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All Forum Posts by: Jonathan Dickerson

Jonathan Dickerson has started 4 posts and replied 22 times.

Post: Hello everyone, new to bigger pockets

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

@Vince Violante Welcome!

Post: Seller Financing Deal Structure

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

An investor friend offered me first crack at buying his paid-for 5bd/3ba SFH that appraises for $500k and is currently rented for $3k/month on a 12-month lease. Expenses HOA - $125/month,

TAXES - $222/month,

INSURANCE - $333/month, Property management - 8% of rent = $240/month. Expecting annual appreciation of 4% on the property value and 5% on the rent, HOA, taxes and insurance. The seller is open to seller financing. I was hoping to structure a deal that involves paying the seller every month and then a balloon payment in 5 years (when I can get an 80% LTV cash out refinance to put a mortgage on the property without having to put any money down because I'll have built up at least 20%). Any suggestions on what is a fair amount to offer for the monthly interest payments and the balloon payment? Thanks all!

Post: Setting up an LLC for our rental investing

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

@Denver Chavez. Your use of the word "partner" = you should definitely use a lawyer. And while there, you should draft the legalese necessary to dissolve that partnership. Not because all parentals fail, but because, over time, both of you may not precisely remember what the other said 5-10 years prior. In writing makes it clear for everyone and that avoids so many hassles later.

Post: Do you provide fridge for you Rentals?

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

Advice I received from a very well-to-do landlord here in Denver (with 50+ paid-for SFHs) is never include a fridge with ice/water in the door. That fridge feature is the #1 source of fridge repair requests because those parts routinely break. And unless you can prove it broke due to tenant negligence, the security deposit can't be used to fix it which will leave you on the hook every time.

Post: Sioux City, IA Multifamily

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

@Nathan H. Congratulations, sir! Very excited for you!

Post: Sioux City, IA Multifamily

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

@Nate Phillips -Same question. I lived there 15 years ago to play for the Sioux City Bandits but haven't been back since. I found a multi near 12th and Jennings and another near George Street/Military Road and 21st and the numbers for both look good, but I don't know the neighborhoods.

I'm not expecting much appreciation from either, but I'm Buy & Hold and they both seem to cash flow well after using the BP Rental analysis tool, so if the neighborhood and inspection come back clean is thought I'd toss offers out.

Any thoughts are greatly appreciated.

Post: Can Prepaid Rent --> Eviction With No Refund Given?

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

UPDATE: For anyone who's interested, the tenants finally agreed to a new lease which lasts exactly as long as the rent they pre-paid. They'll be moving out at the end of January 2020. No eviction lawyers were utilized, no refunds were given and never again will I make the mistake of trying to make a bad tenant a good one because they wave cash in my face. Thanks for all the input, everyone. Happy Monday!

Post: Can Prepaid Rent --> Eviction With No Refund Given?

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

@Max T. Thanks, Max. That is the general consensus of this forum, though it is at odds with what my lawyer says. I don't want to evict them at all, so I'm hopeful it doesn't come to that.

Post: Can Prepaid Rent --> Eviction With No Refund Given?

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

Not that anyone asked, but: 

1) The tenants paid rent on time exactly 14 of the 36 months they lived there. So accepting month-to-month seems like I'm setting myself for lots more missed, late or unmade payments... hence the only reason I allowed them to remain: their offer to paid in full so I would no longer be on the hook to track down rent monthly. 

2) During the 3 years they were under the lease, they were embroiled in a lawsuit with the HOA company and during that time fell more than $20k behind in their rent. As one of those landlords who give landlords a bad name, I allowed them to remain because we didn't want them to be homeless after their (adult) daughter who was on the lease left them high and dry and their (adult) son wound up on the pills and got arrested. They aren't from the area, and after the accident, both were disabled and unable to work, so booting them would have left the homeless.

3) After they received their settlement, they paid the full amount of back rent but did not pay any late fees that they accumulated to continue staying at my place. This is where our story picks up. 

4) I intended to boot them out after getting the cash but they volunteered the agreement (again: THEIR idea). I believe that asking them to pay what they said they would is reasonable. 

@Andrew B.

5) The new agreement makes no reference to a prior lease or arrangement. In response to your question "On a completely separate moral issue, how can you justify keeping rent for months in which you don't intend to provide the service? That's shady business practice in my mind." I agree completely, which is why this is not my plan. My plan is to ask them to pay what they owe IN THE MANNER OUTLINED IN THEIR proposed agreement. I'm not understanding how this is different than any other legal arrangement where someone doesn't hold up their end of the bargain: If you bought a car, put $5000 down and then stopped making payments, your car's gonna get repossessed and you will not receive a down payment refund. If you bought a house on a 15-year note, paid $50k down and then called the bank to say "I know I said I'd pay you $1000 every month, but I've decided (unilaterally and without talking to you) that I'll just pay you the full amount at the end of the 15 years," I'm confident you'd get foreclosed on them and the bank wouldn't return your $50k down payment. If any of that is inaccurate and/or if someone can walk me through how my analogy doesn't hold, I'm (truly, not sarcastically or defensively) all ears. 

@Wayne Brooks - I don't want them evicted. If I were in front of the judge, I wouldn't be asking for them to get evicted, I'd be saying "Your honor, can you please have them pay what they said they would?" If tenants (in front of the judge) were to say "we don't wanna,"  I think I'd say "Since they aren't doing what the legal agreement says they should, can you evict them now?"

@Mary M. - In reference to them being a 'good tenant,' see above and then consider this, which is an exact quote from the tenants (after buying the car and the furniture): "We have the money, but if you don't mind, we would like to sit on the [settlement] money for a while. It just feels good to know it's there right now."  So to clarify, I wouldn't be evicting them because of what they spent their money on. I could care less. I wouldn't even be evicting them because they HAVE the rent money they agreed to pay, they've just decided on their own they'd rather not pay it according to the terms of the agreement... I'd simply be evicting them because they are horrible at paying month-to-month and are in default of the agreement. 

There were many things I was hoping to receive from this post, but the chance to justify evicting a non-paying tenant wasn't something I foresaw. Very interesting.

And YES: I'm well aware (now) I should have evicted them much earlier and then I wouldn't be in this position... but I didn't want injured/disabled individuals homeless if I could help it. I don't regret not putting them out on the street, even though I fully acknowledge that would have made my life, wallet and stress much better off. At that point (12 months into the 36 month lease), I just couldn't picture evicting someone my parents' age. After the last 2 years and knowing that they HAVE the money they just don't want ME to have the money, I can picture it.


Post: Can Prepaid Rent --> Eviction With No Refund Given?

Jonathan DickersonPosted
  • Rental Property Investor
  • Aurora, CO
  • Posts 22
  • Votes 23

@CJ M. - Primary reason I'm not open to it is because she HAD the rent money... but then bought herself a $15k car (which she proudly showed me) and about $10k in new furniture. I'd also probably have a lot more empathy for the situation if this agreement hadn't been one that SHE proposed. 

UPDATE: spoke to an attorney and because the new agreement is NOT month-to-month, but is a pay in advance for a preset length of time, failure to pay the full amount means they can be evicted and none of the paid rent needs to be returned since none of the rent is 'unearned.' The parallel was if someone paid $900 of $1000 worth of their monthly rent and got evicted, you wouldn't have to return the $900 they paid since they never paid the full amount of rent due. That may not be the case in your state, but that's what my attorney here said. Now I just have to decide if paying $500 to get the eviction process started is worth it... decision, decisions.