All Forum Posts by: Gabriel E. Galloza

Hello BP Community,

Hope all is well. I recently moved to Utah, and have a rental property in New Jersey. I purchased the property as a sole proprietor, and would like to transition to an LLC. Since I live in a different state, I don't know what the best strategy is. From my understand, I need to open an LLC in one, and register in the other state. What would be the most ideal way to maximize my tax returns. A penny for your thoughts?

With Kindest Regards,

Gabriel.

Hello BP Community, 

Hope all is well! I recently Purchased a Duplex utilizing an FHA. The Property is a fixer upper, and as I'm slowly fixing it, more issues are arising. when I initially Purchased the Property, the Home inspector I utilized told me the roof had 5 years left, and when my contractor went up there to fix the fascia today, we realized the roof needs to be replaced ASAP. I Don't have many reserves ATM, and it seems like the more i try to accumulate reserves, the more issues arise.

What is the best way to obtain a loan for home improvements? I qualified for a personal loan, but the APR is pretty high (27.97%) is there another way to obtain the loan at a lower APR?

Thank you in advance for your responses, greatly appreciated!

Jonathan Styer,

His lease expires October 2021, the previous owner had him sign a 7 year lease. I am going to speak to an eviction attorney, i just wanted some insight from the BP community prior to proceeding with it. 

Hello BP Community,

Hope all is well during these unprecedented times. I Closed on my 1st property a few months ago, and inherited a tenant who was supposed to leave come September 30th (They were also purchasing a home). They raised two red flags with their mortgage company, lost the property and ended up staying here. The current dilemma I am experiencing is that they has random family members (not on lease) stay in the unit with them for weeks at a time. I already gave them 2 verbal warnings in regards to the guest staying at the home since I only have a certificate of occupancy for 4 people ( 2 bedroom unit). their family consists of 6 people, and with extended family members staying there has been up to 8 people staying for weeks at a time, exceeding the maximum occupancy rate. They don't seem to care, and still do as they pleases. They have been a tenant for 7 years, and out of the 7 years has not paid rent for about 1 year (happened with previous owner). They has only been late once (10 days overdue) since i obtained the property.

My Home owners insurance agent came to the property and submitted a notice of cancellation because of the mess and clutter he had in the backyard as well. Its one event after the other, and although I'm extremely grateful for the experience I am gaining managing my own property, and dealing with such a complicated tenant, I don't know what my legal options are since we cannot evict anyone until October 2021 or if i even have grounds for eviction (New Jersey).

I'm 29, and The tenant likes to push boundaries to see what they can get away with. they confuse my age with lack of knowledge and seem to take advantage of the situation. I Set my foot down on several occasions and it doesn't seem to get anywhere. Ultimately i would like to get rid of this inherited tenant ASAP. I understand cash for keys is always an option, I would like to do that as a last resort. 

Any Advice is greatly appreciated, as always! Thank you BP Community for taking the time to read my post.

With Best Regards,

@Mark F. Thank you for the link, its extremely helpful! My lawyer said i'm entitled to the full amount due because as i inherit the lease. This case wasn't a regular sell, The owner declared bankruptcy, and the tenant received wrong information from a friend. The lease was a 7 year lease, and the wording of the lease made the tenant responsible for the full amount for the duration of the lease. The tenant has been there 5 out of the 7 years, and the reason why they stopped paying rent was because of the bankruptcy. However a bankruptcy isn't a pardon on any rent due, and the lease laws are separate from bankruptcy laws. and any rent due has to be paid regardless of who owns/owned the property.  My lawyer also made a non negotiable clause that would give me the rightful ownership of any amount due by the tenants. 

***UPDATE***

Hi BP Community,

Hope all is well. I discovered some new information that Lightened the situation. After speaking to a few lawyers, i discovered that; In NJ if a Lease is inherited with a purchased property, The New Landlord can legally claim the unpaid rent and would rightfully inherit the tenants debt to the landlord (in this case, $18,000). I was able to leverage this into having him sign a Lease Addendum with my terms that protects me from him bailing overnight. (I'm keeping the existing lease because signing a new lease will void the repayment clause, an Addendum would be best in this situation). 

I made it clear to the tenant that small claims court is an option, however i am not going to go down that route as long as they give me 30 days notice and turns over the apartment in its original conditions. Since the tenant is actually in the process of closing on a home, he understands that the information i obtain can potentially raise a red flag during his closing, ultimately getting denied by all banks. 

