All Forum Posts by: Kelly Byrd

Thanks all for the various approaches and advice. We've got a few ideas to chase down now. I think we're going to find someone to review a deal once we have an accepted offer.

Quote from @Marcus Auerbach:

Why?? That makes no sense, neither financially (because even in CA the seller almost always pays for the buyer's agent) 

Being blunt, I think you're simplifying too much both about "seller pays" and attorney skill

Regarding seller pays:
A reasonable seller is looking at their net proceeds. As a I buyer I know that. So me offering $1M (this is CA after all) and asking the seller to cover 3% buyers agent fees is not as strong an offer as a $1M offer with and no agents fees in the offer. That matters. If I can cover my end of the transaction with a flat fee by trading off my own time and effort, I can make a cleaner offer with more money net to the seller and they're more likely to accept.

I agree that buyer's agents have value in most situations. In my particular situation (both the specific market I'm in and what I'm looking for) I believe my highest chance of success is cold outreach and social networking locally, then making offers to off market properties. I may be wrong about that, we'll see. If I am, I'll adjust the plan, hire an agent and pay that agent accordingly.

Re: attorney skill in transactions. Not all attorneys are the same. Why would I hire "the average attorney"? My post specifically mentioned "real estate attorney". From my brief looking around after my first post, some practices have folks that specialize in real estate transactions. I haven't gotten one on the phone yet, but I'm going to ask them about their previous work to get a sense for their experience with these.

The reason I posted is I'm looking for flat fee options as a buyer. It's not that I don't value what buyer's agents do, it's that I in my exact situation, I expect to find the deal and do all the negotiation myself, I feel like the amount of work I'm asking for is fixed and I'm willing to pay based on that. If I need to make multiple offers, or have things fall thru that's on me to sort out. As others have suggested, a fixed fee agent or broker would work in this situation too.

Interesting idea, thanks! You're describing exactly what we're imagining, we find the deal, do the negotiations, just need someone to use the right forms, look at the disclosures with us, and coordinate with title company (or we can do most of that too) and see the whole thing thru in case there's a problem. 

 
Open to recommendations of flat-fee brokers that would do this. I'll also start looking around locally.

Thanks for the reply. Ya, I'm expecting to get more of a flat fee kind of quote from a lawyer once describe the work I'm looking for, which would be at most a few offers, then following through on a single property thru closing. 

For the sale prices we're thinking, something like $3k would be great compared to an agent.

Also, just to be clear, I do think buyer's agents are useful, we've used them before and may again. We just believe that in our current situation, the way we're going to find a place is off market and word-of-mouth, networking, etc.

This is about a personal residential property purchase, not an investment, but I thought this group would be the best source of info.

My wife and I recently relocated from the SF Bay Area, CA and are looking at a residential properties for ourselves. We're looking in a sort of rural part of North Santa Barbara County and the believe the way we're going to find the place we want is by networking locally and making offers to an existing owners off market. We're willing to wait and do the legwork for the right place. We're experienced SFH buyers.

I have heard of folks using a real estate attorney to represent them as buyers, can someone explain more about how that process works, ideally with specifics for California if that makes any difference. We're hoping to be able save on agent fees and therefore make a stronger offer. Does the real estate attorney handle submitting the offer and manages the process during escrow, including coordinating with a title company?  

Does it matter if the attorney is in the same county? I assume they would need to be licensed in California.  

I would love referrals to actual people and firms, or recommendations for questions to ask when interviewing different folks. 

There are two things here, IMO:
* Where should the LLC "live"?
Every state is different, has different rules, etc. I'm not enough of an expert here to give you advice. But! I did find that most folks I dealt with (lender, insurance, etc) in South Dakota (where the properties were) expected that we were a South Dakota entity. We were doing commercial loans with local banks and I got the impression the banks may not have been happy to deal with a non-South Dakota LLC. I'm not sure of this, it is just an impression from my situation where lender, insurance, and other services where all from local companies. 

* What is your tax liability in California?
My personal interpretation of the CA rules based on the advice I got was that I was liable for this $800/yr minimum tax.  I know there are mechanisms for hiding or avoiding this, but I chose to not go this route and just put the $800/year per entity into my budget. This is very much an individual decision about risk vs complexity of the entity. There is no single right answer for all people here. 

Originally posted by @Keith Knobloch:

I would encourage you to reach out to Eric Kerkvliet.

He is on Bigger Pockets:
https://www.biggerpockets.com/users/EricK197

Did you discuss the payment process as part of signing the lease? 

In the future, decide on one (or maybe a few, your choice but don't make it too many) payment options. Write those down in a "new tenant guide" or maybe in the lease. Make sure the prospective tenant understands and agrees to use one of those and it is written down. Then be strict about it. Train your tenants how to treat you.

As for what to do now, do two things:

1) Get the now past due payment however you can. If it's beyond 5-days, serve the 3-day notice to start the eviction process. You don't have to evict, but starting the process starts the clock so you can if the tenant doesn't cooperate. 

2) Figure out how you're going to get paid in the future. Pick one method, get the tenant to agree, get it in writing. Hold them to that. You could run a trial of the system before rent is due. Have the tenant pay you online something like $5 then hand them a $5 bill just to prove they can make it work without the pressure of overdue rent. 

In general it is the tenant's responsibility to get you payment, but it is your responsibility to be clear with your expectations, since you weren't clear from the beginning, I would give them a bit of a pass, but you need to be clear from now on.

Originally posted by :

I would start and complete the eviction process. It is fairly inexpensive to file and have a process server give them notice. That avoids a situation where the tenant claims they didn't receive notice. 

I can tell you from experience that once a tenant goes dark and is unresponsive, it is all down hill. Most likely once they are served notice to quit, they will just leave on their own. 

+1 to this advice here. You tried to engage and be nice, I probably would have done the same. But that didn't work in this case.

Getting the 3-day notice served isn't that expensive work with a law firm that has done this before.  If you end up having to go to court, costs go up, but it may not come to that. In my limited experience, the most expensive part of an eviction is the lack of rent until I get another tenant in the unit.

My wife and I have done a couple of deals Michael Martin at NAI and have worked with Aaron Rietsema at Hegg. We'll definitely work with them again.