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All Forum Posts by: Frank Maratta

Frank Maratta has started 7 posts and replied 105 times.

Post: Evicting for discharge of firearm in the house

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Jason C.

Did you talk to your lawyer? I ask this because I had a tenant that snuck an “emotional support animal” on to my property - a pit bull. This pit bull went and bit my downstairs tenant. The downstairs tenant was scared for her life after that and wanted to move - and she was a great tenant. Long story short my lawyer said I would have a VERY difficult time evicting the tenant with the pitbull, and that I had to send notice to her with a grace period to allow for her to correct the default, and after that I could evict if she did not correct the terms of the lease she was breaking. Since it was a one time dog bite, this didn’t help.

Not sure what state your in but here in CT, judges are very tenant friendly. If I sent her proper notice of violating the terms of the lease and she did it again, the judge might still rule in favor of the tenant. I had one judge actually renegotiate my rent in court saying he thought I was charging too much. It’s rediculous. So my point is, if your in a tenant friendly state, you may go thru all the hassle of evicting and get no where other then having an angry tenant who ends up remaining in place anyway and then just destroys your apartment before he/she finally does leave to try to get back at you.

So, send him written notice of violating section x x of the lease - violence on the property, AND make sure you also note something in there for violating the section of your lease that requires he maintain proper noise levels.

This way if it happens again, you have a leg to stand on in court.

Act like your doing him a favor and telling him you will withdraw the eviction, but if it happens again, or the noise continues, they are out. They might be greatful. In return, you could ask of them that they go next door and personally apologize to the next door tenant and have them try to offer an explaination of the accident. Hopefully the good tenant will remain in place.

Post: An Offer Without Inspection Contingency.. This can't be normal!

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Mindy Jensen

This was all very well put, I completely agree. Especially with that last paragraph

I believe new investors should always have the inspection contingency in place. After you have done a couple rehabs, or if you have a solid background in construction you can start to waive the contingency if need be. If you have this sort of background really all you are paying an inspector for is TIME - you can find the exact same items that would come up during an inspection if you put 2-4 hours walking thru the property. Upon first glance, a lot of things get missed, so if I’m putting in multiple offers or if it’s just not feasible to spend an hour or two walking thru the property then I will add the inspection contingency.

Sellers know that when someone puts an offer in with an inspection contingency, they can expect to possibly need to reduce the price after the inspection occurs. Or some of them just want the deal to close and don’t have time for a month and a half to go by. Some may be hiding some things that they know would come up in an inspection that a newer investor or home buyer may miss.

When I do rehabs, I usually waive the inspection contingency. I look at the big ticket items - roof, siding, windows, boilers, electric (knob and tube?), foundation, and if I’m not gutting it all the way to the studs- I look at the walls- are we dealing with sheetrock or plaster?

Keep in mind I have used the inspection contingency to get some great deals, my first two family I ever bought i went up against 15 other bids so offered 10k above asking but left the inspection contingency in place, I was then able to negotiate it down to asking price. I also had another 3 family I bought that was listed for 215k, had it under contract for 193k and then after the inspection, negotiated it down to 180k.

It really depends on the deal, the amount of interest in the property, and your experience level. If you find a deal on the MLS and every one and their mother is going to be putting in an offer on it, my advice would be to offer more and leave the inspection contingency in place.

Haven’t had a chance to read the whole thread but my advice is based on single or small multi family properties. Larger multi is an entirely different topic.

Post: To LLC or not to LLC?

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Amanda Buckson

No. Start your own thread, your hijacking someone else’s.

Post: Looking to buy multi- family properties

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Latressa Byrd

That’s a pretty broad question but I’d have to say first you should learn how to screen deals. Learn how to put together an APOD which helps to determine all your expenses including a fund for capital expenditures, a percentage for vacancy loss, repairs & maintenance, taxes, insurance, mortgage payment, etc. Do your due diligence on what rents go for in the area your investing. And then find out the different returns on each deal you screen so you will be able to weed out the bad ones.

Look into the BRRRR strategy. This stands for buy, rehab, rent, refinance, repeat. Buy the book. I'm a big fan of this and it really helps to make the most of your money when you begin investing.

The best investment you can make is into yourself. Listen to the bigger pockets podcasts on the drive to work, and on the way home. It’s an easy way to educate yourself.

Post: To LLC or not to LLC?

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Matthew McNeil

Is there a problem with setting up an LLC in a different state then where the asset is physically located?

