All Forum Posts by: Max James

I realized the same thing with the umbrella policy as well. If I got that, all of my premiums would have gone up for car and what-not. If you are going the LLC route, I would probably pay a lawyer to do that. Ask around your area for recommendations.

Since I'm still starting out and have a small amount of other assets, I'm not sure an LLC makes sense for me. Once I have a family and say I get sued and my own personal home would be able to be taken away, then I'd be in a different scenario.

Holy smokes your article says you owned 42 units and self managed all of them still without any employees on your team yet??!  That's impressive and sounds like a ton of work, how did you manage to do that?!  

What were some of the first few systems you implemented in order to maximize efficiency and time?

I haven't done extensive research, but turnkey rentals seem like a poor investment.  Unless you are a filthy rich doctor or someone who has zero time to dedicate to understanding the biz, why would you want to take the hit on your returns and cash flow?  I'd go local and hold yourself accountable.

Is there a good reason why you want to create an LLC for your properties? I just went through this exercise and determined increasing my insurance liability limits to $1 mil on both of my places was a better option.

Plus, if you already own the buildings then you trigger the due on sale clause in your contracts which will put you at risk of having to fully pay off your entire mortgage.

LLC's can be great for some people, but I'd do some more research to see if you really even need one.

Have you read this?

https://www.biggerpockets.com/renewsblog/2013/08/17/rental-properties-llc/

Did you place an offer??

A co-worker of mine is in a sticky situation.

He is currently under contract to purchase a home which has an easement on the property that takes up about half the yard and is a deal breaker for them.  The problem is that they discovered this easement after the home inspection and addendum was signed.  After discovery, they contacted the seller and said, "hey, this is a deal breaker, we want to release ourselves from the contract".  The seller said, "NO" and now they are looking to go to court to settle this issue.

Does anyone know or have any experience in regards to whether or not it is legally allowed to terminate a contract based upon the non-disclosure of the easement?  The current owners have a garden growing on the easement and it looks as if it's their own property.  However, the garden is technically illegally growing and it's now technically a title defect.  

Does anyone know if they have the legal ground to terminate this contract?  If the sellers agree to "fix" their garden and correct for the title defect, but end up not getting everything fixed by the closing date, can the buyers back out due to the fact the sellers are delaying closing?
Thanks!

@Mike Cumbie great points.  It would be a big issue if you had to deny your new resident the option of moving into their home they already paid for 6 months ago.  Is there anything in your lease you could include that would protect you from this?  Which could apply to any situation where you can't get a tenant evicted.  Have a clause in the lease which states if the tenant does not leave when the lease expires, they are responsible for all expenses incurred along with providing new residents with temporary housing, etc.

It seems like the trend with the current 2-4 family rental market is to list your building on the MLS with a ridiculous price tag that does not make any sense. Those are the buildings that you want to avoid. However, if you search long enough, and like @Jeremiah B. move to a different market (could be just one neighborhood over), you are likely to find a deal you like and where the numbers make sense.  There was a good article recently written by @Ben Leybovich regarding this topic, give it a Google.

In regards to forcing a current tenant to make a decision or asking a future client to sign a lease, you could be in a sticky situation.  I think it would only make sense to first ask the current tenant what they are planning on doing when their lease expires.  This is how I handled the last one.  The resident I had was moving out of state so we knew well in advance of the plans.  I can't imagine there are any legal issues with accepting security deposits that far in advance.

As far as the evictions go, this is definitely something you would be risking.  However, isn't that always a risk no matter what the expiration of a lease is?  If the current resident doesn't want to move, it doesn't matter if you started advertising 30 days or 300 days out.  The only difference would be if you were to start advertising once the apt was actually empty.  That just seems like a waste of money and also put yourself in a stressful couple of days to get all your ducks in a row.  

 Hahaha nice input Michael!  You made great points and examples.  Like we mentioned earlier, the Looky Loo's will undeniably add in extra work (I experienced that).  Showing occupied vs unoccupied units is definitely a good one for debate.  In half of my duplex the residents have the place immaculate... It looks like something from HGTV.. The other, however, is a different story.  I would be proud to show the HGTV unit, but the other one, not so much.  Could be a deterrent for future residents, guess we will wait and find out!