All Forum Posts by: John Teachout

Not sure that would be of any benefit since it would still be a "failed deal". That's what I think they are desperately trying to avoid because it will stain their amazing performance record. I saw the ads for the notes they're selling and thinking that someone is likely to get burned on those too. They're apparently pulling every lever and turning every dial but forestalling the inevitable will be their only possible outcome.

A cash call can't save AVAF2, however, it can kick the can down the road so they won't be forced to "exit" at a loss. Many of the syndicators that are in trouble with current projects are delaying exiting so they can advertise and tout their excellent results from every property they exited. I suspect there's going to be little participation in the fund regarding the cash call and thus Ashcroft will be forced to exit. Most likely however, they will sell a property at a significant loss and use the cash to float the fund for longer. But wait, I don't see how they will even net enough to satisfy the loan so that's not a viable option. There's no possibility in my estimation that this fund will not lose 100% of our investment.

Well, it's coming. Ashcroft sent out an email advising about a capital call of 19%. They haven't made the capital call yet, just that they plan to in March that will be due in April. Anyone who participates in this is just throwing good money after bad in my opinion because I don't see a path to profitability in the future. The properties have not only suffered from the interest rate issues but have been operating at a sub standard level. They were supposed to achieve a 1.0 DSCR by the end of 2024 but are only at .84. They're still losing over a half million dollars per month. The tail has been shot off this aircraft, it just hasn't hit the ground yet. When they reach out to me regarding this, my response will be umm, no!!! (pound sand)

I've lived on rental cash flow for a number of years. We do all phases of the operation through. buy, rehab, rent, repairs, bookkeeping, tax preparation, etc. This is on an SFR portfolio of 8 to 15 properties. All paid for. It's our full time job. ie, no W2. So it can be done. From my observation, if you don't manage your own properties, there's little to no profit. (of course there's exceptions, somewhere, but none I've seen). We're currently selling off our portfolio one house at t time as they go vacant.

We have always kept inherited tenants, gradually brought up the rent. (they're almost always under market). Some we have years later, some left and some got evicted. The spread between what they're paying and what the market rate indicates is not that much. I would certainly keep that tenant. Once you close and establish a relationship with them, I would notify them of a rent increase but we do small ones. Maybe $30 and then with that increase you could do another $30 six months later. eg, If I took possession today (Jan 1st) I'd inform them the rent was going to go up $30 on the 1st of April and then again on the 1st of October. This gives them plenty of time to search the market. Normally, we don't make rent increases that soon as we want a chance to see how their payment record is. Another thing we do is check to see what items need to be addressed. Fixing a leaky toilet, replacing a broken light fixture, etc. can create good will.

The answer is maybe. Heloc interest deductibility depends on how the funds were used. You would probably get a variety of answers even from tax professionals.

Another consideration which applies only to electric is access to the load center. If it's in a shared space like a basement that's one thing but if it's in an occupied unit, that is something that may not be allowed in your jurisdiction. Unit 3 trips a breaker and wants to reset it but the breaker box is in unit 1 and they're on vacation...

If it's going to continue to be a 3 unit building, it would make sense to add another service. It will be expensive as you'll need a meter socket, weatherhead, breaker box/load center in the unit and then all the circuits in unit three will need to be disconnected from the present box they go to and brought into the new load center. Expect to spend several thousand. That said, utilities that aren't directly attributed to a unit can be a pain in the neck because everyone is sure that the other unit(s) are using more power than they are. What about other utilities such as water/gas/propane, etc?

Usually on a turnover we wind up repainting. It's just one reason why turnovers are expensive. We're doing a property now that the tenants were in about 5 years. All together there's probably 200 nail and tack holes in the walls. This is the livingroom wall. It had dozens of little dents in it like someone was throwing/shooting something at the wall.

This is from the State of Florida's website and here's the answer to the op's question.

Title VI CIVIL PRACTICE AND PROCEDURE Chapter 83 LANDLORD AND TENANT View Entire Chapter 83.49 Deposit money or advance rent; duty of landlord and tenant.—(1) Whenever money is deposited or advanced by a tenant on a rental agreement as security for performance of the rental agreement or as advance rent for other than the next immediate rental period, the landlord or the landlord’s agent shall either:(a) Hold the total amount of such money in a separate non-interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord;(b) Hold the total amount of such money in a separate interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants, in which case the tenant shall receive and collect interest in an amount of at least 75 percent of the annualized average interest rate payable on such account or interest at the rate of 5 percent per year, simple interest, whichever the landlord elects. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord; or