 My intentions aren't to jeopardize their milestone of purchasing their own property regardless of the methods they used to obtain the down payment (didn't pay rent since DEC 2019). I'm not Judging them, on the contrary i applaud their creativeness of leveraging the Landlords Bankruptcy to their advantage and purchasing their first home!

We came to a mutual agreement and the terms are as follows:

The tenant owes me a pro-rated tent for the month of Aug (closing date Aug 24th) due at closing. I could've requested the entire month of August. However, since I'm taking ownership on the 24th, I want to do whats morally right, and that is charge rent as of the first day of ownership.

The tenant Needs to provide 1 and 1/2 Months security deposit, on closing (bankruptcy court took the security deposit from the previous Landlord). 

Tenants must also provide me a written 30 day notice prior to leaving property (they close in a few weeks) and have to return apartment in its original condition. 

I am content with our agreement and feel as if i did whats morally right (including leveraging small claims dispute) into getting them to understand the sensitivity of the situation. Thank you BP community for all of your advice, it helped tremendously!

With Kindest Regards,

Gabriel E. Galloza

Good Afternoon BP community, 

Hope all is well, I'm closing on a property with an inherited tenant whose also in the process of purchasing a home. During the closing process I found out the tenant has not paid rent since December 2019, since the previous owner is going through a bankruptcy. I spoke to my lawyer in regards to my options and i have 3 options:

1) Keep the existing lease (exp Oct 2021)

2) Provide a new 1 Yr Agreement

3) Month to Month Lease

When i initially spoke to the tenant, the tenant was stressed out about signing a 1 yr lease, and i wanted to give him the benefit of the doubt (before i found out about the payment issue).  I told him we can keep the initial lease in play, however tenant has to come up with security deposit (bankruptcy court took security deposit) and 1st Months rent. We shook hands and agreed, to find out a few days later from my realtor, he doesn't want the terms we agreed on, and now wants a new Month to Month lease. He also requested a deduction (what a guy!). I'm not fond of Month to Month Leases, and with that there's also the possibility he vacates the property in October, or November, and it will be challenging to find a new tenant during that time. Im worried that he also picked up the habit of not paying rent, and will do that, forcing me to evict him. im also concerned that with this pandemic, since he will have the courts on his side.

This is my first deal, and i'm already dealing with obstacles, and i feel a bit inexperienced to handle this alone. Thank you BP Community for helping me navigate through these tides. 

With Best Regards, 

Gabriel

@Dusty Ackerman It is my intentions to let him go, im Debating giving him the security deposit since he broke the lease, and there are some damages to the unit (i cant prove it was him). 

@Earline Caudle It is to my understanding that the previous owner renovated the kitchen in 2018 (as per MLS) and the renovation happened during the tenants lease. Im going to deduct all obvious damages caused by the tenant and return the remainder deposit.

@Theresa Harris Why is September easier to rent then November? I obtained the property below appraised value and has the potential to convert into a triplex. Im definitely picking out my own tenants once he leaves, and started vetting out people as of now so come time when he leaves, ill have someone lined up.

I purchased a Duplex with an inherited tenant that signed a 7 year lease expiring October 2021. The property closes next week, and i find out today that the tenant is also purchasing a home, and he will be vacating the property, ultimately breaking the lease. Would it be ethical, and lawful as a Landlord in my position to Keep the Security Deposit? The unit is also distressed, and needs a makeover, i just cant prove he caused the distress. Property is located in NJ. Any Suggestions, stories, etc are greatly appreciated!

With Best Regards,

Gabriel

@Sandy Gabin i anticipate the worst case scenario, so i would assume there would be heavy traffic throughout the house. im going to preserve the wooden floors for when i decide to sell the home (would appraise higher). the current town i own a duplex in has a rent range of $1,400 to $2,000 on the same street. the higher end apartments have hardwood floors, and laminate waterproof flooring in the kitchens. I guess Carpeting the bedrooms would be inexpensive, and would also protect the original hardwood floors. I am going to allow pets, because there is a higher pet friendly apartment demand in my area. 

@Frank Hinck Ive never heard of solid surface counter tops. how durable is the material? I favor cost over price, and i would rather pay a little more, to lessen the long term cost. I agree with Tile in the kitchen, that is a good recommendation. what are your thoughts on waterproof laminate or vinyl flooring in a Kitchen? @Sandy Gabin is remodeling soon as well.