All Forum Posts by: Joe Arida

@Joshua Levasseur can I ask how you craft your lists? Do you buy them or build them? Listsource kind of thing or scrub county records manually? Sorry, not trying to get too far off topic--I am just planning on running a campaign here but am struggling a bit with the list. I was thinking direct mail but its so saturated, and so likely to be ignored. Which skip trace service do you use (if you dont mind sharing?)

@Joshua Levasseur ohh ok. I am very interested in the RVM piece. Have you done VB? I feel like you'd need a very specific script with it to keep people from getting super annoyed with you. How's your success been with RVM vs VB? Do you find one to be better than the other?

Okay so RVM I know...what is VB? Visual Basic? lol

Some of the things in your wording seem like things a renter would not care about. I think you should outline your property description differently, nothing about it is very attractive right now. It is somewhat difficult to read through, and has a lot of things tenants won't care about.

Having it listed that it's a newer furnace, the refrigerator and stove are included--I wouldn't care as a renter. As long as it works and I assume it will stay working. Also, saying that major appliances are included--if you are going to rent a home and NOT including a fridge or stove or oven then GOOD LUCK finding a tenant who will bring their own FRIDGE lol...

Also, I don't know why a tenant would care if the fridge is new, or that there's a door wall, vinyl windows, or that the cabinets are updated or the microwave and range/oven are "upgrades." They don't care what was there before, just what's there now. If you were SELLING the house this would be a slightly different story, as buyers would care about updates and appliance ages. I also think having "NO PETS" twice is off putting. It seems unfriendly to me. I get it though, people have pets and apply anyway, but it just seems unfriendly.

Long story short: Show off what you have, highlight the good things that will directly affect them during their tenancy. Also, change the format into sections. Something like this instead:

Brief desccriptions here <Beautiful bed 1.5 bath home with LOTS of new updates looking for someone to call it home!

HIGHLIGHTS:

Close to school! Excellent schools! Close to park! Etc., etc.

FEATURES:

 + Beautiful home with many new updates!

 + TWO Car garage AND two car parking pad

 + Washer & drier included!

 + Motion detector lighting at entrances!

 + Large basement for plenty of storage!

Etc.

QUALIFICATIONS:

Must earn 3 times the monthly rent

No prior evictions or criminal record

No smoking

No pets

Application fee is $25. We look forward to hearing from you!

http://www.tenantresourcecenter.org/esas: "Should I tell a prospective landlord about my ESA when I'm applying for a rental home? ... Here's a possible series of steps you might follow:

• Apply for housing, without mentioning your animal. (Laws do not require tenants to disclose ESAs or service animals when applying for housing).
• Once you have proof (preferably in writing) that you're accepted into the rental home (and not denied for other, legal, reasons), send the landlord a letter saying that you have an ESA, with your documentation.
• If, at that point, you are denied, you could take a number of steps: file a complaint with Fair Housing, file a complaint with your local government, write a letter asking for the reason for the denial (the landlord doesn't have to give you one, but it's helpful to understand their reasoning if they are willing to give you a reason for denial).
• Generally, it helps to tell the landlord that you have an ESA or service animal before you move in, so that if they have a legitimate reason to deny your ESA (listed above), then you can work out those reasons before you are relying on them to provide you with housing."

Way to go tenantresourcecenter...

Check this out: https://www.rentprep.com/property-management/landlord-guide-assistance-animals/

Regardless, I think one of the easiest ways to prevent the ESA lies is to just allow pets and have a very strong pet policy. I would start (and am going to) by:

• Updating application to ask: "How many animals will be living with you?"
• Request documentation of vaccine records to ensure the animal is vaccinated in accordance with state and local laws. They have to be vaccinated no matter what, and I think you can deny if they aren't (confirm with a lawyer or see bullet #5).
• If you can, request a letter from a professional that the animal is needed as an ESA. Unfortunately, people can literally buy these letters online (esadoctors.com is one...), but it's one extra hoop to go through.
• Have a very strong pet/animal policy for those that are honest about their pets and charge a good but fair amount for pet rent.
• http://fhco.org/index.php/information-for-housing-providers. Confirm any questions with them (and your lawyer, too) (Oregon: http://fhco.org/index.php/information-for-housing-providers)

The main point though is that by allowing pets you eliminate the need for people to lie about their pet being an ESA. If they can apply comfortably knowing that their pet will be allowed, then that gives you better ability to vet the animal without fear of fair housing violations. Then you can choose between applicants accordingly and pick whomever best qualifies. 

@Vincent Pelletier 

A few questions:

1. Does your rental strategy look similar to other rentals in your area? Are there a lot of other single family homes in your market that rent out bedrooms? Personally, I wouldn't want to be the only single family renting out bedrooms when everyone else is renting whole houses or units.
2. You say "renting main floor." If you advertise the whole floor and I was the renter, I'd expect to have that whole floor. If all I got was a bedroom, then other tenants/you were on that floor a lot, I'd feel mislead and probably look for a new place once my lease was up...
3. Does your "Mortage" cost include taxes and insurance? 

If the way you'd be renting this property out is similar to many other rentals in your area, then that looks like a good house hack to me, but it depends on your market and your goals. For a successful house hack I would look for two main things:

1. Are you going to be saving significant money by paying a lot less than you would in rent? (Put that into three categories of actually cash flowing, living for free, and living for cheap(er).)
   
