All Forum Posts by: Mark Lucido

Something you may want to consider is how you will acquire your funding. My lender didn't like the idea of a series LLC but that was likely due to their misunderstanding of what exactly it was.

So I'm a Commercial Investor in the DFW area and the two deals I closed on allowed me a 70% LTV on a 5 year balloon with a 20 year amortization. My rates were 4.5% with a personal guarantee if this gives you any idea on the requirements. I know for fact I could have gotten a 7-year note with another lender but that's the max term you can expect. The lender is a local bank who is very conservative in their lending habits also. I had to go and meet with them personally for them to get a better understanding of who they were dealing with. The deals will vary though based on the size of the deal. If it's a multi-tenant retail over $750k, I had another lender lined up that would do a 20 year fixed with about 25% down.

I actually ran into a similiar situation with a tenant.  When he provided me his background information, before I ran it he explained there were some things on his record I would find and he wasn't proud of.  He further explained he was trying to improve his situation.  It turned out to be one of my best tenants - he pays 3-months in advance at a time.

So I'm actively going through this as a landlord right now with a new tenant who provided me fake SSN information.  I currently use TenantReports.com to process my background checks for my commercial rentals.  The tenant provided me his information along with the information of his partner whom I never met.  The partner is the primary on the lease since he has the good credit.  Everything went through fine - no red flags until today (18 days later) when the real person called me as she had her credit file flagged for fraud alert.  Fortunately they haven't moved in entirely yet and my lease allows an out if the credit report/background check comes back tainted.  Just need to find a way to break the news to these guys.  Lessons learned:

1.  Always get copies of DL

2.  Meet the person face to face who will be the primary on the lease

3.  You can talk to your background check company and ask if there's a fraud alert on the file

4.  Address information as another post commented should match up to the tenant's story (this tenant had both TX and IL residences - dates should match up too)

Hello everyone -

So I just wrapped up my first year as an investor and landlord (great experience so far) and I'm in a situation where I need to decide whether to take one of my tenants to small claims court or just eat the losses as a learning experience.

The property I acquired is a commercial  office/warehouse property with 8 units: two units are shared and there was 1 vacancy.  So I inherited 6 tenants total.  Two of the tenants have been consistently late in paying (my late fee revenue has been spectacular because of these two).  One of those moved out in the middle of the night and the vacancy was filled within a week with a tenant that now pays 3-months in advance every quarter. 

Here's where the story gets interesting:  The second delinquent tenant rented the shared unit from me and split the space with his attorney whom he ran a side business with.  They expanded into the vacancy and now occupied 3 units or 38% of my building.  For a full year, he consistently paid rent and late fees in full around day 45 so naturally I became lenient and tried to salvage the tenancy as best I could.  He and his attorney had a fall out and the attorney took over the single unit.  The 45-day delinquency pushed now to 60-days and his maintenance of the units began to slip when his AC overflow backed up and damaged drywall and carpet.  I wanted to avoid the drama of an eviction so I proposed a "negotiated" lease termination (he moves out and I would forgive the last months rent provided he pay the back rent for previous months).  After move out I assessed damages with my contractor at around $800-$1200 so at this point the tenant owes me anywhere between $2,500 - $4,800 dollars in back rent and damages.  I work full time in Healthcare IT (software Program Manager - very visible and demanding) so I'm trying to decide whether to pursue a small claims court filing or writing this off as a learning experience on how to deal with inheritied tenants.  How involved and costly is a small claims filing in Texas?

Hi Mark -

I'm in the North Dallas area and caps are in the 6% - 8% range right now regardless of retail or office. The cap rate is really a function of the property's profit and the risk involved. If a property is fully leased and there is sufficient NOI then you can expect a lower cap rate. On the other hand if the property is only 25% leased and is in need of repairs or in a questionable area of town than you can expect a higher cap rate to appeal to the investor's sense of risk.

Hi David -

I'm new to investing and I've owned a flex space in North Dallas for about a year now.  This was my first property and for the most part I love it.  What questions do you have?

Hello all -

I'm working on my 2015 taxes and trying to decide on the best way to handle my Home Office deduction. I understand that if you're in a situation where the deduction phases out due to high income that it may be more advantageous to reimburse yourself from your corporation/LLC and claim it on your company's taxes. How are other people handling their Home Office Expenses/Deductions?

Thanks

mark

Hello BP - I'm closing out my first year as a new Landlord and I'm working on my tax preparations using TurboTax - Business for my LLC. My question is how to claim my Property Tax on my rental property. It looks like there are 2 places to enter the property tax: a) Form 1065 Line 14 and b) Form 8825 Line 11. I'm assuming I should claim it on 8825 rather than on the 1065 since it was tax on the rental property itself as opposed to property tax on an office for my business. Are there any experts out there that can confirm?

Thanks