All Forum Posts by: Matthew Dennehy

Welcome. Do you know what size properties you’re going to start with and what areas you will be looking in?

This is definitely one of those cases where you want to follow your attorney’s advice. Let him draft any response, concession or addendum.

My own thoughts are that this doesn’t seem like a significant enough issue to constitute a breach of habitability. Consider giving a concession to all three of them for the entire prorated amount of rent for the whole period of renovation.

Whatever you do, do it quickly so that if you need to find a new tenant you can still do so before school starts. I wouldn’t drag this out in court if it can be avoided. Talk with them and negotiate a settlement (or have your lawyer do it).

It would be best to find a reasonable solution that makes everyone happy. The last thing you want to deal with is problem tenants for another year.

It definitely sounds like you’re not getting the right representation. As an investor, you should always expect surprises with the property, but not from an agent that supposedly represents you.

Material defects with the property should be disclosed right away. Also, you should be made aware of any document binding you into an agreement. Agents have gotten into trouble for not explaining their agency agreements, which typically don’t hold up in court as a result.

If you aren’t getting what you need up front from the agent, do yourself a favor and get someone interested in your best interests.

College is great for a very few select career paths, think doctor, lawyer, engineer, and etc. if you have a burning desire to work in any of these fields, you will need to go to college to get the education. On the plus side, these careers are generally high paying.

If you don’t know what you want to do yet (most young adults don’t which is why people change careers a number of times, then college might not be worth the investment of time and money. There are better uses of your time than wasting four years of income.

Perhaps also consider part time school to pursue valuable experience and early income while also obtaining a degree. This might be the best of both worlds, but limited or no debt.

The bottom line, don’t accept the cost (money and opportunity) for a degree that generally isn’t worth the paper it’s printed on. Go to college if you genuinely want a career in a field that requires it. Otherwise , there are better opportunities out there.

There are more than a few investors who complain about property managers and how they structure their fees. After all, don’t tenant placement fees and late fees incentivize managers to do their jobs poorly so they can bill more?

The answer is not really. There is definitely a possibility that a bad property manager can take advantage of a fee structure, but your job as the investor is to make sure you hire the right property manager and review their actions to ensure they are reasonable.

The idea behind the fee structure is that it keeps costs low for investors as it is a pay for service system. The base fee of 8-11% covers the costs for day to day management. Beyond that, there are fees generated when your managers does a significant amount of additional work. Collecting late rent can be a challenge and often requires more than “just a phone call”. Tenant placement often requires multiple showings, screenings and etc. Why would you want a higher base fee to cover these costs when you aren’t necessarily going to use them? It’s much better to pay as you go.

The bottom line, property managers bill for the work that they perform. No investor likes unit turnover, late rent, or evictions. In a perfect investing world, none of those would come with an investment. Unfortunately, the negative comes with the territory, and at the end of the day it’s better to pay a property manager to deal with the issues so you can get back to sipping margaritas on the beach 😃

As others have said, it’s difficult to get an exact rate quote upfront since rates change so frequently. Though you should be able to get a good ballpark. Also, agents that have developed good relationships with lenders will be an invaluable resource.

What you do want to pay attention to is the paperwork you get once you’re under contract and have “applied” for a loan. You should get a loan estimate that will breakdown all your expected costs throughout the transaction. Read and understand that, and keep a copy for reference. You may need to refer back to it later.

Unfortunately nothing is final until the paperwork is completed. It’s hard in this market where there is a lot of competition and multiple buyers.

Just make sure to move forward quickly on properties you’re interested in pursuing if there’s a question of competition. Alternatively, there are some overlooked properties that have been on the market a long time and you usually have more negotiating room with those properties, and more time.

Right now sellers are paying the buyers agent commissions, which might change pending the outcome of some significant litigation, so if it’s free to you, it doesn’t hurt if you have a decent agent.

Agents can do a lot of work for you, just make sure you are using them appropriately. They should help you find deals, take care of all the details in a transaction, handle paperwork, negotiations and etc. If you’re doing all this yourself, you aren’t leveraging your team and it will be harder to scale.

As far as negotiations, not all agents are great negotiators. However, they give the benefit of stand-off. The other party doesn’t have the ability to negotiate directly with the decision maker which is a very important aspect of protection for you in a negotiation. If you want negotiations to go in a certain direction, you just need to direct your agent that way. And if you’ve done your due diligence and found a great agent, then you will have a great negotiator anyway.

It definitely saves a lot of time and hassle to use an e-signature. A couple recommendations, if you use a property management software, which also saves a lot of time, then a lot of them have integrated esign features you can use.

Dotloop is what a lot of real estate agents use for sales. It’s not my favorite, but I use it because other agents are familiar with it and that helps transactions go smoothly. Docusign might be a little easier from a renting perspective.

Lastly, consider an Adobe subscription. I have it as well and you have the ability to email out documents for signatures without the signer having to signup for an account. Also, Adobe can recognize your form fields and automatically make them fillable. This saves a lot of time preparing the documents.

You might also consider a mixed strategy. A part time job and full time real estate career might be the answer. Or alternatively, leveraging the W2 job of a partner while you work on real estate is another solution. The bottom line is there are several good strategies, and the world is your oyster!