All Forum Posts by: Michael Vilasi

Update. 

The sick kid story was always a bit suspicious but I didn't have a reason to not believe them. I could have possible went to the woman's employer and asked about time off and see what information they would have freely gave me? That felt a little excessive. They did pay me in full for the month with the following month's rent on time so I wasn't that worried at the time. 

The check thing is what really put the nail in the coffin for me with the renters. I still cannot believe the bank deposited a business check into a personal account. That is a big no no for the bank to begin with. The update is, the tenant has sent me half of the check amount and sending the other half or sent the other half on Friday. I'm waiting on the mail to come. 

I am on a monthly lease for May and told them I will post a notice to quit in May to vacate by May 31st. 

Appreciate the input from everyone. I udnerstand this is a business and not a charity but of course having to make these decisions the first time is a little difficult. I think about my family and being in that situation. The property manager is a good idea but having only two rentals so far, I wanted to keep the cash flow while could. Pm's may want close to 10% on LTR? that is taking 30% of my net profit monthly. I'll start interviewing PM co's and consider that as next step. 

Happy renting BP community. 

Looking for any advice. The good, the bad and the ugly. 

I have a family in one of my long term rentals. In early December last year, one of their children had a medical emergency in the house and had to go to the hospital. This was a new phenomenon for them and the child had to stay in the hospital for several days while doing tests and healing. Fast forward to end of the month and they tell me that rent will be late due to the woman not being able to work as much as she otherwise would have because of their hospital time coupled with the hospital bills etc. I showed compassion as I have kids of my own but wanted to make sure rent is a priority for them. They paid partial, about 60% of rent, on the first and I told them to do what they could to get caught up with the following rent on Feb 1st . They did.

Fast forward to now, April 1st. I was doing some collections at my company (not related to real eastate) (trucking), and noticed a company with an extremely old invoice still open. Our team reached out and a little while later they told us that the check was sent to us and has cleared their account. After doing a little digging, it ended up going to my tenants house, which at one time was my residence, and also where I had some mail going to during Covid. We do not do much work with this company and their record showed that address. Even though our invoice says otherwise so the check was sent there.

Here is the kicker. My tenant, who received the company check, addressed to our company, was able to cash/deposit it at their big name bank. When I first found out that it went to their address, I asked them if they had come across any mail in early November addressed to my company. They told me no and usually they return to sender anything they receive that isn't theirs. Today I was going to start a process through my company and the payer's company banks for fraud that would involve an investigation etc. I again asked my tenant if they might have done this on accident before going to police and starting a fraud investigation and then they remembered now that they received a check that they thought was for a return of taxes they were waiting on. 

Looking for advice. First, i'm disgusted the bank just let this get deposited to a personal account without any authorization, signature that matches mine etc. Second, I know the tenant doesn't have excess funds as they are still dealing with the effects of hospitals, drs, etc. Third, I gave them a break on rent and they had an extra $1800.00 that magically appeared in their account.

Interested for some feedback, advice, or just a hug?!? HA don't you love a good tenant story. Hopefully this is one of the stories i'll talk about down the road and have a laugh. 

 Thank you for the previous article. Much apreciated. 

  Quick question and help needed from the tax pros/gurus in the audience. Thank you in advance. 

I have two long term rentals. I am not set up as an LLC. In 2023 I paid one contractor slightly more than $600 for HVAC work on property A. Even though I'm not an LLC do I understand properly that I have to furnish the contractor a 1099?

Sidebar, I have collected rent from both properties in 2023. 

I put property A in service in 2022 and property B in service 2023.

 Jeff, 

I misspoke slightly. My arbitrage is really only 1% since heloc at 3.25 and savings at 4.25. I was thinking of cds at 5.25 which I still have enough time to do, as long as i'm not locking up all of the money and defeating the purpose. Appreciate the feedback. 

Hello Everyone!

Hoping for some advice and a little insight. 

When interest rates were lower, July 2022, we locked in heloc fixed for 3 yrs at 3.25% interest only. We just purchased rental number two and I wanted some reserve cash in the bank so I pulled out some money from the heloc just to have. 

I pay 3.25% interest on my heloc until June 2025 and I currently have  5.25% interest in a high yield savings. Should I just keep it in the bank while paying off interest and make the 2% arbitrage move here or am I looking at this incorrectly? 

Would love some insight.

Hi There! 

Unfortunately,  I'm no expert but an accountant could definitely shed more insight on short term capital gains tax than myself. Assuming your capital gains estimate is correct, if you sell and find something this year you can offset some of the capital gains tax from the new purchase.   There is a 1031 exchange option to pursue as well granted you find another property.

I myself would also likely miss out on a new purchase unless I sold the house. Think about what the COC is.

You will also need to consider vacancy,  unforseen maintenance issues and cap ex that may arise in the short term.  I just bought a 100 year old house in PA and those main sewer lines are prettyyy old. Not saying you are in the same boat but you get the picture.  

If you sell and put the money in a high yield savings account until you find the next property you can currently get ~5.25% in interest.  What's that $175 bucks month one and so on? Again I know there are smarter individuals that can math here. 

How much appreciation could it have in 2 or 5 years? Does riding out a short term loss make sense more so for that? 

just some things to think about. I have similar questions every day. I'm a n00b and only have two properties and hope you get more feedback. 

Refreshing this thread if possible. 

Can anyone recommend attorney in Easton, PA or surrounding area? 
Looking to set up seller finance with wife's family. Of course, being a new investor, I haven't set up a deal like this but here are some details. 

Wife's grandmother owns the house. She is older and recently moved in with my in laws. They would like to arrange the deal where we, wife and I, are buying house from Grandmother at favorable financing. If we have 20-30 year term, we would then have to write in agreement that in laws assume loan after Grandmother passes?

Hate to be morbid but can't be any simpler and want to make sure my in laws would then assume and benefit from loan and interest. 

Anything else I should take into consideration here BP family?

3 bed 1 bath

Purchase $100k

Value $130-150

Rents 1800.00
S 14th St Easton, PA

Hello Hello Hello in my best Mindy voice. 

Is anyone out there building small mutlifamily housing? I have seen a lot or two near me on the market and have wondered if anyone is having success building and holding or building and selling a multifamily residence. I was originally thinking of duplex but any insight would be appreciated. Would think residential zoning might be the path of least resistance but again, i'm very new. 

My parents just built a custom house to retire in and I saw first hand some of the headaches they had to deal with. I'm counting on some of that. I do have a very good HVAC and plumbing contractor with many relationships with the other trades which makes it more enticing to me. Granted I can come up with 25% and get financing for the construction and convert to a traditional loan after, I think its feasible. I honestly am in the dark with new construction costs though from scratch. 

Looking forward to feedback.