All Forum Posts by: Mark F.

Quote from @Mike Adams:

Quote from @Mark F.:

 Since NJ is automatic renewal State; what advantage do you have from a M2M over annual? You cannot just throw them out on a M2M lease.

 If you lock in a tenant in a year lease, you must wait until the lease is up to raise rents or literally do anything. Like changing their lease or adding rules they could be violating such as pets or behavior. If you buy a place with m2m tenants (I've found most NJ tenants are on m2m leases with old landlords) or set your tenants up that way, you are able to raise rents before that time period. In my experience, this entices tenants to leave sooner.

I don't see one advantage to doing a yearly lease. What if the tenant sucks? You're stuck for the year. At least with m2m I can have conversations about raising rents within 60 days. Again, my big thing is I don't want any tenants living in a unit where they don't want to be there.

Quote from @James McGovern:

Should I offer discounts to members of Law Enforcement to lease with me? Feels like having law enforcement in the building could prevent many problems. Are you offering any discounts to members of law enforcement?

I'm in LE and a landlord and no, you shouldn't. Large apartment complexes sometimes offer a discount to cops who live there and have jurisdiction in that complex. These discounts or even free rent, come with some stipulations. They are responsible for service calls within the complex or are to be notified when a call comes in, like a point of contact. Sometimes they have to lock up communal spaces or required to do rounds of the property. They usually must have a take home car and it must be visible in the complex. If a noise complaint or something similar came in, the office who lives there was usually the one to handle it or at least the first one the cops would call. Think of it as a first line of defense for low hanging fruit. Obviously they wouldn't be handling domestic or dead body calls. Other than notifying management.

I assume your outfit is not big enough for this benefit. If it is, you can talk to large PM companies to get a template. You would then call the local PD to see if they'd advertise it to their cops. We had it at my old department and it was a coveted perk that I never got to take advantage of.

If you're a smaller mom and pop, you have some expectation this person would advertise they are a cop such as a take home car, walking around in uniform, etc. Not all departments offer take home cars. Cops worth their salt don't want attention as they won't want to be bothered off duty. They won't get involved unless some sort of threat of life and other times, they are told to call 911 and make a great witness. I don't think there's a big of benefit as you expect and I don't recommend investing in areas where you need LE presence.

Plus there's lots of cops who dont live in the jurisdiction they work, which may mean they have zero authority where they live unless, again, there's a major event involving loss of life or a threat to the public.

And like Russel said, there's always sh*t head cops who could be worse than attorney tenants.

I'm not I'm CT but your neighbor a bit south in NJ. The "clever" ways I've learned is to know the LL/tenant laws inside and out, screen tenants heavily, be diligent on 6 month unit inspections, and the biggest one IMO, I do M2M leases.

Knowing the confusing LL/ tenant laws and reading the guide my state puts out allows me to try not to get myself into bad situations. My realtor and I screen tenants really well as I'd rather take a vacancy for a few weeks than get desperate and let someone who will be a crap tenant into my unit. Diligent on 6 month inspections gives me an idea on how they're going to be as tenants when I do that first one, and allows me to nip any issues in the bud (or is it butt?).

The last one, month to month leases, some people disagree on. For us in tenant friendly states, I like them as they enable me to be nimble. If a tenant wants out, I don't want to stop them. Why would I want someone in a unit they don't want to be in? Conversely, if there's an issue, I may be able to use legal ways to entice them to leave, mainly rent increases.

Last thing is verbal judo. Seriously, talk to your tenants like human beings. You'd be surprised what they are willing to do when you see how you can accomplish a win win instead of this mentality a lot of LLs have which is "its my property, I own it, get the hell out". Are they right? Sure but there's a lot of old sayings about getting people to do stuff thinking it's their decision and not yours.

Don't listen to those who don't or haven't invested in tenant friendly states. They just want to take the easy road ;)

Oak Harbor Capital is the parent company of the lender name I can't remember, but it started with a C and had a funny name, and they were formed in 2022 or 2021. Apparently they (Oak Harbor or the subsidiary) had multiple SEC violations and changed their name but this wasn't discovered by the lawyers until last month.

Apparently AHP requested a mutual accounting firm audit their books as there's a dispute on AHP overpaying their loan. The lender didn't agree so AHP said they can hire a neutral accounting firm and AHP would pay for it and the lender has gone dark. My opinion- this lender owned by Oak Harbor is insanely shady and going to duck opening their books. Not only do they have about 3 mill of AHP Capital, they have about 10 mill in collateral of AHP assets (mortgage note collateral files) stored at a bank which obviously they won't hand over.

https://oakharborcapital.com/

Quote from @Christopher Morris:

Quote from @Ryan Muska:

Quote from @Christopher Morris:

Quote from @Jake Handler:

Why not explore the new 5% down conventional allowance if your situation allows?

