All Forum Posts by: Jimmy Vance

I know an investor who has 12 properties and each property is in a separate revocable trust. His primary home is also in it's own revocable trust.

I don't believe he has any asset in his own name, everything in separate trusts.

I believe on each trust he is the trustee with his son as the first named beneficiary.

He also carries A LOT of insurance, uses a top property management company and all of his properties are in higher-end areas.

I was curious, if he's involved in a lawsuit related to one of his properties - I know the trustee has to be identified and usually the target of the suit, but are the properties in his other separate trusts protected. Are assets in separate trusts protected from each other.

They can go after the personal assets of the trustee, but what if he holds no personal assets in his name, every asset is owned by a different trust.

Quote from @Nathan Gesner:

Quote from @Jimmy Vance:

This didn't happen overnight. Start inspecting regularly. You should have noticed something during your first look, during your inspection phase of the purchase, or during your annual inspection in 2021 or 2022. Inspect at least once a year and catch these problems early.

Your PM should give the Tenant a stern warning and a deadline for cleaning the unit. Then reinspect for compliance. 15 days should be more than enough time. Then monitor. If he improves, maybe he can stay. It sounds like you'll want to end this lease when it expires, renovate, and find a new tenant.

I bought near the end of 2021 and his lease expired at the end of 2022. We gave a 3 month extension to evaluate whether to keep the tenant and did our first inspection a few days ago. The PM does them yearly. I have people who want to buy the unit as-is, wanting the tenant. I own free and clear and may pump the money into grabbing a higher-end property. I'll see what happens in the next few days.

The PM messaged him and was as nice as possible, without outright calling him a slob. He blamed the state of the unit on long work hours and promised to do better, but I doubt it. Some people are what they are.

I bought this condo at the end of 2021. The tenant is pre-existing, pays rent on time and doesn't give any issues, seems like a nice enough guy. He's lived there for over 5 years with his teenage son.

The property management company did an inspection today and the place was filthy. If it was vacant I would do a head to toe remodel.

Filthy carpeting, mildew around bathtub, brown stains on shower walls and ceiling (hard water?), closet doors falling off, cabinets need rehab, stove falling apart, botched paint job in a room or two by tenant, sinks that don't work right, stoppers missing on sinks and bathtubs, appears to have done some do-it yourself repairs by wrapping tape around a pipe leak for example, air filter appears to be very old.

The only positive is that he doesn't have trash/garbage all over the place. No signs of insects or other infestations.

A new stove is on the way and they are sending a handyman and plumber to sort out a few other issues the correct way.

Property manager sent over a note to tenant, being as nice a possible without calling the person a slob, to keep the place in some type of cleanly order. He basically blamed long work hours and back to back shifts for not keeping up with the property.

My main worry - is liability if this place becomes a mold fest and he decides to claim sickness and place the blame on me over the condition he created.

I'm sure a few people here had dealings with tenants like this.

Just to give an update on how all of this played out.

We sent a mold remediation company in August 2021 to test the place, work out any issues.

They get there and they call me to advise me that the tenant has his own mold tester taking air samples.

One of the bathrooms comes up with a high mold reading (on his end) - which of course it would since there was a bad flood in that room and we just got there to remediate.

A local law firm decides to take him on. We receive a legal letter. Property manager has their attorney in play, I open insurance claim.

He claims property made him sick in the "three months" living there.

He's also refusing to move out, turning down several keys for cash deals, and continues paying rent.

At one point he sent a 30-day notice to vacate, we approved, and then he refused to leave.

We're forced to get him a hotel room while remediation is getting done.

He kept sneaking back into the property and tearing down their plastic containments that were placed over the bathroom entrance - to prevent them from taking accurate post-work air tests. He also kept entering the property (with no protective gear) while the remediation company was working to take pictures of the work.

While all of this is going on, he's continuously calling property manager with complaint after complaint.

Property gets remediated with several delays due to his conduct. I stopped paying for his hotel at one point because of his conduct.

Finally, this deadbeat goes around his own attorney to contact me directly to reach a keys for cash deal.

Me and the property management company come together to present him with a cash offer to get him out (we went 50/50 on it) - because another 8 months of him would have been hell.

Basically refunded his four months, and bought out his remaining eight. So yeah, it wasn't cheap but I was in a bad spot. I spoke to several lawyers, and all of them said I would win in court.

But, most insurance carriers don't provide coverage for mold claims - and I was warned by my carrier that if they determine his claim is straight mold - they are pulling out and I have to pay out of pocket for my legal defense and may even owe the carrier money for legal fees.

Most lawyers told me, I would win but wouldn't be able to reclaim legal fees from him because he had no assets and barely worked. One lawyer I spoke to had just finished up a mold case against the lawyer the tenant hired - and it played out for five years. That owner spent 75K in legal fees, won the case, has been unable to reclaim monies he spent.

How did this guy get in my property? He used his mother as a co-signor - perfect credit, six-figure salary, home owner.

