All Forum Posts by: Isaac S.

hey everybody, thanks for chiming in! Yeah, I have definitely been analyzing NNN lease properties for the last 12 months, along with reading and researching as much as I can about them. It is my initial reposition instinct for all the reasons @Dave Foster and @Kevin Sellers point out. I just don't like the idea of so many of my proverbial eggs in so few baskets, or not being as familiar with the asset class, and the looming recession we are over due for, combined with not necessarily having much location knowledge, if buying in a secondary/tertiary market that I have no direct experience in. Also, it seems like the primo NNN lease assets, get snatched up before they get posted on loopnet or crexi. Although I have gotten on quite a few NNN brokerage mailing lists, I am nervous about the 45 day timeframe and lining up a great up leg(or two) that actually completes the 1031 and ends up being a stable safe move. Enter DST's and diversification of location and asset type, combined with their 5-10 year cycle timing, that seems to line up with the usual ebb and flow of the economy(if timed right). Always a bunch available at any given time to pick from, along with some unlevearged offerings, but, Just can't bring myself to have zero control of exit. I do like that they are usually managed by really smart and experienced people with lots of impressive titles and credentials, but just don't like that they get paid even if losing money.

Looking to get feedback from others that have 1031 into DST Delaware Statutory Trust.

We have tons of equity, low debt, fully depreciated, and I have been dealing with toilets, trash, and tenants, for 20 years...I often fantasize about passive income, because owning a 90 year old apartment building, is not passive at all. I tell people that I start my day with a list of 100 things to do, and by the time i finish the first 10, the list is already back up to 120 and I'm lucky to end the day back at 100.

Maybe this is a moment of weakness, but, it sure seems like I have them more and more often and that lifestyle of a passive investor analyzing DST's every 5-7 years, and checking on quarterly reports keeps seeming more and more attractive!

Am I missing something? I know fees are high, but, the passivity is worth it, to me, as long as the cash flow and appreciation are consistent. Hell, even just not loosing equity and steady cash flow would be fine.

Either one will have a very distinct odor that will be very conspicuous. Oh, if you see flames it's too late, the weed grower will have started and electrical fire messing with the wiring to bypass the meter, and the meth lab will have had a chemical explosion of some sort.

@Jennifer T. nailed it, I agree! 

The term "sweat equity" was probably coined by a landlord. 

Experience, good systems, and luck can make it seem like HGTV rainbows  and puppies for some time, but eventually somebody will need to sweat and you either can afford to hire someone because of your financial planning/skill or are willing and able to DIY.  

@Benjamin Haberman I feel your pain! It can be very stressful, self managing and I have absolutely had crazy tenants message me late at night, early in the morning, often about things that could wait for normal business hours and/or were not technically my responsibility or had been a problem for several days or weeks and they decide that 10:30 pm Friday, Saturday Sunday night is the right time to message you.

Some people will mistake your friendly demeanor as being their friend, some will look to you to be their surrogate parent. And yes, some will obsess about every little amenity in a quest to get the best level of service for their money, some to the point they are taking advantage of you....who would not want a personal 5 star concierge to fix every little thing?

I agree with the other suggestions 1.work phone(google voice) 2.specific maintenance request procedure(in writing or message during 9-5 M-F) 3. Don't be afraid to politely say "no"

Also, don't say "no" too often...I like obsessive tenants like that, they often keep the place clean and report every little issue, long before it becomes a BIG issue and if you keep to the standard of an OCD tenant you will always have the asset in tip top shape to re-rent or sell. 

Example, the crawl space could probably be secured with a few dollars of chicken wire or a new latch and about 10-30 min worth of time, but could help you avoid a raccoon or possum setting up a nest or dying in there and stinking up the place(also costing much more to remedy than the latch) OR you may notice a plumbing leak when you secure the crawl space, that may have gone unnoticed for many more months eventually doing some real damage. 

Wether you like it or not, the house is slowly decaying and falling apart(you even get a tax right off for it, depreciation), everything does, stopping that from happening faster or remedying the problems enough to make it last longer or still be an acceptable dwelling,  is the value you add as a landlord.

I hope my reply added value to this topic?

I'll be attending, I'm new to BP, but I am so inspired by the posts and abundant amount of excellent advice here. I am self taught managing a 37 unit in Hollywood. 

It's great finding more knowledgeable peers, I learn something new evry time I visit BP, it will be nice to learn from you too! 

Also, It's great to just talk shop and trade war stories.

@Michael Kiley lol, I was just thinking that In L.A. most of landlords, agents and managers are hard to get a hold of and often times intentionally vague and make you jump through hoops to prove you have permission to get reference.

 I like using credit score, job stability and distance/type of commute(LA newbies think 14 miles is an easy commute, when in reality that could be 1.5 hours) public records check for evictions and criminal records and my personal interview with them.

I can't remember ever having a landlord or manager risk any liability to inform me of a problematic tenant.

Has anyone else actually had a past listed landlord reference give them negative feedback that helped them avoid a bad tenant?

I have 37 units RSO in Hollywood. I'm realizing from reading posts at BP, that I have a lot to learn, despite my current holdings and experience. You should take what i say witha grain of salt, and always consult a lawyer about such matters. Possibly even AAGLA or another local trade org.

I'm under the impression that if the parking was included in the original lease, you can NOT separate that amenity for existing RSO tenants, but, for new tenants you can structure the lease so that the parking is it's own separate lease, and that parking lease is not subject to rent control.  I only know of this from a conversation with another landlord of an RSO because my property has no parking at all.

Also, if you do separate the parking lease, be very upfront about it and don't make it seem like you are hiding it in the fine print of your advert. 

FYI, I have about 30% of my tenants with no car. They love LYFT/uber, walking and the growing subway system, and the occasional car/truck rental, some of your applicants may be the same due to changing demographics. Also, I rent my personal parking spot from a neighbor building for $120. They rent out 2 of 19 spaces to neighbors.

I hope this helps and best of luck.

I frickin love this site. Wow, so many ingenious tactics in this thread. Thanks!  Also, I my pops taught me that the most recent landlord may have vested interest in getting the new tenant into your place, and more importantly for them,  out of their place. Imagine you get a problematic tenant to voluntarily leave, would you torpedo their exit? He always liked to check the second previous landlord, for that reason.

I agree with Marc Roth. Also, I wonder how others would try and have that conversation or would it be in writing ? You just tell them absolutely every last detail or try and play it down a bit?