All Forum Posts by: Kenny McCray

Welp... things didn’t work out with my previous property manager, who was working for me in-house.  That is the second one that didn’t work out.  I’ve invested in Buildium, got my leases and processes down, a file sharing system, google voice number, etc.  We have 15 doors total, 5 of which are under management and out of state.  So, all I need is a competent and dedicated person to handle the day-to-day management, right?  If only it was that easy. 

I’m thinking about posting an ad on Upwork and seeing if I can find someone to handle the repetitive computer and phone work tasks virtually.  Ideally someone in and around Tacoma, wa.  But, it’s easier said then done, there is the time it will take me to train on my system, effort spent finding and interviewing said person, and ultimately I may end up right where I am today; I have other big life projects (opening a restaurant on a 100’ boat called the Island Caper in Bellingham, wa) and not enough time in the day to manage the 10-units.  Six of these units are in Tacoma, 3 hours away, and they are the majority of the turnovers and work.  So, now I’m thinking of biting the bullet and paying a higher price / sacrificing cash flow to not have to deal with it all.

What are your thoughts?   Anyone out there have any recommendations?

You can prepare a quitclaim deed yourself, go down to the county office (or equivalent for DC) and file it yourself. Note that your bank likely will be able to "Call" the note for violating your loan agreement terms. It is highly unlikely that they will do this, however. I typically wait a year or so before doing the quitclaims, this may come up on the Bank's title insurance at a later date. You probably got what is called a "conforming loan" therefore the loan will be sold into the secondary market and will be subject to random audits, so there is some risk in doing this, but from my experience as a Bank Regulator, I have never seen or heard of a loan being called due to this. Usually as long as you make your payments you should be ok; but still, understand the risks. Alternatively, and in the meantime, you can operate as a joint venture, draft a JV agreement that states the LLC will operate the property in a joint venture with you and your partners. State that the LLC will have the rights to all future capital gains or losses associated with the property, and all capital entries will be tracked via the LLC. I am no real estate lawyer nor am I a CPA, but I am a former FDIC bank examiner and my Wife/investment partner is a real estate CPA. There are some legal risks no matter which way you turn, its the nature of these smaller deals where one person is carrying the paper for others. You want the good rates and financing, but also want to invest other's money, it does not conform if you tell the banker's your plan... The ultimate answer is to consult a good real estate lawyer once you have your documents drafted. You can agree to run all taxable income through the LLC, and your partners would technically have a legal right and claim to the property proceeds depending on how you structure the agreement/operating agreement. Would I call it a rock-solid way of guaranteeing everyone's claim on their investment?? Heck no, it is way better if everyone is on the deed or a member of the LLC which owns the property; but it is still one avenue you can take to get a decent legal structure in place for these smaller deals. It could get very messy fast if there was ever a major disagreement in the partnership, so understand that as well.