All Forum Posts by: Greg Moore

QUESTION: Can a Triple Net Lease solve my dilemma?

BACK-STORY: I bought my in-laws’ home with a goal of using their equity to payoff debts, lower their expenses, and allow them to retire. To keep the expenses as low as possible, I had them sign a Lease for rent equal to my mortgage payment on the home— nothing more, nothing less. Also in the spirit of keeping expenses low, I don’t have professional property management. I’ve now owned the property for 10 months and I’m trying to decide what kind of rental agreement to put them in in a few months when they renew.

DILEMMA: Having owned the home for 20+ years they just make decisions like they still own it. Something breaks and they go out and buy what they want, and then call me to ask for reimbursement (eg incidentals they should pay, or big ticket items only they choose higher-end stuff I wouldn’t typically put in a rental). But then on the flip side, they want me to handle all the contractor stuff as if they are tenants. They call multiple times a week for property management issues that I don’t have the time for. It feels they are homeowners when they want to be, and tenants when they don’t want to be. I need to move things to higher ground with the right lease structure and bring clarity to what’s their responsibility and what’s mine. I’m wondering if a Triple Net Lease would solve this dilemma, but I’m not sure if this would be unusual for residential and what duration (years) makes sense? They are family, so I want to keep their costs low and make it good for them. But one way or another I need someone other than myself to be responsible for property management. (Note: the property is in another state than I am).

Thoughts?

I met with a Realtor about this last week.  She told me Indian Rocks Beach is the only gulf beach town that allows STRs.

@Carolyn Morales could you please also message me? I’ve just acquired a property I’m considering getting Sec8 qualification for. Thanks!

@Marvin Bobb I auto-generate an invoice in Quickbooks Online that gets sent to the tenant via email on the 20th. They can click and pay right from there. When the payment comes in, Quickbooks automatically logs it to the correct property using the “Classes” feature. I’ve used Cozy and Cash.app too and like them both but QBO is my favorite.

@Ryan Friess - may I trouble you to message me some contact info for James Larschan? I wasn't able to find him on BP. Thanks!

@Mark Gallagher thanks for the reply. One question for you: have you had any problems with claims with NREIG? In my research prior to your reply, I saw someone had posted a "Buyer Beware" warning based on 3 separate claims being denied for erroneous reasons.  The main take-away was they will be happy to write you a policy and take your money, but are less happy to follow through when you need them.  If you have any wisdom on this topic, I would welcome it. It sounds like you've had a good experience thus far or you would most likely not be recommending them. Thanks again!

Greetings Florida Real Estate friends - I'm closing soon on my first in-state buy-and-hold rental property in my home state of Florida. My usual insurance provider just informed me the home doesn't meet the qualifications for the policies they typically provide (e.g. owner or tenant-occupied), and I needed to find a company that specializes in insuring unoccupied homes while they are being rehabbed.  Please let me know your recommendations (quickly! I close tomorrow!) Thanks :)

The General Contractors I work with tell me to never put carpet in your homes in Florida. Mold, critters, and everything grow year round. I put hardwood-looking tile in the homes I live in, and hardwood looking laminates in the homes I rent out to tenants. There are so many great laminate floors now for $3/sf that look like authentic hardwood floors you’ve got some great options. Good luck!

@Benjamin Sussman One option is to reduce your 401k contribution to the employer match level — nothing more, nothing less. In this approach, you’re optimizing yourself returns on the 401k, and then redirect the amount you’ve reduced it by into Real Estate investments.

@Ricky Davis I do agree with your motion that if I have something not working well the first place I should tend to is my education. But in the matter of Appraisers, me knowing something is not going to change the outcome. I can neither hire them nor fire them even after I’m educated. 
In contrast, I do not ask the contractors how they do their job and ask them to run an educational class for me. I just hire the ones that I have confidence can do the job and fire them if they don’t.