All Forum Posts by: Marc Winter

@Jim Smit,

Yes, converting/repurposing a room has been done many times.  

Is it worth it?  That depends on what you hope to accomplish.  Will you be renting by the room, as in co-living (roomies), or looking for a larger family to rent?

It's a worthwhile move if you plan to rent by bedrooms; if not, I don't see the benefit.

Let us know what you decide and how you make out with this idea.

FOMO.  Not a good thing.  

Take your time, little by little, bit by bit, little bit by little bit.  The land is not going anywhere, and there are always opportunities.

Enthusiasm is a good thing.  Keep the positive attitude, just slow down the execution until you actually have a few deals under your belt.

After that--rinse and repeat!

Good luck!

@Nicole He,

Does the father qualify on his own?  

If yes, think about terminating the existing lease, with written acceptance of the 'agreement of termination of lease', to be signed and notarized, by both father and daughter.

Then, create a new lease with only the father on it.  

(Deposits should be addressed in the 'acceptance of termination' agreement.) 

If the father does not qualify on his own, do not proceed past the termination of the lease, unless you want to take a flying leap of faith with the solo father. 

Remember: carefully craft the agreement of termination, and have both tenants sign with a notary.

This is not legal advice; I write this from my own  experience.  

"Next!"

@Phoenix Brooks,

What are your written criteria for acceptance? Minimum credit score?

There are two red flags here: poor credit, late payments, oh, make that three flags--no employment.

Most of the applicants who state they will pay for a year up-front, well, they just don't pass the sniff test.  Ever watch the movie "Pacific Heights"?

I'd pass.

After reading the above comment and your explanation, in a word: NEXT.

Why try to catch a falling knife--if you can't get real equity when all is said and done, just pass and go on to the next deal.

Good luck.

Flood insurance will be covered by your own insurance company with a rider or a separate flood policy. Or check with FEMA for guidance.

For sewer, check with your water company; here in PA we buy sewer line protection from a provider that works with the water company.

We are also insured for water line issues through the same sewer line issuer (above).  

We recommend this coverage to all our management clients--it has saved them $THOUSANDs$ in repairs.

Tenants break leases.  Life is tough.  It's just a fact.

Do you think, if it came down to court, that the Judge would grant you a judgment for the remainder of the lease?  Doubtful.

Have a sit-down with the tenant, and calmly, professionally discuss the situation.  On a friendly, personal level, let them know the situation they are putting you in, and try to work out something amenable. 

Ultimately, we, as landlords, bear the burden; we have more to lose than the average tenant.  Keep a positive attitude, don't overthink it, and look at the bigger picture.  Keep moving forward!

For liability issues, a multi-partnership LLC is good. (Not so much for a solo/individual LLC). If you have many properties, consider having several LLCs.

An alternative plan:  I've been using trusts (inter-vivos, revocable land-holding trust) for decades.  when you pair that with a good umbrella policy, you can keep the target off your back (don't name the trust in your own name, duh). 

You will sleep well knowing the umbrella will mostly cover any lawsuits.  Put each property in it's own, separate trust.  Trusts are basically transparent for IRS purposes, so everything will flow through to you (trustee and/or beneficiaries).

Once you have the trust template, it's just cut and paste--your only costs are recording fees.  

Plus, no due-on-sale worries if you are using the trust for estate planning purposes, which we all are, of course.

My 'avoid liability issues rule':  don't do stupid stuff!  Follow the l/t and other laws to the letter.  Treat everyone courteously and fairly.  

Now don't worry--go get more properties!  

@Alex Quinlan, you are already heading in the right direction! So, congratulations!

1. Live-in renovations are a bear.  If there are even minor cracks in your relationship with your girlfriend, try living surrounded by building supplies, buckets, tools, dust, and inconvenience, and those cracks can break open!  It's a great experience to do a live-in reno once so you'll know you won't want a 'next time'.

2.  I'd go for a duplex to start.  Have a stable home base, and work on the other side as needed.  Also, you'll need the tax breaks owning a rental will bring, as opposed to living in a single family.

3.  At the starting phase, always be saving for the next deal.  Once the ball is rolling, you'll learn to move the money around, because keeping it in a savings account will cost you about 10% reduction in buying power every year.  You'll learn to leverage borrowed funds and keep your money moving.  You can earn about 4.25% in SGOV etf that I've found to be very liquid.

4.  Working in Real estate:  Yes!  The experience and 'inside' knowledge you'll get can supercharge your success in this business.

Let us know about your progress!  

Good Luck!