All Forum Posts by: Kathy Henley

Trust your property manager, they know things.

Hi Peter, The lease is the guiding document. When the lease is fulfilled, the security deposit will be returned to the LEASE SIGNERS, less any repair costs and unpaid charges. We ask, 'How do you want the refund split?' and follow their instructions. Both signers have to agree. The response might be, 'One check with both names,' or, 'Two checks split 50/50, mailed to separate addresses' or something similar. 

We do not use a savings account for e. lease. Perhaps, using the first name on the lease would reserve the funds for that lease. The liability is there - held in reserve until a certain lease is 'closed.'  Note: if roommates change during the tenancy, a lease addendum is signed and the security deposit is called out so that there will be no confusion in the future, 'The Landlord and the Tenant's agree that . . . '  This lease addendum may also guide your bank record when the funds are withdrawn later.

@Brian Rudd The visitors have no sense of responsibility. Cost of repairs need to go to the signer of the master lease. Figure out how to handle such issues as these, which we have faced in our furnished rentals: People pouring kitchen grease out the back door, attracting pests and mucking up the AC condenser. Spilling soup on the carpet too often. Smoking in unit, which the next visitor may think smells like home and partakes or, complains that the place is not as clean as promised. It was the carpet that had to go. Smoking in the basement, like it was a safe place. Running the AC so cold that the sweat on the air ducts dampened the wall -- locked thermostat installed. Bathroom floor wet too often, too long. Clogged drains. Having get-togethers and disturbing the neighbors. Parking in the alley, disturbing the neighbors. Pests -- trash cans need to be emptied regularly and washed occasionally. 

Consider the possibility of the local rules changing. If your place is re-classed as commercial, the property tax will go up. Who absorbs the expense increase?  

Ask your insurance broker about any additional insurance requirements.

Hey @Madison Balter

Your tenant may be in danger of loosing her housing voucher, if she owes a past LL for rent. Her case worker needs to know about these unpaid charges (there may be repair and cleaning charges at the time of move-out). In our area, the payment agreement saves the Tenant from loosing their voucher, as long as the payments are paid on time, as agreed.

Also, our state is still handling out tenant rental assistance with CaresAct funding. See if the program is your state still has money. If the tenant's application is approved, the past rent will be paid in full DIRECTLY TO YOU.

@Omar Ababneh This is a very broad question. Please do a little research to find PM's that will deal with the tenants in which you are serving. Is it college students, or families in SFHs, or two-income households with no kids? Are you investing in low-priced housing and have no plans to make them better?  Opportunities abound but you need the right team to make it a success.

Read reviews on yelp from the many renters in your area, of PM companies. Make a list and start calling the management companies yourself. You need to find one that has similar priorities as you. Ask for a reference from one or two of their current property owners. Call them and verify that they do well.

@Account Closed Phoenix, you chose the right market. Well done!

@Skyy Dugger All rental income goes into the kitty for operating the investment property. Please ask the Seller for a current income statement. This might be on the Schedule E of the Seller's 1040 tax filling for 2022 or, a printout from the listing platform (AirBnb and such.) If the Seller has neither, analyze the income with long term market rent rate, as the property might not be a STR at the moment.

One cannot express the monthly expenses as a percentage of the income until your have some numbers. Call the area utility companies and ask. How big will be the monthly loan payment? The interest is an expense. Call an insurance agent and get a policy quote. What about set-asides for capital repairs? What does the place need in the next few years?

We can invest in a bigger place when we find a good deal.

@Timothy Smith Renting two of the units as short term rentals increases the income, not the value. You will keep what is left, after paying the bills. It's a business.

You might capitalize the business 50/50. You might agree to split the sale of the asset 50 /50, when it sells in the future. The capitalization of the LLC will be memorialized in the company's operating agreement. Also iron out how decisions will be made, how cash draws will be made. Let a lawyer and CPA review the OA.

The operating cash flow might be split with different percentages, according to the management roles. Describe each partners roles and responsibilities during the life of the business. Who is going to clean the place and manage the bookings? Write it down. Who will respond to  the repair requests, renew the leases, market the property and cut the grass? Who does the bookkeeping? Write it down. This will become the management agreement of the company. When will the cashflow be disbursed? Agree to something. It can be amended anytime, if both partners agree.
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@Alvin Garcia  Make contact with property management companies in the area, the busy ones have the pulse of the market. Search for company names on Yelp or those with listings on Zillow rents. Ask who do they serve (they might have a niche) and how long is a listing on market before signing with a new tenant.

@Alvin Garcia

@William Baptist  Work two streams to wholesale deals. 1. Work a mail campaign with quarterly follow-up, to harvest leads that may turn into deals. 2. Keep adding buyers to your Buyer's Contact List. When you find a deal and have it under contract, work your buyer's list to sell the deal.

Of course drive the city streets. You need to know the value of the deals. The success of repeat customers relies on it (your deal flow.)

Work stream 1 if you are a buy and hold investor. Practice analyzing deals to understand the cost of ownership.