All Forum Posts by: Lynn Dee Murrow

Fun question:

I would look for a state with no income tax and if you are on bigger pockets you are probably interested in rental real estate so look at the landlord tenant laws too.

Then look at property tax rates and sales tax rates. If they do not have income tax these rates are usually higher to make up the difference and provide for needed infrastructure.

I think you have to consider your socio-political beliefs too when moving to a new area.

I would go to Texas. Not to the big cities- Houston-Dallas/Fort Worth/San Antonio or Austin. Instead I would look at the climates of North, South, East and West Texas and pick what you like best then look for cities in the Suburbs with a varied employment base. 

@April C. that program sounds like a Broker Dealer for syndicators if they are matching you up with syndicators. There is a fine line the SEC does not want crossed. Education and Mentoring and networking opportunities to meet people and learn is different than Education Marketing where the purpose is to give you some education but the end game is you invest with the presenter or owner of the business. It’s wild if you pay them to then invest with them. If someone says they are the “go between” or something like that they are raising money for syndicators and either being paid for raising money - check to see if they are a licensed broker dealer or just ask them - or they are part of the management of the syndication allowing them to raise money. I have seen people get in some significant problems with the FCC, FTC and SEC by doing this illegally. Often they have not taken the time to understand securities laws regarding syndications- pretty common for smaller syndicators of Multifamily. I emphasize this education because getting it wrong can ruin the lives of syndicators if not their investors.

Nothing wrong with being skeptical and taking the time to sort out what is going on before committing to anything.

Hope this helps!

@Jim K LOL well the name was selected over 30 years ago and can leave the wrong impression unfortunately. I did not give more details because I do not want to sound like, or actually, sell or “pitch” here on bigger pockets because that is not what this platform should be used for. Our education is comprehensive, very detailed, and constantly updated. We have done nearly 100 hours just about operations during COVID. Most members come out of the weekend class ready to buy rentals successfully. A few who want additional help and education go to the mentoring programs but most just go buy a rental and continue to attend meeting and webinars to spend time with other investors and continue to learn.

You can evict for reasons other than non payment of rent under the CARES Act so check if your local courts are open and taking these eviction cases. Consider a motion sensor light on the side of the house. So wherever he goes at night it is well lit “for his safety”. Camera is a good idea to confirm dealing and file eviction. Even if Marijuana is legal your lease does not allow smoking of any kind because of the cost to get the smell out of the paint and carpet etc.

Be sure to research the advice you are getting before taking action. In this unique and ever changing environment the regular rules do not apply. 
1. Do you have a loan on the property and if so is it federally backed? If you do not know call your serviced - the company you pay your mortgage to - and ask them.

2. If you do NOT have a federally backed loan you need to focus on your city and state regulations about evictions. New York is not Owner friendly so my guess is you will be under various restrictions which may increase the notice required or prevent evictions. If you can evict do it immediately. Go to the local court website and follow their rules to the letter. You may have to prove you do not have a federally backed loan.

If you DO have a federally backed loan you CAN NOT give notice until July 26th under the CARES Act (moratorium on asking tenants to leave ends at midnight on July 25th I think. On 26th you must give a 30 day notice no matter what you lease says.

Unfortunately, it is likely the Moratorium will be extended this week in the new relief bill. My guess is it will be 120 days but might be to the end of the year or even into next year. We will know by the end of this month. You still must consider local and state regulations in addition to cares act restrictions.

Under the CARES Act you cannot report him to a credit agency for rent not paid during COVID-19. You also cannot charge late fees. Don’t take a chance of a judge making an example of you.

3. If you are struggling to pay the mortgage look into forbearance. Call your servicer for information and read every word of the agreement before signing. Be careful of offers to “modify” your loan, this could affect you negatively on future loans. Ask what the consequences will be in future lending decisions.

4. Talk to your resident about:

Unemployment- have they filed? Almost everyone, even independent contractors are eligible. If it has been hard or frustrating so he has not done it encourage him to try again. Claims are going down so easier to get through. Benefits are retroactive. Also they are likely to be extended by Congress. 

