All Forum Posts by: James W.

I signed up just because I appreciate the responses I've gotten on my few posts here.

Looking forward to hearing what BP has to say regarding your very fair question.

I recently purchased a portfolio of 11 properties, all duplexes and low B to C- class.

Being new to this particular business, I figure I'll make some mistakes... so I played it safe and set each property up as a separate LLC.

The tenants pay their rent to a 12th LLC, which is the "Property Management" company.

I have $500,000 in liability/replacement insurance on each property, plus an additional $1,000,000 umbrella policy over the lot, which gives me 1.5MM in coverage for each property should I need it. (Hopefully never, but who knows.)

When I met with my tax and legal advisors, they all agreed that I'm probably being overly cautious and I could have formed 3 or 4 LLCs instead of 12, and divided the properties into a smaller number of LLCs - but none of them could say they had done a deal like this themselves, so I opted for what I consider the safest and most protective route.

With all that said... how do you all handle multiple properties? Separate LLCs for each? What is the best way to use a "Property Management" LLC?

ANY relevant advice is welcomed.

TIA!

Form an LLC for the property. The $$$ you will spend is peanuts.

(:))

When you get bigger, then you can worry about splitting hairs.

 Jeez Louise, try not to sugarcoat it next time :D

@Gino Zahnd I have 2 questions.

1. Who is your "payments partner"? I want to know the names of everyone who has anything to do with my money.

2. I already asked, but it wasn't answered. I'll ask again: I want to do automatic withdrawals and I need to be assured that the money comes out of the payer's account on a specific date, regardless of when it hits my account. Is that possible with cozy?

I've signed up for an account at cozy and it seems very user friendly. I don't mind paying for the credit checks or background checks - I think that's more than fair given the other features that seem to be offered.

My only concern is the delays in payments - why in the world does it take so long? What is the weak link in the payments - does cozy have to manually do them, and that accounts for the extra delay?

I have some tenants that are on SSI/disability/etc and they have expressed interest in automatic withdrawals from their accounts on the 3rd. Some of them are bad with money and if it's not taken out exactly on the 3rd, they might be coming up NSF. Is it possible to set my tenants up so that their payment is pulled on an exact date every month? (Or at least the first business day after.) 

1. As long as I can be assured that it comes out of their account on the exact day, I am ok with the long delay in receiving the funds.

2. I don't want to have to initiate the payments every month. I want automatic recurring transfers.

@Gino Zahnd I don't blame you for not using the BBB. Thanks in advance for your answers.

Good feedback everyone, thank you all for the comments.

I'll start with gutters and grading, then a dehumidifier in the basement and possibly a sump pump.

This property/situation is just one of many that I have as part of this whole deal (I bought a portfolio). My intent is to fix what I can, if it is reasonable. Provide adequate housing for people in the process, and then move on to other properties in 3-5 years. It doesn't make sense for me to stick $40k into a $90k property that I paid $60k for, so I can sell it in 4 years and see a $5k profit.

Again, everyone, my question is this:

Do I have a legal obligation to advise them maybe it's not a good idea to live that way (leaving clothes on a wet floor)? And do I have a legal obligation to fix the water issue?

Originally posted by @Ryan Dossey:

Did you advertise it as including an "in door" swimming pool? I think you're missing some cashflow if you didn't. 

LMAO

You're the kind of guy I'd do business with :D

@Dumitru Anton it does appear that a lot could be alleviated with a better gutter system and also a sump pump. Thanks for the comment about the flak - I've got thick skin, no worries there. :)

@Vincent Crane your comment about city/permits/etc - the tenants aren't Section 8. I have reason to believe that they knew about the water issues before they moved in. With that in mind - how does the city/govt/etc get involved in this kind of situation?

 1. Thanks for the well thought out response - I sincerely appreciate the numbers and wisdom.

2. I feel the same about the education part - I'm not scared to lose the money if I'm making a horrible decision, which I don't think I am... but even if I'm wrong, I'm still learning things I know I want to learn in this business.

Cheers :)

 It is just a basement, not a bedroom. The laundry hookups are down there. Not sure why you assumed it was living space, but I apologize for not specifying.