But, the property manager - who was terminated by the company - never advised me this was a co-signor situation. When I got the application, I thought it was couple moving in together (son and mother have different last names). She never ran his credit, checked his referrals, job status, etc - which is why the management company went 50-50 with me to get him out, to avoid a lawsuit by me against them.

We reached the deal, he left within 30 days, at the end of September 2021. I also made him sign an iron-clad legal release ( I was in the legal field for 10 years and had property manager's lawyer review it).

Fast forward to today, I get a call from another investor - an out of state real estate attorney - who basically went through the same scenario with this same tenant. He moved in to this owner property in October 2021, which is right after my issue with him, and within a few months claimed he was getting sick from the home, brought in a mold guy - but this time the mold report was beyond favorable to the owner. However, he drove the owner and his property manager so crazy that they also made a keys for cash deal to get him out (although for a lot less than mine) by refunding several months rent and returning his security deposit - and also made him sign a legal release.

He got in this guy's place by paying a full year upfront (2100 x 12, since his credit was crappy and couldn't provide income verification). The mother did not co-sign this time. The owner took a chance, he won't take that kind of chance again.

I would love to warn the owner of the current place he's renting. I managed to find his current address, but the property records list the owner as a living trust in California and no contact information.

The guy appears to be what some lawyers termed to me as a "career tenant."

That's a ripoff.

I've replaced two units at my home, one of them last year, both 50 gallon electric, and I think I paid 1200-1400 each.

The most expensive one I ever bought was 2200 and it was for one of my properties. It was a 50 gallon unit, but it was a specific model that produced hot water and also helped produce heat for the home. Only two companies make them, so there is a small monopoly and the price is jacked up.

Originally posted by @Theresa Harris:

Can they tarp it as a short term measure? If the HOA doesn't get back to you by Thursday, leave them a message that you are getting a lawyer involved.

They are closed until January 3. I doubt anyone will be calling until next Monday at least.

Originally posted by @Bruce Woodruff:

Ok, but don't get anyone to do it that doesn't have Workers Comp (see other thread about this)

 My property manager is Berkshire Hathaway, I can guarantee they won't use anyone not licensed and bonded.

Originally posted by @Bruce Woodruff:

Originally posted by @Jimmy Vance:

Originally posted by @Bruce Woodruff:

This is clearly on your HOA and you may have some recourse later with them. But for now, I would hire your own roofer to go and patch the leak temporarily. Don't ask permission, just do it...water can cause serious damage...

Bruce, my property manager called 6 different roofers. All of them are backed up until mid-January. Earliest appointment one of them has is January 9. Between COVID and widespread roof issues - we had a very bad rain storm 2 weeks back when my problem began - the roofers in town are overwhelmed.

Can you get on the roof? Don't if it's dangerous but if there is a safe way to do it, you may be able to find the issue yourself, it's usually really obvious......

It looks too dangerous and it's high up there. From what the roofer told me, there are a few areas that need attention. I wouldn't have the expertise to determine where the leak is that's causing that exact issue. 

Originally posted by @Bruce Woodruff:

This is clearly on your HOA and you may have some recourse later with them. But for now, I would hire your own roofer to go and patch the leak temporarily. Don't ask permission, just do it...water can cause serious damage...

Bruce, my property manager called 6 different roofers. All of them are backed up until mid-January. Earliest appointment one of them has is January 9. Between COVID and widespread roof issues - we had a very bad rain storm 2 weeks back when my problem began - the roofers in town are overwhelmed.

A tenant in one of my townhouses - which are all connected in a condo style within the community - advised my property manager of a leak which is coming from the roof.

These are 3 floor units and on the highest floor, there is water leaking through the bathroom light, above the shower, whenever it rains.

It barely ever rains in Las Vegas, but lately - with my luck - it's been raining here at least once per week.

The HOA is responsible for maintaining the roofs.

I quickly advised them of the issue, as did my property manager.

They sent a work order to a roofer. He sent one of his workers there to examine the roof, issues were found and he sent them his recommended fixes.

However, it's been two weeks and no fixes have been done.

I called the owner of the roofing company and he claims that he can't begin the work until the HOA gives him the green light to begin repairs and they have not gotten back to him.

I called the HOA, they are closed until January 3 - AND, there is rain scheduled for Wednesday and Thursday of this week.

The tenant is really being nice about it, because it's not creating major issues right now - but with the water coming through a light area it could create a fire hazard and might even create ceiling damage eventually.

I have spoken to the HOA more than once in the last 2 weeks - and I have several emails, including three sent today to various reps in the HOA, to create a long paper trail.

From what one of the HOA reps told, the community has a problem with roof leaks and they are looking to replacing every roof in the whole community (they raised our dues twice in the last two years, with the claim being it needed was to change the roofs).

If something goes sideways here, I don't want the legal liability to land on me because the HOA is taking their sweet time in handling this.

At some point should I get a lawyer involved? I know it's only been 2 weeks, but I can't allow this play out until the ceiling needs to be replaced or the electrical wires are damaged or something worse.