All Forum Posts by: Joe Smith

Good info, Rich.

I guess my other thought is, if the property is remote, i.e., more than a couple hours drive from me, do I want the ability for a manager to make a deposit in an emergency if a contractor has to come fix something and has to be paid RIGHT NOW - or - do I just send him a wire from wherever I am and tell him (the contractor) to get to work?

What about giving them a small credit card (under $500 limit, say) as a "petty cash" account?

I'd figure you can monitor this rather easily.

Nobody??

On my residential rentals, I've always expensed small repairs (bad toilet, plumbing, etc) and any real "improvement" like new cabinets, total rehab, etc. depreciated.

Now that I'm looking into mobile home parks and self-storage, I have some questions:

1. Out the gate, if you purchase an existing property, how long and what do you depreciate for MHP's and self-storage? MHP's I believe you depreciate the roads, water lines, etc over 15 years. Is that right?

What about self-storage? That seems more complicated, since you have a lot of pavement and infrastructure, including security equipment, but also the buildings themselves. How is that typically done?

Also, in general, is there a specific rule for what constitutes a "repair" and what is a "capital expenditure"? Until a couple years ago I had someone just do my taxes for me, and the last 2 years I've only had minor repairs on my existing rentals, so I'm not sure myself.

Can it be structured in such a way that the contract for purchase of the LLC references a separate contract for purchase of the property itself? Then the financing would be done solely on the property, but the rest of the purchase in cash?

I'm a newbie to commercial (I've been exploring it for a while now) but have residential experience.

If I find a commercial property, in this case, a larger multifamily, that has it's own LLC as it's name, and, within that LLC are 2 employees and several service and management contracts...is there a way to buy the entire COMPANY, meaning, the LLC, the real estate it holds (which is ~95% of the value) down to the point that the telephone number, etc remains intact?

If I were to do this, does the financing take into account the value of the business outside the building, or is that a seperate transaction as far as the lender is concerned?

My thought is that, if I find a well-functioning entity with good staff, it seems it would be much easier to buy the entire entity and everything with it, than to create a new LLC and have to basically "rehire" the 2 employees I want to keep, etc...

I once told a guy if he "f'ed" with me again, that he'd be wearing his b@lls as a necklace, but that was in my hothead younger years. I don't recommend it.

Reading another post got me thinking about this again.

For those of you who own larger multi-family, self storage, mobile home parks, etc, anything with a "resident manager" who lives on-site--do you give you resident manager signing authority on bank accounts and/or allow them to handle finances?

If so, how much:

1. Everything from paying mortgage on down
2. Only a small account for basic misc. expenses, small repairs, bigger things approved by or handled by yourself or management company
3. Just petty cash
4. Other

Assuming the numbers work, is there any legal issue to offer a small chunk of cash, say $5000, or whatever, as an incentive to the delinquent borrower to take the deed in lieu and vacate the property?

Have any of you attempted (yourself or via your servicing company) to make sure the payments, once modified and on-time, report to the borrower's credit report in an attempt to make refinacing easier?