffs' lawyer worth his or her salt can draft a cause of action against you personally, no matter what entity holds title to the real estate. Be a prudent landlord, take care of problems as they arise, and have good insurance.

You might want to look at Greg Deitsch at Sirote, Permutt for your legal work. Greg heads the Evictions/Ejectments department, but also does other landlord work. I like Sirote because they have the economies of scale to do routine things efficiently and economically, but also the depth and clout for big problems.  Some lawyers will threaten you with a lawsuit, but then slink away when Sirote says they represent you. The same with other large firms.  On the flip side, a small firm might give you more personalized service, and be more willing to educate you on things you can do yourself, or do to cut down on legal fees. Be sure to ask any lawyer about this issue of education. 

Also, do not be bashful about asking lawyers for proof of E&O insurance. The ones with it will not be offended, any more than my plumber is offended when I ask him for proof of insurance. The ones without E&O coverage will either tell you why they think it is unimportant and allows them to keep their rates down, or they will become indignant and kick you out of their offices. You decide on this issue, but make an informed decision instead of being surprised later.

Hi @Latreeka Williams. Sorry for the delay. There has been some illness in my family, and I was away from my computer. Under Alabama Code Section 40-10-74 (reprinted at end) you are entitled to possession as soon as you receive the tax certificate. You do not have to wait until you have a tax deed. There is much mis-information on this topic. Thank you @Roy Oliphant for recommending me.

If the property is obviously abandoned, you can change the locks and immediately start making your repairs. If the property contains a residential structure, and the owner redeems, they will have to pay  you for the value of your repairs, in addition to the taxes and interest. They will also have to pay you for your casualty insurance premiums, plus interest. You can buy up to $25,000 worth of casualty insurance from Jack Eyer, at Eyer Insurance in Birmingham, Alabama. BP will not let me provide his phone number, but you can do an Internet search and find him.

Somebody told me that State Farm will write regular insurance, with no limits, on a tax certificate.  I do not know if that is true or not.

You can rent the property out. If the owner redeems, you will be able to keep all the rents earned before redemption.

If the someone is living in the property, or it is just temporarily vacant between tenants or something, you cannot just barge in and take over. You will have to give the owner written notice to vacate.  You will then have to wait 6 months before you will be able to file a ejectment lawsuit to get them out.

If you file your ejectment lawsuit, and THEN the owner redeems, they will also have to pay your legal fees for the lawsuit.

Please search Bigger Pockets for blog posts and forum articles I've written about Alabama tax sales. It is a complicated field to try to figure out on your own.

Here is the statute:

Any purchaser of lands at a tax sale other than the state or anyone claiming under him shall be entitled to possession of said lands immediately upon receipt of certificate of sale from the tax collector; and, if possession is not surrendered within six months after demand therefor is made by said purchaser or his assignee, the said purchaser or his assignee may maintain an action in ejectment or a statutory real action in the nature of ejectment, or other proper remedy for the recovery of the possession of the lands purchased at such sales and shall be entitled to hold the possession thereof on recovery, subject, however, to all rights of redemption provided for in this title. If the mortgage or other instrument creating a lien under which a party seeks to redeem is duly recorded at the time of said tax sale, the said party shall, in addition to the time in this title specified, have the right to redeem said real estate sold, or any portion thereof covered by his mortgage or lien, at any time within one year from the date of written notice from the purchaser of his purchase of said lands at tax sale, served upon such party, and notice served upon either the original mortgagees or lienholders or their transferee of record, or their heirs, personal representatives or assigns shall be sufficient notice. Such notice shall be given by certified or registered mail, return receipt demanded, addressed to the last known address of the mortgagee or lienholder. Nothing in this title shall affect the rights of minors or insane persons to redeem as provided for in this title, or operate to convey or affect the rights, title or interest of any reversioner or remainderman.