   1. Don't forget to factor in expenses and vacancy.
2. Is there any value-add opportunity? This is harder with single families, but if it is currently rented, is it under market (I like under-rented properties), are there easy things you can do to add value (e.g., some landscaping, replacing old/ugly light fixtures).
   1. I wanted this to be true, because I want to sell for a large gain and get a tax exclusion. You might not want to deal with that though and only want cash flow. It depends on your goals (see below).
3. Are there multiple exit strategies? Could you sell this to an investor as a cash flowing rental, could you resell it as a single family home to a buyer?
   1. I wanted this to be true. I could sell my duplex as a rental to an investor or owner occupant, I could convert it into a zero lot line duplex and sell each half individually to separate buyers, I could hold it and cash flow a bit as my own investment...options are good :)

I have a house hack duplex that I live in half of and rent the other half. My principal, interest, and insurance are all covered by the rent in the other unit, I just pay the taxes. If I wanted to I could rent out one or two of the other bedrooms in my unit and have it ALL covered, or even cash flow a few hundred dollars. I don't want to do that though. I like having my own unit that is all mine and nobody else gets to intrude. My goal was to save a lot of money compared to what I would renting, build a lot of equity via principal pay down, and be able to add significant value. Also to have a nice place to live that is my own without roommates. I met all of those goals. If you define your own goals and then compare each property to your goals you might get a clearer picture. 

It would be great to cash flow, but my personal goals were listed above and I met them. I'd advise you do the same.

Let me know if you have any questions on that!

@Brandon V. Sorry dor the lack of paragraphs. For spme reason posting through the apl it removes all my line breaks and makes one giant paragraph :( I put a ticket in so hopefully it can be reaolved soon!

@Brandon V. You can take possession now. Rekey all the locks, and get a new garage door opener if they had one too. Any PIN pad locks (like for the garage or keybox) change the codes for. As far as deductions, make sure to deduct all the items done above. You can also deduct for unpaid rent for the month of October, but must make reasonable efforts to try to find a new tenant during that time. So if you found a new tenant the can move in next week, you only deduct for the vacancy period. As far as the disposition if deposit, make sure to request a forwarding address frpm the tenant. If you can't get one then send it to the last known address. If they paid the $1 fee for USPS Move it will get forwarded to their new address anyway. If you can't get a new tenant in, it sounds like the whole deposit is gone and you're out some money to rekey and turn over the unit (assuming they did some damage during this stressful time). Glad they got out! Best of luck finding a new tenant. Always confirm advice on BP with a lawyer, I am not a lawyer and this is not legal advice :)

This may be a silly question, but have you tried contacting the tenant in any other way? Texting, calling, stopping by the house? Explain the situation, and let them know that if you don't receive rent you will have to file for eviction, which you really, really don't want to do, for both of your sake. If you are going to stop by the house, go ahead and serve them notice personally and explain what it means.  You might as well record the conversation while you're at it, Wisconsin is a one-party consent state so you can legally do that.

If the next contact doesn't go well then I would go ahead and file for eviction and let them know it is being processed and will move forward unless they pay rent immediately. Also, it is up to you, but if the suggestion comes up, I wouldn't accept partial payment, even though it appears Wisconsin Statues appear to allow for this and still continue with eviction (Wis Statute Sec 799.40(1m) - https://docs.legis.wisconsin.gov/statutes/statutes/799/40/1m) (contact a lawyer, I am not a lawyer and none of this is legal advise). 

@Brian Eastman 

Thanks again for your excellent explanation of UDFI! I'm working the numbers right now and have a good understanding of your example. I am trying to determine if--from a tax perspective--it would potentially be better to have two properties at 50% and have that subject to UDFI (and potentially UBIT?), or buy one property cash within my SDIRA LLC and not have the UDFI--and if so, quantify how much better. I think it would be, but I have a couple questions below.

• I see you didn't mention UBIT at all in your example. In that example, does UBIT not apply? I can't find a good example of UBIT that doesn't assume one already knows what UBIT is (basically saying, person A has $1000 of UBIT income--okay, great, but what is an example of UBIT income?

• Does the UDFI tax get paid out of the IRA account, or do you pay that out of a personal account? Or is this a "it depends" sort of thing...?

• "You then reduce the gross taxable amount with...50% of normal deductions" -- If you leveraged at 75%, then all your deductions would be 25% of the normal deductions because that is your interest % in the asset?
• If you have a lot of deductions, can you deduct more than your taxable amount and pay no UDFI taxes at all? I'm translating your numbers into an deal I was looking at and trying to determine if I'm working it correctly. I've got a spreadsheet I could upload to google docs if you or anyone else is interested in looking at it (if not, no worries :)
• If you were to partner with your own IRA to purchase a property, say 50/50. It sounds like a headache I'd rather avoid, but I'm trying to understand all the options. I understand this ownership ratio can never change nor can you sell to disqualified persons, etc. All expenses must be paid proportionally out of the separate accounts, and you still cannot do work on the property. Regardless, if one were to do such a thing, would my personal 50% of cash flow be subject to any additional taxes? Would that be considered UBIT then?

No rush at all! I'm just working numbers and trying to make sure I am understanding this correctly :) I realize that UDFI isn't a huge amount, but when looking at actual cash flow after expenses, it can really make you take a big hit. When running numbers on a deal I saw cash flow go from $120 down to $20. Granted, I am probably not factoring in ALL the deductions I possibly could, but it's definitely something to be considered carefully.