Yes, I will be exploring that. But from my understanding, the 5% conventional is still an owner occupied loan. Which means I can't have the FHA and 5% conventional at the same time. Is that your understanding of the new rule?

This is not the case. You can have an FHA loan on the home you are leaving and still get a conventional primary mortgage on the new home.

So you are saying I can have an FHA and 5% conventional at the same time? 

I was under the impression if I went the conventional route I’d need at least 25% equity in the property since it’ll be considered an investment property. FYI, these are duplex properties. 

I'm doing this exact scenario right now. I am sitting in my duplex house hack that I bought with 3.5% FHA down. I am under contract now for another multi on the 5% conventional product as I didn't have enough VA entitlement. It's doable. Don't call me though I'm not a lender. I have a unique situation so there was no issue with the underwriter. Good luck.

Quote from @Account Closed:

Quote from @Matt Hofer:

The main reason is I would like to use business credit to cover the down payment & closing costs. 
Next I’ve heard enough horror tenant stories to think anonymity would be beneficial. 
And I’ve seen Pace’s content endorsed by bigger pockets so thought his methods are credible. 
Definitely open to other perspectives. 
Thanks

Well partner, there's a new law in town. All LLC s become transparent as of Jan 1 2024. 

Who does the Corporate Transparency Act affect?

https://tax.thomsonreuters.com/blog/are-you-ready-the-corpor...

"According to a recent Small Business Administration report, 27,104,006 small businesses were termed “nonemployer firms” and had no employees. The Corporate Transparency Act is designed to improve business activity transparency through the reporting of Beneficial Ownership Information (BOI) and is particularly targeted to these smaller businesses."

He really should keep up with the law. How many people are getting bad information?

While I completely agree, an LLC is overkill/useless for a house hack, that Act will not be disclosing info to the public. It's for law enforcement purposes only and controlled by FINCEN. We will have to see if any case law which comes out that could challenge the anonymous issue if an attorney request the information but I seriously doubt the government will aquest to such demand. Again I know this is basic level but going around saying LLCs now lack anonymity strictly because of this is a bit click baity.

If you are buying notes in your SDIRA, I do NOT recommend DirectedIRA. The amount of headaches they put me through when I purchased one was a nightmare. And they still bug me about wanting to see a payment breakdown every month no matter the amount.

Can't wait till that note pays off and I just use them as an intermediary. Checkbook LLC for the win.  

Quote from @James Wise:

Quote from @Mike Mullen:

Hi!

 I see a ton of folks from New Jersey investing out of state. NJ is BRUTAL for landlords.

Certain counties (ie the blue ones like Hudson and Essex like where the OP is located) are brutal which are the ones you hear more about as theyre more populated. Your more purple/red counties are way more reasonable and the ones I invest in. Judges are not as tenant friendly and you can expect a normal eviction time frame. The state tenant/landlord laws, while not as favorable as a Texas/Florida etc state, are not as bad as people make it out to be. I've read California's (specifically LA) when I almost moved there and those are brutal any way you slice it.

OP, NJ can be a great place to invest. But make sure you consume a good amount of NJ specific info as well as your normal RE info. We may habe high property taxes but our rents are high with increases quite common, and insanely low vacancy rates. Good luck.

Quote from @Hector Serna:

Quote from @Max Feinberg:

@Hector Serna sounds like some of these things could be resolved/noticed before actually getting under contract

 Looking for advice

Thank you though 

 While he may have been brief in his response, you missed his point which is actually excellent advice. Chances are you could have caught a few of those items before you went UC, if not all of them. Now that those things have happened to you, when you are walking properties you should go see if those issues are present on future deals.

For example, I got burned on a retaining wall issue. Do you think I now walk any property I check out to see the status of any retaining walls, no matter how well hidden or out of sight they are? You betcha.

From now on, you should be looking in crawlspaces as much as possible, checking tax records for lot sizes and zoning, and if its a short sale or even a vacant home, you're speaking to the realtor and seller about turning on utilities before an offer is made.

Again, these are experiences that you can either learn from and try to mitigate in the future or choose to ignore and get butt hurt when problems come up you didn't forsee. This will dictate your path in REI.

Great title and solid post. What was your initial gut feeling about, why you didn't want to rent to them when they signed a lease? Very curious to hear. And as usual, your gut is more often than not, correct.