All Forum Posts by: John Teachout

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

Title work is typically done as part of the pre-closing paperwork. It's not normal to do it prior to an accepted offer. You would expect a clean title at close so if there is some issue, then either it would be resolved by the seller or the deal would fall through. That's a pretty low offer you're considering. Maybe go prepared with a spreadsheet of fix up costs prior to just hitting her up with that. As far as the sale of a property with a mortgage on it, that all gets sorted out at close. ie, you bring your money, the bank gets what they have coming, the realtor gets what they have coming (if there's one involved) and the seller gets the rest. (minus whatever closing costs they're paying)

Florida's treatment of security deposits varies from many states in that it is required that a security deposit be kept in its own account in a Florida bank. The account does not have to be an interest bearing account but if it is, then a portion of that interest earned has to be returned to the tenant annually. (this is how it was 3 years ago when we had Florida property). So, based on that, you need to keep the security deposits separate from your own funds and also from each other. It's possible the laws have recently changed so reference the Florida landlord/tenant handbook. There's also disclosures in there that have to be included in your lease paperwork. Get it right. Avoid future trouble.

An LLC does not impact taxes for rental real estate. I can hardly believe an accountant would say such a thing unless there are pieces of the story that aren't in the post.

I would not install a 240V outlet for an electric dryer because of a tenant request if there is already a gas hook up for a dryer. Some people prefer an electric dryer over gas and in some of our properties we have both gas and electric hook ups for dryers so they can have their choice. A factor is whether the panel and electrical can handle the additional load. Many houses that have gas only have 100 amp service vs the 200 amp that is typical of all electric homes. They can get a gas dryer and then have means to dry their clothes. Adding this circuit in would likely be quite expensive depending on access between the laundry area and the panel. I'm assuming the property has a gas range. What if they want an electric one?

I always used the 1% rule as a useful metric when we were purchasing our SFR portfolio. We were pursuing cash flow, not equity growth. If a property didn't have the potential to cash flow, we weren't interested in it. All it was used for was as a screen to determine whether a property was worth further consideration. For others to decide to not use it, that's fine but it's foolish to say it has no value as many thousands of investors utilize it all the time. That's like people saying buying SFR is dumb and one should only invest in multi-family. Everyone can invest in real estate in their own style and be successful at it.

Fund II is still limping along but based on a recent update, I have no hope for its future. In addition to the issues with debt costs, the properties don't seem to be functioning in a manner that will lead to profitability or even break even. We're expecting to be wiped out on our position in fund 2.

Many syndicators and fund sponsors are still touting how well all their previous exits have done, so kicking the can down the road as long as possible will maintain that status even though there are many deals at risk. We're not in fund 1 but are in fund 2 and it's very likely we'll see a capital call for that fund as well. Our minds are already made up to not participate as I've no confidence that it would actually keep "us" from suffering a complete loss of capital. Meanwhile we continue to receive offers from Ashcroft about new offerings. I'm deleting those as they come in.

What exactly do you mean by "undoing a 1031"? Just selling the 2nd property rather than doing an additional 1031 into something else?