Car payments can be deferred and sometimes partially forgiven. He should contact the number in his monthly statement and check.

Utilities can be deferred or forgiven he should call each utility including phone and cable.

Student loans - if he has any he should stop automatic payments because no payments are due until the state of emergency is lifted. He does not have to do anything to get this benefit it is automatic.

Local rental assistance programs - look to see if there are any and help him apply. Be careful that accepting these funds does not commit you to longer eviction moratoriums. Some programs come with strings.
If there are job services or listings available in the area provide those too.

Finally, you mentioned his girlfriend. Is she living there too? If so is she on the lease? If not I would ask to put her on the lease and run a background and credit check and follow your typical process to get her on the lease. 

Sorry for the long post, hope it helps!

Lifestyles Unlimited is an education and mentoring company. It is not a multilevel marketing company. Lifestyles Unlimited teaches a very specific investment model, and has no investment or other interest in any investment members make. There are a lot of events where members can meet and get to know each other while learning - in person and online - and after 30 years in business there is a large community of investors from across the US and several other countries surrounding Lifestyles Unlimited. I have made great friends at Lifestyles Unlimited. For full disclosure, I am the EVP of Lifestyles Unlimited and a long time member.

You also need to consider all the costs involved with this business model. You pay all the utilities; you need a full unit of furniture and decor; you need plates, utensils, pots and pans, glasses and cups, coffee maker, toaster and basic cooking supplies; you need linens and towels, soaps and shampoo and conditioner and blow dryers and basic bathroom supplies; you need laundry soap and supplies; and you have the cost of cleaning on the turn (usually charged to the guest but you still have to manage it). The biggest issue is your other tenants will probably not enjoy having strangers coming and going, it makes your other units less desirable. Make sure you check state and local laws. Some areas require the payment of a hotel tax for all short term stay nights, which is not just the money but the paperwork. You will need to be much more active and responsive in this business as well so its important you are looking at all the costs to see if the difference in income is worth the effort. Then, as you mention, you have to determine demand and estimate how many nights you can realistically fill the unit. If AirBNB realizes you have a bogus unit up for testing the market there may be consequences as well. If guests realize it and leave you a bad review that will hurt your earnings as well. Not trying to be a Debbie downer, I just see people jump into this business model without realizing how expensive it is to set up and maintain everything needed for short term rentals.

In my experience the no money down deals are distressed properties needing a lot of rehab. You will get a hard money loan that will cover the cost of the property and all of the rehab if the ARV (After Repaired Value) is high enough that this totals 70% of the ARV or less. Then, after the rehab is complete you will sell the property (paying full taxes on the profit) or refinance it and hold it as a cash flowing rental property (providing lots of tax breaks to offset your income). Hope this helps!

Most of the important things have been covered here and I will echo the importance of having a syndication attorney. A fund falls under different rules than the "typical" apartment community syndication and you need assistance from an attorney who has experience with funds. I am NOT an attorney but I can provide an example to illustrate the kinds of details we are all talking about, and there are literals thousands of these details in the syndication or real estate fund or REIT business. For example, a syndicator can accept IRA funds without much concern regarding the % of IRA money in the deal because the kinds of syndications we are talking about are exempt from the rules that would govern the same % of IRA funds in a Fund. If you are a new syndicator you will probably have difficulty raising money for a blind offering, so you will want to do an offering for a specific property and get a track record before trying to get investors to invest in a fund without knowing exactly what properties you may invest in. This is achievable for you, its worth the time to acquire the knowledge first so you can execute a solid plan. Hope this helps!

Just let them know in a "hey, by the way, our lease does not end until March 10th." They may decide to use that extra time, and you can even suggest some overlap in a move is helpful. If that does not work I agree with others here that it is not worth trying to enforce. get right on your make ready and get the property listed and sold! Good luck! Lynn