All Forum Posts by: Lucas Miles

Hello BP, looking for some guidance specifically to Minnesota landlord/tenant statutes. 

I have formed an LLC to be used as my property management company to manage the rentals I (well a different LLC that I control) owns.

How should I list the "person authorized to manage the premises" and the address. Can this be my LLC and the address be the address for the LLC (which would be the LLC's registered agent's address)? I'm trying to avoid putting my personal address here, but want to make sure I'm legal and avoid a $200 phone call to my lawyer. Thanks in advance.

According to MN Statutes 504B.181 Landlord or Agent Disclosure. 

Subdivision 1.Disclosure to tenant.

There shall be disclosed to the residential tenant either in the rental agreement or otherwise in writing prior to commencement of the tenancy the name and address of:

(1) the person authorized to manage the premises; and

(2) the landlord of the premises or an agent authorized by the landlord to accept service of process and receive and give receipt for notices and demands.

@AR Rodriguez another idea that I've had success with is Facebook Messenger. If you know the owners name try looking them up on Facebook and send them a message (depending on their settings they may or may not get a notification). Could also try looking up the owner's children and shoot them a Facebook Message.

Definitely not the most efficient route but I've had success with it. May be easier in small towns but could be worth a shot if nothing else is working!

@Benson Gee for finding tenants you post your rental listing on various listing sites: Zillow, Hotpads, Craigslist, Facebook, Apartments.com, etc. Then depending on how you have it setup tenants will either contact you or submit an application. Then on your application you can put criteria for them to list previous landlords.

@Benson Gee look through the current lease that the tenant is on. Once the lease expires, if the tenant would like to stay have them submit an application and perform a background check to make sure they meet your criteria. You'll need to establish what this criteria is. Generally: Income is 3X rent, no past evictions, minimum credit score, positive feedback from past landlords, no violent convictions, smoking/non smoking, pets/no pets etc. Then get the tenant on your lease with your own policies.

References for PM, see how many units they manage, how long they've been doing, do they own their own properties, etc. A tip is to call the PM and act as a prospective tenant, see how they handle this and how organized they are. This shows a lot for how effective the PM is. Find investors in the area your investing in and make some connections. 

@Mike Gel I've had the best luck working with local community banks for my lending. I've discussed with my lender about triggering the due on sale clause by transferring into my LLC. He said this wouldn't happen, pretty easy conversation to have. Developing a relationship with a local lender is huge. They known if they treat you right, you will bring them more properties to lend on.

As far as the personal guarantee on the loan, maybe a more experienced investor will correct me on this but I think its really difficult to build up enough "business credit" where you won't need this guarantee at least in the early stages. I think the separating your business from your personal is more important on managing your books, bank accounts, etc. Hope this helps. 

@Kweku Ocran I'm guessing that advice was related to how a good insurance policy should cover expenses that come from a potential lawsuit, and therefore an LLC is not needed. A correctly formed and operated LLC should provide 2 forms of protection:

1. Inside protection - If a tenant (I'm assuming we are talking Tenant to Landlord situation here) sues your LLC, your personal assets should be protected.

2. Outside protection - If you personally get sued (from a car accident or something) the assets in your LLC should be protected.

A good insurance policy should cover most situations regarding inside protection, but will not provide any outside protection. An insurance should cover you in most situations if you get sued by a Tenant, but who knows. Forming an LLC gives you an extra layer of protection.

It also comes down to your risk level and what you have to lose. If you buy a property for 100k with cash you could effectively lost 100k, vs if you purchase a property with a owner occupied 3.5% FHA loan (3.5% down payment) you have a lot less to lose, so maybe an LLC isn't worthwhile.

@Timothy Joseph as a fairly new investor myself I've also had similar thoughts. I decided to recruit my girlfriend to design a logo and business card for me! Pretty simple to make through excel and online websites. Still in the process of this, so we'll see how it goes. There has a been a few times now where I wished I had a business card to hand to someone. I came to the conclusion its more important to have something now, and then once I'm more established I can get a professional logo if I feel the need to.

@Tristan Osborne coming to BP is a great first start! Start with education (podcasts, reading the forums, real estate books, network with local investors etc). If you interested in long term holds, starting out with a house hack (buy a small multi unit, live in one, rent out the other(s)) is a great way to go! Helps you to learn how to be a great landlord, and saves money on your personal housing expenses. 

@Account Closed that's a great idea, I'll definitely look into those!

@Ray J. Thank you!

@Adam Luftig Absolutely, I'd love to connect to expand our networks!

@Matt Higgins Storm Lake is a nice town, was at a wedding down there this summer. Great idea with the renting to local farms, I know a couple operations that have a setup similar to that. Thanks for the idea!