All Forum Posts by: Gary Carr

Hi there - just joined the BP community yesterday and have been reviewing some other threads, but wanted to go ahead and jump on in to say "Hi". I am a licensed real estate broker here in Maryland and co-own our brokerage with my real estate agent wife, Angie. We have both been in the business for over 15 yrs. We have had a couple of rental properties ourselves in the past, but are looking to do some investing again, on our own or with an investment partner/seasoned flipper. We are hands on with out RE clients and provide a personal level of service, catering to our individual clients' needs (we were just painting a bathroom for a client this past Sunday). So we don't mind putting a little sweat equity into the business. We are also currently updating our existing home as a future investment property & doing most of the work ourselves.

Gary Carr

Broker - Riverscape Realty

We've only on a few occasions split security deposits - but always got the full payment prior to possession of the property. Our standard lease forms do not carry the same weight for security deposits vice the regular rent payments (that is to say there is no language in the lease template for failure to pay the deposit when it is presumed paid already). Not sure what terms you have in your lease agreement, but definitely seek out that legal advice and possibly file a failure to pay (FTP) with the local court. Having the history in court with FTP will help build your case if things go further south. Is the voucher covering the full amount of rent/is there any portion that the tenant is responsible for & is it been paid on time? Also consider if the tenant is breaching any other terms of the lease agreement.

I think that you are on the right track with the PM. One other thing that we have seen (that many managers fail to do regularly) are if there are any intermediate inspections done on the properties or any notes that they may have on hand. You would certainly want to do an assessment as you start handling your own business. Also be mindful that most states require any security deposits to be maintained in a separate escrow account so that it is not comingled with your personal funds.

Agree with @SamualEddinger that renewing the lease with your late paying tenant depends on a few factors. Aside from what her mentioned, consider what your reserves are to cover the vacancy if you let him go. Curious if you or the PM were collecting any late fees per the lease agreement. If they are otherwise a 'good tenant' maybe consider modifying the lease to provide a payment schedule that works for him to set the expectation that maybe he pays half on the 1st & half the rent on the 15th.

@Jaron Walling is coming from a good point - depends on the strategy & on how the deal is financed. Would suggest taking a look at the Tools section which will provide a good guide what to expect. Up front there are the acquisition costs (purchase price/down payment, closing costs), then what kind of updates/repairs are needed plus holding costs while the work is being done. If you are flipping, then you are paying closing costs again - if holding & renting, then expect to add in property tax & insurance, other repairs & maintenance, portion of utilities not being covered by tenants, property manager fees, capital expenses (did you replace that aging roof already?). Don't forget to factor into your cash flows about vacancy rates.