All Forum Posts by: Greg Scott

Kevin:

I still disagree with you.  I've sat in my car for conference calls, using wifi from a local business.

You are not required to reimburse residents for their poor decisions.  

Let's take it to the extreme. Your resident might say they had to fly all over the country to attend meetings in person since their internet was out.  Would you reimburse for that?  No. 

She could have chosen a much cheaper solution, like go to a coffee shop. Or, she could have asked you about it in advance to reimburse hot spot costs.  Realistically, you probably should reimburse her for the value of the internet you owned.  If internet is $60 per month, in a 30 day month, you should reimburse here $2 per day or $8.

If you choose to offer her more as a customer satisfaction olive branch, that is up to you.

The housing market in Indy is pretty tight.  All of our apartments are at 95% occupancy. If you are having trouble finding a resident, there is another issue. Typically it is asking too much for rent, but it could be your advertising is poor or your property is not in good condition for that area.

"Accept whoever applies" is an idea that would cost you a bucket of money in the long run.

Bankruptcy is usually a "no" unless it appears to be a one-time event caused by something out of their control such as a massive medical bill or a business failure.  Bankruptcy due to poor money management is indicative of a behavioral issue that does not change over time. Do you want to be their landlord if they enter bankruptcy again?

Late payments do not bother me at all as long as they paid all their bills.

This seems wrong.  The application is not a binding legal document. 

We have people that apply that we reject because they do not meet the criteria.  We have people that apply that are accepted, but they cancel for some reason.  Either case shows the application is not binding.

The lease, however is a binding legal agreement. That should be all you need unless there is something strange with Florida law. 

I'd check with another collections agency.

PS. Many management companies archive or destroy old applications because they do not want to be responsible for SSNs getting out to identity thieves. 

I am invested passively in about 50 syndications.

My wife and I have also syndicated four property purchases:   24-unit, a 272-unit, a 281-unit, and a 277-unit.  The 24-unit we sold in 2020 and the last three we still own and manage. We are the sole GP on all these deals so are not just money-raisers relying on an operating partner.

Finding and operating a property is pretty much the same whether you are a syndicator or buy it yourself.  I found the education to be very valuable from that perspective.

If you are investing with an SDIRA, then it likely needs to be a passive investment in some sort of syndication.  I don't see how you can buy a small apartment and not have some direct involvement in it.  That would make it a prohibited transaction.

I know a long-time syndicator currently offering 10%.  I don't know if he is getting any traction.  I suspect he needs the cash to shore-up a problem property.  His note seemed to indicate it was an unsecured line of credit so I wouldn't touch that with a 10-foot pole.

The short answer is: everything is negotiable.  It will depend on the amount of security you are offering, the attractiveness of the interest rate, and your ability to raise cash, among other things.

Your first deal always seem scary, so people gravitate towards a partnership. It feels less scary to have someone on the journey with you.

However, a partnership can create more problems than it solves.  It is even worse given your situation.  How will it work if your partner wants to sell and you do not want to move?  Who pays the bill if the AC goes out on your unit?  Would it be the same answer if your partner felt the AC broke because you did not change the filter?

I could give example after example of potential areas of irritation between you and your partner.  If you can do the deal yourself safely, with reserves to cover unexpected issues, it is a lot cleaner.

Do you need to partner on the deal?  For me the best-case scenario would be to pay him some cash to assign the deal, and then you take it over 100%.

If you have no cash, then it becomes a question of who has the greatest position of strength. He has cash, but you have a VA loan and are willing to do that sort of deal. Hard to tell where the chips might fall. Everything is negotiable.