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All Forum Posts by: James M Smith

James M Smith has started 6 posts and replied 35 times.

Post: Any suggestions for Landlord Insurance in Tx??

James M SmithPosted
  • Investor
  • Mansfield, TX
  • Posts 35
  • Votes 9

I use Progressive (American Stratigic Insurance) and have had 2 claims so far for roof replacement due to storm damage.  Only issue is for properties over 35 years (please confirm specifics on years) they do not offer recoverable depreciation on your roof.  So if this is an older Duplex you may want to take that into account. 

Post: How much home can you buy in your city for $200,000?

James M SmithPosted
  • Investor
  • Mansfield, TX
  • Posts 35
  • Votes 9

Just closed on a 4/2/2 in decent shape for 160k after some paint and deferred maint items being addressed it is right around 225 ARV. Rent is 1850 and had 3 showings today. Will probably get security deposit tomorrow.

Post: How do I screen International Students???

James M SmithPosted
  • Investor
  • Mansfield, TX
  • Posts 35
  • Votes 9

I just had a group of international students ask to apply for one of my properties.  It would be 3 of them and 1 US citizen who is employed.  How the heck do I review their applications?  They claim they get $1500 per month in living expenses but I dont know what kind of documentation to ask for, other than bank statements, or how to determine if its legit.  Any assistance from someone who has had experience with such matters would be greatly apprecaited!  I would hate to have them pay $160 in application fees to just have me not be comfortable with the situation and back out.  Thanks as always to such an awesome community!

Hi Mike Cumbie, Thanks for the conformation.  Just wanted to make sure I wasn't missing anything.  My gut was to stay out of it but since this is kind of a different situation that I hadn't heard about before I thought I would throw it up to the brain trust to ensure I had considered all the angles.  Thanks again, as always, to everyone for their input and responses!

Hi Kai Van Leuven, Thanks for the input.  Your situation is slightly different in that someone wanted out (You handled it exactly how I would in your situation).  Let me summerize my situation so its a little more clear (i may have burried the lead in my above post)

The problem statement: 

  • His income is how they qualified (she had none)
  • He wants to stay in the house and wants her to move out
  • She wants to stay in the house and wants him to stay (reconcile)
  • Both parties want to stay in the house but one party wants the other to move out.
  • From a legal perspective they are both on the lease so I cannot require one of them to move out and they need to come to an agreement between the two of them

Thanks again!

Hey Guys,

Have an interesting situation, tried searching the fourms and using google to find precidence but came up with nothing.  A couple rented a house of ours a couple months ago (16 month lease) and things have been great.  Property is in good condition, pay rent on time etc.  I just got a call from the boyfriend this AM and apparently they have broken up.  He confirmed he wants to stay in the property (and can afford it) but wanted to know how to get her out.  Apparently she went to stay with a friend after they broke up but came back and said she was on the lease and he couldnt kick her out (technically correct from my position).  He wants to know what to do.

From my position... he was the one with the income so I dont care if she leaves but they are both on the lease.  I cannot do anything to get her out so it is a domestic situation that they need to work out.  My advice to him, that I am preparing to provide, is Ride the lease out and when the lease expires we will renew in his name alone.  However, if he wants to persue having her leave prior to the end of the current lease he needs to contact an attorney to make sure he does it in an appropriate and legal way.

Has anyone had such an experience or have knowledge of how to handle the situation that can provide advice to me of the best advice to provide to him/them?

Thanks,

James

Originally posted by @Thomas S.:

If you believe landlords should and can charge for their time try watching some of the e "judge Judy" type reality court shows on TV. Landlord time charges are tossed every time. Material cost and contractor fees are what a landlord may legally deduct from a security deposit..if they are lucky.

Hopefully I never end up on TV for any of my investing activities, lol.  One thing to remember about Judge Judy and the like is that even though the show is called "Judge" Judy she is acting as an arbritrator not as a Judge.  Also, the show covers the cost of air fare to LA, accomidations, and actually pays the awarded amount for the losing party.  In this instance if they just paid the 3k for the carpet replacement I would be estatic and much better off than sending an invoice that will likely be written off as bad-debt on my taxes in 2017 or 2018.   That being said, as I have stated in other responses most of my legal knowledge was comes from Ally McBeal so who am I to "judge", haha.  

Thanks for the input!

Originally posted by @Michele Fischer:

I know plenty of people in higher end rentals that remove the garbage disposals, it just depends on how much time and energy you want to invest in them.  Over and over again.

