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All Forum Posts by: Matt Davis

Matt Davis has started 6 posts and replied 22 times.

Following up to thank everyone for the replies. Thank you!

The seller backed out of this deal. Our bank wouldn't have lent on it without the problem solved.  I believe the seller was very fearful that he would get "caught" and end up in legal trouble, or that we would report him to the state if he backed out, which we did not do.


I guess he'll have to figure out how to solve his problem. We are already moving on to better deals. 

@John Underwood @Nathan Gesner I appreciate the replies. Unfortunately, out here in MA there are some pretty strict lead laws. No lead paint in dwelling units with children under 6. Landlord's responsibility to remove the lead, hefty civil and criminal penalties for not following the lead law, and liability if a child is found to have lead poisoning. And if you choose not to rent to families with children under 6, they'll come after you for discrimination.

I’m in an interesting situation with a deal and looking for some advice. We got an offer accepted on a great off market 6 family in Massachusetts.

We’ve discovered that there are children under 6 living there AND confirmed lead paint hazards recorded in the database. The failed inspection was about 20 years ago and we’ve been unable to track down the report.

The TAW tenant has refused to leave. She likes the low rent (about $1000 under market) and turned down $12,000 cash for keys! She is aware of the lead and maybe using it against the landlord.

We wanted to test for lead prior to closing, but the seller is refusing to let us do a lead test. He’s afraid it will bring the issue to light with the authorities and if the cost is too big we’ll back out and he’ll be stuck with a bigger problem. We’ve considered closing with the tenant in a hotel and doing abatement after closing, but don’t like the idea of doing this without an inspection So we can get an idea of what it would cost to remove the lead.

It’s a great deal, once stabilized it should cash flow great and we can build quite a bit of equity. The seller wants to sell, and we want to buy. We just need a way around this issue.

What would you do? Buy it anyway? Walk? Or is there is some sort of compromise we haven't thought of?

Post: Massachusetts: Credit Card Processing Fee Allowed?

Matt DavisPosted
  • Lowell, MA
  • Posts 22
  • Votes 14

Legal question:

Massachusetts has lots of rules landlords must follow. One of these is that we are generally not allowed to charge fees. My understanding is that Pet fees, move in fees, application fees, etc. are all illegal. But how about credit card fees?

My property management software Buildium supports credit card payments (if enabled) and the x% fee associated with this can be configured to be charged to LL or Tenant. I keep the feature disabled. Would it be illegal to enable this feature and have it configured to charge the fee to the tenant?

I am a partner in a three-member LLC that holds a multifamily in Lowell Massachusetts.

Currently, I am providing property management services for the building. The other members are not involved in property management at all. In return for my services to the partnership, I am being paid a typical 8% gross rents property management "fee" from the LLC (before and separate from any distributions). I'm believe this "fee" would be a "guaranteed payment" from the LLC, but it's still real estate income, Correct? Or is it earned income?

Now, I have an idea, but I’m not a CPA so I’m not sure if it would work:

I'm considering setting up a single member LLC for the property management. This way the partnership would pay the fees to my Property Management LLC. Now the property management fees won't be a "guaranteed distribution" but would be an expense to the partnership and revenue to the second LLC. Now if I purchase some supplies (tools for example) my LLC can own/deduct the cost of those tools from the management fees, and the supplies don't belong to the partnership. Additionally, these management fees aren't real estate income anymore, so if the Property Management LLC has a loss at the end of the year, I can deduct those losses from my W2 income even though I'm not a real estate professional. Right?

What am I missing? Is this allowed? Can my partnership pay my single member LLC and then issue a 1099 at the end of the year? What are the drawbacks, besides the cost of the second LLC registration?

Post: VIRTUAL Pints and Properties Meetup

Matt DavisPosted
  • Lowell, MA
  • Posts 22
  • Votes 14

I'll be multi-tasking... on the call while painting an apartment

Post: Business Phone for Property Management

Matt DavisPosted
  • Lowell, MA
  • Posts 22
  • Votes 14

Big thanks to everyone for all the awesome replys. Its great to hear everyones opinion on this subject. 

Post: Business Phone for Property Management

Matt DavisPosted
  • Lowell, MA
  • Posts 22
  • Votes 14

Sandy, thanks for the suggestion. I was just giving some additional background on the size / scope of the business in case it affects peoples answer knowing that I'm not the only one involved in the company, but it's still small (only 8 units), commercial (LLC). I suppose the other members won't need a business phone number becuase I'll be responsible for management, but I could see the situation arising where I forward the number to a partners phone if I need to leave town for a couples days, or allow them to "log-in" to the phone service from their device.

Post: Business Phone for Property Management

Matt DavisPosted
  • Lowell, MA
  • Posts 22
  • Votes 14

I'm expecting to close on a couple properties in the next few months and will be managing the properties myself. I'll be using an LLC and have equity partners. I'm thinking it would be smart to get a business phone number instead of using my personal contact info to avoid having my personal info out on the internet and in public records. 8 units total, for now, but more to come.

Does anyone have a reccomendation for a low-cost app service for a business phone number? There are tons out there to choose from...