All Forum Posts by: Dennis O'Quinn

I have a property management company in Atlanta for my properties.  They were recently bought out by gkHouses in B'ham.  They use Rently and in all properties that have 'cycled' through, there have been problems.  In 2020, viewers have... left lights on; left AC on at very low temps (i.e., it was running constantly for who knows how long); left house unlocked multiple times;  left sliding glass doors to an unconditioned sun room with a poorly lockable storm door and the AC running full blast in the house;  had 2 guys in non-smoking unit of a triplex claim to be the new tenants and sit in the unit smoking pot all day... did not find out until after the fact when property management contacted me about the key being stolen from the lock box (I guess a following viewer couldn't get in) and the upstairs tenants told me about the pot incident when I checked that out;  had a house rented out from under me via craigslist even though there was a sheet explicitly stating 'you can't rent this property from craigslist' posted on the wall.  The guy *saw* the sheet and sent the scammer $1800 anyway.  We discovered before he had moved in completely and he moved right out (minus his $1800)....  But, I don't think this would have happened if a 'person' had been involved.  I do not like the Rently idea, have not had good experience.  Also, not sure how liable I can hold the property management company for damages that may occur.  They weren't so responsive when I complained about the pot incident.  I am seriously considering shopping for a new company as a result.

Thanks again Hubert.  I do appreciate your feedback.  The PM does of course have a collections department, and has said we could either sue ourselves or they could turn it over to their collections dept and they could 'try' to collect for the next 7 years....  

Also, the PM has pretty much give the same message as you are stating here (i.e., likely not worth it).  However, I am not even sure what 'numbers' he gave to them yet nor how he presented it.  As in "here's the cost we ran into so you won't be getting your deposit back", or "here's the cost, how are you going to pay the overage?"...  Still trying to chase that down.  He's been uncharacteristically unresponsive lately.  Perhaps it's all the summer turnover cranking up.

I've definitely got my 'principal' up about it though...  I am really annoyed at all the legwork I have done trying to find the lowest price I could find for everything and then having the PM come back with (basically) 'are you serious?' as though the prices are unreasonable and gouging.  I would much rather not have kept *any* of their deposit, come in and spruced up the place and then put it back on the market.  The tenants just bought a house of their own which is why they vacated a few months early, so I hate to ding them at a time when they are likely a little cash poor, but, it has now been a month and all I have done is run down leads, gotten a few things started, and I'm still digging on prices and reasonable rates....

I am still going to come up just over $1000 short on the recovery....  and no time (or money) for summer vacation for my own kids now.  The $1000 is definitely in the Small Claims arena and I have done that before, so, I know it's very easy.   I collected too, but, it was not easy and they played it out to the very end.  I finally started the garnishing process and they suddenly paid up the remaining balance before it began and I was stuck with the garnishing fee which I did not pursue.

Once I find out what has been communicated to my ex-tenant and how, then I will know better how to 'present' a bill...  As in "here's the itemized list and the remaining balance after deposit, so, how will be you paying and when", or, "here's the list and remaining balance, payment is due immediately, let's please avoid small claims court and get it payed off" (or something to that effect).

Thanks again Hubert.  Your advice has helped clarify a few things in my mind on how I should approach.

Thank you Hubert, you're keeping late hours over there in Cali....  and, yes, you understand correctly.  They are pretty much saying, here's the deposit ($1300) and here's the $2300 and good luck on the rest.

As my property manager puts it, to get the rest, I will have to sue, but, no way will a judge approve more and quote 'he (the property manager) is just giving me sound advice'...  i.e., Basically I got my money out of them over the years (about $200 short of my mortgage per month) and I should just take what I've got and move on...

But, I am a little annoyed with the advice of letting someone just take advantage of me that way.  Especially when they had the money to send their kids to a private Catholic school that I can't even *begin* to consider.  Kinda rubs salt in the wound.

Hi, I have a large (5 bed/3.5 bath) house located in Tucker/Atlanta, GA and a property management company.  It was rented 9/2015 with a $1300 deposit paid.  Lease clearly states Lawn Maintenance to be performed by tenant (Quote): Lawn mowed and edged (trash and clippings picked up), beds free of weeds, shrubs trimmed.