When we first started we charged for everything, over time it mellows out and we waive more items in favor of getting on with re-renting and our piece of mind faster.  The chances of getting paid are pretty slim, so the difference of a few hundred dollars doesn't matter to appear more reasonable to the tenant, their legal counsel, and/or a judge.  

In 7 years we have only had one issue with garbage disposals but I imagine if we begin having issues on a regular basis, as it sounds like you have, we will reassess.

I agree, the chances of receiving payment are slim and we aren't going to press this matter in court (blood out of a turnip). I don't actually expect this tenant to pay a dime given a number of final notices that have shown up since they moved out.

However, documenting the charges allows us to write the amount owed off as bad debt on our taxes. As such, I want to ensure our charges are reasonable from the standpoint of the IRS and, in the rare possibility she challenges us in court over the charges, reasonable before a judge.

I feel like our total amount being less than 1/2 what it would have been if we hired someone else to do it helps justify that we were reasonable with our charges. I think Greg hit the nail on the head that in Texas some JPs will allow LL charges and some won't and if I combine that with your point of charge less than the going rate I come up with something like: "Charge a fair rate for your market and accept the possibility that a Judge might or might not accept it."

The only question, that unfortunately you may not be able to assist with, is in the event that a judge decides I cannot charge for my time how likely is it that he/she hits me with triple damages and is that only on the amounts they throw out or on the entire amount (again likely based on the Judge and if they had a good day or not). Just curious if anyone in Texas, or elsewhere that has a similar law, has had this triggered on them. It seems to me it is there to punish gross offenders but likely wouldn't be triggered in most instances. But again, most of my legal knowledge comes from Ally McBeal.

Again, thank you for your input! I truly appreciate your views (albeit different than mine in some instances) on these matters. I really do appreciate the dialog and, if you aren't too peeved with me, would appreciate the opportunity to discuss your experiences in the biz and how you've structured your communications with your tenants as I imagine they are different then mine. I would be happy to share mine with you if you are curious how us country boys communicate ;) I will try to keep the y'alls to a minimum.  

Originally posted by @Greg H.:

@James M Smith

JP courts neither set precedent or are help to that standard

Saying that in 27+ years I have never had a tenant overturn my deductions with less than a handful of challenges.  

 Ah, thank you for the education and the history!  I have to regretfully admit my knowledge of the legal system is based almost souly on the season of Ally McBeal I watched many moons ago and the semester of BLAW I took for my BS.  

Given your relative proximity, years of experience, and Mod status would you care to weigh in on the invoiced items and amounts?  Please feel free to be honest as I feel you might be in the best position to weigh in and tell me if I am being unreasonable in any (or all) of the charges.  

Thanks again!

Originally posted by @Michele Fischer:

You can use whatever rate feels fair, but be aware that if the tenant challenges it, all DIY work will most likely get thrown out.  We usually opt for a rate slightly lower than what it costs to hire the same work.

I would remove the garbage disposal before you re-rent.

I would remove the charges for light bulbs and mowing and add a comment at the bottom that you could have but did not charge for them, to show yourself as reasonable rather than petty.

Are you suggesting to not provide a garbage disposal or to replace the existing one?  In this area, garbage disposals are considered standard issue.  I see in your bio that you and your husband focus on low income housing.  However, our cheapest property is valued around 200k, in some areas this wont buy you a hole in the ground but in Texas it still buys a pretty nice home, so the expectations are a little different. Honestly, your returns are probably better but we find, in general, that we are more comfortable in the range we are in, for now.

Mowing was a cost actually incurred by our landscaping contractor and, in this area anyway, the city can be pretty quick to levy fines for having un-mowed grass (especially when it is knee high).  Also, it was knee high the day after they moved out, its not like we waited a week or two for things to get out of hand then tried charging them.

Lightbulbs are about $3 each but require a trip to the local Hardware store and time to remove the light shade, etc.   I feel like it might be taken as patronizing if I say not only are you not getting your SD back and you owe us an additional $2k but hey since I am a nice guy I'm going to wave $70 in fees I could have charged...  I just assume charge it all and if they want to question it I can accommodate at that point in time.

Do you not have the expectation that if you provide a property with all working lightbulbs that they give it back with all working lightbulbs?  Mind you, I wouldn't charge for 1 or 2 but where do you draw the line, 10, 15, all of them?  Not asking to be a jerk, it is just things like this that most don't consider until it seem like too much to them and everyones threshold is different.  This is exactly what this post was about, polling the general investor base to see what "on average" is considered reasonable.

Thank you for your input!