All Forum Posts by: Garen T.

Unique situation I've never read about. I have an opportunity to pick up a new SFR at about $100K below new market value.

I would take the property, and would rent it back to who I'm getting it from for fair market rent for the area. It would be about $2K/month in rent. Zero mortgage would be owed on the property. They would be using this as the model home for the development and would have all the upgrades. Best cabinets, floors, countertops, molding, landscaping, etc.. Any costs of turning it back into a regular home at the end of the term would be the responsibility of the builder renting it from me. 

What are the implications of the lease that this would have? Many of the normal things would apply, but I'm sure there are issues here that I'm not considering. I currently have 3 rentals, so I have what I consider a solid normal lease, and the builder would certainly pass a background/credit check. Plus, I know him really well. But that just means I need an even stronger lease. 

Would this be worth engaging an attorney to help?

Thanks

Garen

I provide them, and then I add some to the rent. I like doing it based on how much damage can occur to the walls when they move them upstairs. Also, that way I know that the hoses are wire wrapped and I was there to see that the hookups were solid. They are expensive to purchase, and I hope they will last at least 5 years. I hadn't thought of putting something into the lease about when they break. I'll be adding that to my template tonight. 

For the past 2-3 years, I've been under the impression that if I wanted to do a 1031, it had to be for Like-Like property. And that if I wanted to move the profit from a residential building lot, with no home on it, to a finished or under construction home, that I would it would not fit the like-like rule.

However, I just got off the phone with the person who helped me with the last 1031 I did, and she indicated that as long as it was real property, purchased for investment only, that I could use that as a valid 1031. 

Does anyone have thoughts/knowledge on this?

Thanks

Garen

Hi @Scott Mac. 

The breaker is only 2 months old at this time. It was replaced with the troubleshooting so unless they go bad after 2 months, I don't think that is it. 

They have almost nothing on in the rooms. Cell phone is plugged in one outlet. A turned off hair dryer in the bathroom. A turned off fan in the bedroom. That's it. 

Hi

2 months ago my tenant let me know that the Master Bed and Master Bath circuit kept blowing. She would have to reset it, and then it would only stay on for a day or two. I had my service go look at it and they found a plug that was arcing. This is a SFR that is only 4 years old. They replaced 2 plugs and put in a new breaker. It took about 5 days to resolve the issue from 1st telling me, to getting it resolved. The lights were off only occasionally and could be resolved by the breaker.

I got another e-mail from her this past Friday saying that the breaker had tripped again, but now it would not reset. No lights at all in MBR and MBTH. I called my handyman service again, they are bringing in an electrician the best I can get them out is Tuesday at 5pm. 

So, assuming they fix it tomorrow night, it will be 4 days with no power to these 2 rooms. 

Questions: 

1. Anyone know what to look for on this? I'm bringing in the experts, but if you happen to know, it would be great.

2. This is really the goal of my post today. Should I as a good landlord, wanting to do the right thing for my tenant, provide them with a discount on rent, a free dinner, gift card, note in the mail, anything?

The lease is pretty vague on this: I just re-read and the only thing I'm obligated to per the lease is to put them up in a hotel if the entire premise is not livable due to some issue that is not their fault. Nothing is specified as to 2 rooms not having power and everything else is working properly. 

Thanks!

Thanks everyone. 
@natalie 

@Natalie Kolodij, Thanks for your expert opinion on this.

Garen

Hi

I have properties that I will take HELOC loans out on in order to finance the next property. It will be for construction, or acquisition, or fixing it up.

However, this year my accountant just told me that the interest on a HELOC is only deductible if the loan is used on the exact same property that is secured by the loan. I can't deduct the interest on a HELOC on property 1, to fix up or improve property 2. I've read some articles on this, and it appears to be accurate. If I take a HELOC, I can only deduct interest if I use the money to improve the property that is secured by the HELOC.

I would like to be able to use a HELOC loan similar to any other sort of business financing I can obtain. If I use credit in any way, I can write the interest off as a valid expense. If I buy a car for business, and finance the loan, the interest I pay the bank is a valid business expense. If I take out of small business loan, the interest is a valid business expense. If I take out a HELOC on an existing property to improve, build, secure another, I can NOT deduct that interest.

I read many articles on biggerpockets about using HELOC as a means to secure or improve properties, but can that interest be a deducted as a valid expense? How?

My lease says that they have to pay for all damage above normal wear and tear, and I have a form that specifies each charge. They agreed to that upon move-in. 

I have a tenant on a month-to-month lease. I collected 1st and last at lease signing. She has been there for 18 months. 

August 1, right on time I get a payment from her. 

August 2, she sends a text giving notice. She wants to move out during 3rd week of August and is fine paying for the full month. Is asking for a refund of the (now) Sept rent she paid 18 months ago. She has been a decent tenant, and I'm not expecting any damage or cleaining fee. I paid for a cleaning crew prior to her moving in, and then she hired another one to clean my clean SFR.

I wish she hadn't paid me yesterday, but is there any valid reason for not doing the refund of the last month rent? I'm not sure the whole point now of why collect it to begin with. 

Thoughts?

I own 3 SFR's and manage them on my own. 2 of them are a duplex that is <5 mins from my house. Next to me are 2 more duplexes that are owner-occupied, but the owner wants to move. He is on his 3rd PM in 2 years and about to fire this one.

He is asking if I'd be interested in taking over PM role for the 3, and when he moves out it would be the 4 units. 

Rents on these units are in the $1600 range for the 3br/2.5 bath properties. The units are 2 years old and require little maint. B-C neighborhood.

I look at 4 units at $1600 at 10% rate as $7640/year which is not really worth it to me. However, making $7K for very little "possible" effort seems like decent money. This is NOT something I'd like to do for a career. I'm looking to retire in the next 12 months, but at the same time, having multiple streams of income is not something to dismiss.

What are the pro-con list of the PM world? Is there an existing thread here (I assume there are many) where this has been talked about in great detail. Just having a hard time finding them.

Thanks