Tenant has moved out early on the current renewed lease on May 31, 2019 and paid the required early termination fee of $2300.

The house was left in a very dirty condition with some damages (broken oven door on nice ($2k) double oven, separated door frame (from slamming?), broken window, punched in cabinet door, etc.) all adding up to $1400 for repairs, cleaning, carpet cleaning, etc.

The lawn was left in even worse condition with one area so overgrown that 3 estimates I have to clean only that area out were $1100, $1200, and $1800 respectively.

My problem is that my management company is telling me that I would have to sue to get the extra money back and that I would *never* get a judge to approve so much even for landscaping (He is saying that I should only hope for a couple of hundred).  Consequently, the management company is applying the $2300 early termination fee towards my claims against the deposit and then saying that if I want the net difference ($600+) but, that I will never get it.

So, 2 questions...

(1) aren't the term fee and the deposit different things and thus the term fee should not be considered as 'part of the deposit' for purposes of recovering damages?  and...

(2), can anyone speak to the feedback from the mgmt company that I should (basically) just write off the landscaping and eat the cost to get it back into something near to the original condition?  For a couple of hundred, I would be a lot more open to that philosophy, but, at over $2k for the entire yard (it's a 1 acre property), that's a little much to swallow...

Thanks in advance for any feedback...  Dennis

Thank you sirs, that confirms my understanding... and Brian, given the need to transfer from the LLC back to the IRA, I definitely wouldn't do frequently... Would have been nice to just 'redirect' some of the rent back to a personal account, but, I was pretty sure it wouldn't be that simple... in the mean time, we have plenty of other money in our main IRA to draw on...

Thanks much to both of you (George and Brian).  Color me impressed with the speed and clarity of those responses...

@George Blower: Hi, I think you are saying what I was wondering and I want to be clear that I understand. I recently turned 59.5 and I have owned a couple of SDIRA rental properties for a short time. It is set up as a checkbook style SDIRA with a 'business' owning the properties with myself and my wife as the managers (all through IRA Financial Group).

So, for my question, are you saying that we can begin using the 'rent' collected as personal income now (taxed as income of course). And if so, would we simply write ourselves a check from the company, or would we have to work it some other way? Perhaps transfer the funds back to the 'IRA' account at IRA Financial Group and then request a distribution from there? (which would likely be a pain I think if done on a monthly basis)....

Thanks in advance, D

Thank you Brian, I think I'm good. I think I was just running into front line agents that did not understand when I tried to tell them that the property was owned by the LLC and that I could not be a part of the policy in any way (other than as the signatory for the LLC). They kept wanting to approach it as 'we need someone to associate with the policy for the purposes of determining risk and cost'. Turns out they were not familiar with writing business policies vs. residential policies.

I am using IRA Financial Group and they have been very helpful in getting this ball rolling and after double checking with the tax attorney, they agreed with my interpretation of the code regarding this situation.

And yes, I have been researching this in depth and am aware of the usage restrictions.  What I found very interesting though was that the restrictions did not apply to my siblings, which, allows me to use my sister (who is a real estate agent in another state - Houston, TX) to buy and help manage properties for me in her area.  I had to read that one several times...  :)

Hi Jason, thank you very much for your reply... Actually, I have finally found an insurance agent that can do it (State Farm and an independent agent). The problem I was running into was that other companies I contacted wanted to use me personally in order to establish the 'insurance score' which would then be used to determine the cost of the policy (i.e., the 'risk'). However, that would have broken the 'arms length' relationship that must be maintained for the SD-IRA LLC (checkbook style). If it were done this way, then my personal 'contribution' in setting the price of the insurance would have been a prohibited transaction (according to my interpretation of the IRS code and as interpreted by my IRA trust company (IRA Financial Group)).

On the second part of your response, are you sure that I can rent a property owned by my SD-IRA back to myself? I was pretty sure that something like that was definitely (and explicitly) prohibited by the tax code.

I realize this is a very old topic, but, one question I have that is not answered is how to initially set up the home owner's insurance for a SD-IRA rental property.

All insurance I have contacted say they have to use 'me' in order to determine the 'insurance score' for the new policy, which, to me, sounds like a transaction that would involve personal value being contributed to the operation of the SD-IRA home, and thus prohibited.

Can anyone comment on this?

Thanks in advance.