I listened to a podcast regarding these series LLCs and it was implied that the series LLC would intentionally be formed in a different state (such as Texas) other then where the asset is located. Texas is supposedly the cheapest and also has very strong asset protection laws.

Post: To LLC or not to LLC?

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Matthew McNeil

Yes Matthew brings up a good point about FHA, I forgot it was an FHA loan. So take what I said with a grain of salt because I have never quitclaimed from an FHA loan before.

Matthew- any info on series LLCs?

Post: To LLC or not to LLC?

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Kyle M.

@Kyle M.

Yes your mortgage broker is going to tell you not to quitclaim it in order to cover his own butt. And yes, he is correct, there is a due on sale clause. But in all my years of investing, I have never seen the banks ever enforce this when quit claiming to an LLC. you'll be fine, your lawyer will help you do this.

The best Scenario is to have each property in its own LLC. however there are obviously costs associated with doing this. So if you don't have a lot of equity in your properties, it is ok to keep them all in one LLC for now. Keep in mind if you get sued at one property in an LLC, all of the other assets in that LLC are technically exposed to litigation as well. Just make sure you have good insurance and you should be ok if you are just starting out.

There is something called a "series LLC" I have heard about where it is possible to create one parent LLC and have each property set up as its own series under that parent. However, I don't know anyone that has done this, and I don't have enough info on it unfortunately. it seems like the most cost effective and safest alternative to separate LLCs for each property

Post: To LLC or not to LLC?

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Tim Robinson

You should have purchased in your personal name and then quitclaimed it to an LLC for the triplex. You would have gotten a residential loan this way.

You can still go back and quitclaim it from your LLC and into your personal name and refinance with a residential loan and then quitclaim it back to an LLC. It's unfortunate because you'll have to pay closing costs again but it will probably be worth it in the long run with the lower and fixed interest rate as opposed to the adjustable rate commercial loan you probably got

Post: Used appliances or new ones?

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@David Simard

New. I can’t put enough emphasis on this. Appliances are one of my biggest headaches. I used to buy used and for the amount of times I’ve had my appliance guy come out to repair broken appliances I could have bought new appliances x 2. Used is not worth the headaches. Buy new and it’s one less thing you have to worry about breaking. The price difference isn’t even that much. I just got 2 sets of fridges, ranges, DWs, micros for a little over $3k. I would have probably spent a little less then half that for used. New appliances really give more appeal to prospective tenants and make a huge difference in the look of the kitchen. and as someone said earlier, it will only help the house to appraise higher if doing a refi. Stainless is practically the same price as white/black appliances now a days anyways.

Do things once. Do them right.

One other thing I’ve noticed over the years of owning and renting property is the nicer I make the apartment, the better tenant I tend to get and the cleaner they are likely to be. Maybe it’s just a coincidence but out of all the apartment units I own, my nicer units (with new SS appliances and granite counters) happen to be occupied by my best and cleanest tenants.

An idea I had was to add an appliance care/ granite care addendum to my leases which give average costs of replacing SS front pannels of appliances that will be billed to them if they dent the stainless facia, what NOT to put in the dishwasher, and how to care for granite and what types of chemicals/oils are not granite friendly. This puts a bigger emphasis on how closely you will be monitoring appliance condition and counters when they move out. It may help, it may not. It’s worth trying; you would be surprised how many tenants mess things up not intentionally, but just out of pure ignorance because they were never educated on certain things that you or I would assume is common sense.

The only thing I would suggest buying used is if you are buying washers and dryers. I believe the older models are made better then the newer ones. But that being said, I do not ever provide washers or dryers to my tenants, those are even bigger headaches.

Post: 11k saved for an investment prop... NEED A CONFIDENCE BOOST

Frank MarattaPosted
  • Rental Property Investor
  • Connecticut
  • Posts 105
  • Votes 68

@Patrick Crehan

House hacking is the best thing you can do to get started! I wish I did this. Pull the trigger! Buy something that might need a little work but Just make sure the mechanicals are in good condition and you aren’t going to have any major items come up that you can’t afford to replace right off the bat. Put in some sweat equity and over the next couple years slowly renovate the little things yourself, be frugal with personal spending, keep saving, keep educating yourself through the forums and podcasts, and you’ll be surprised where you end up in a couple years. Real estate is not a get rich quick scheme. Get started now! The one regret I have is not getting started sooner.