All Forum Posts by: Mak K.

This is like encouraging tenants not to pay the bill. After few months, they are going to walk out. If they cannot pay one month, what makes you think they are going to pay for 4 months together. And even if they have that saving, they may just stay for free for few months, and take the savings to make it a down payment for a mortgage for new home.

If you sell or buy a property, does it give you the right to end the lease? Will this force tenant to move

Thanks.

How is late fee calculated. 

Lease states:

Rent due 1st of the month. If rent not received by 3rd, a initial late fee $75 will be charged. additional $25/day thereafter for until rent and late charges are paid in full.

I use cozy to get electronic ACH payments. So if tenant pays me on 6th, my late charges should be $75+ $25 (Aug4) + $25(Aug5). 

Question#1: Should Aug 6th be included or not?

Question#2: In a scenario that Tenant pays on Aug 6th, and it bounces and I come to know on Aug 8th of bounce payment. Now tenant gets a bounced check fee per lease +$75+ Late fee till Aug 8th.

Am I doing the math correct.

Any updates on your project? I am curious.

Anybody else can give some inputs. 

@Max Versteppen - your answer does not help nor is to the point as it looks like its more spam marketing your signature websites

Thank you Nathan. I liked your idea of putting it on the lease.

I have a rental unit where the carpet is all good except for 2-3 spots where there are few stains. These were from previous owner. I did had a professional deep clean the carpet but they could not remove the stain.

The new tenant opened a request for carpet stain. I do not think I should be changing the carpet as its all good other than  the few small stains.  The house is not a high end luxury area. Its a average day to day community where most of the houses are on lease. 

How should I respond to this? Is it ok to tell tenant that stains are ok and not a valid request. How should I word the refusal in the email.

I am thankful to the awesome community here. I had few hiccups on my first property purchase and during renting it out. I would like to share it to the newbies. Some are my lessons learnt and some are just observations:

*Please excuse my language as I am typing as I think. So excuse the grammer and

1> Plan out your purchase strategy upfront. If you are planning LLC, create a LLC structure in advance. I tried to create the LLC after placing an offer on a house and I was fighting time against closing date and LLC paperwork

2> LLC can be done online for $50-$100 fee+ State fee. There is a major site which does it at $0 fee+ state fees only. Its ending in xyz file.com. No need for expensive lawyers. You do not need any paid documents services for EIN or Financial Account Authorization Letter or agreement or official seal etc by paying a lawyer. The same things can be found online for free. The only exception to the rule is if you have LLC members outside you & your spouse. Yes then you need lawyers to do partnership agreement etc. Again everybody is different so do not take my word.

3> Which state to do LLC: For the starters, in all honesty it does not matter. Do WY and then your state or just your state. When you grow big, you will have ample of money to pay a CPA. No need to pay a CPA to plan a 10 year million dollar revenue business plan. This does not mean you should not hire CPA. I am only saying there are CPA who quoted me $1500+ dollars for advice and what they were talking did not even make sense. Since it was not my first rodeo in terms of LLC & running a business etc, I knew upfront how much they were overcharging and their marketing BS. Sorry I am not trying to offend anybody in this profession. There was a one honest CPA who told me that the fees I will pay for business tax saving will be more than savings he can bring to the table, so he just told me, ask me questions and i will guide. So yes there are good and bad apples.

3> Bank account: Please open the LLC bank account and have all money deposited in advance. Again I was doing last minute LLC and bank account and COVID just made it tough

4> Also make sure to keep a minimum balance in the bank account. I open a separate account to collect rent. Banker forgot to tell me that I need to do a small deposit within 60 days. My first incoming ACH rent payment bounced as account was closed due to zero balance.

5> Renting: While you are looking for tenant, ask your agent to send the standard lease document upfront. Study and read it and pre fill it. Hence when you get a tenant, you are not struggling with understanding lease etc. Also  you are likely to forgot inclusion at the last minute. 

6> Initially I thought to use property management company but later decided to experienced managing tenant myself. I think it was a good decision I made. Doing it yourself, will help you to know in and outs. You can always hire PM later

7> If you get tenants, have them sign the lease and pay deposit within 24-48 hrs. I had a situation where tenant sat on it for 4-5 days and later did not sign it. They paid for background checks etc but did not end up signing. In the same time I lost 2 other good prospects. This ended in 20 days of wait in finding the next tenant. I would accept 2-3 tenants at same time making them do background check simultaneously and pick the best. I did one at a time and lost good ones. If I had asked 2-3 tenants to do background checks, I would have been better off.

8> For the rent, price the house right in the first place.  If not sure, do $25 below market.  I started on the high side just to lower the price every week by $50 for 4 weeks. When the price was lowered to match the exact market price, I got 3-5 offers in a week and it leased within  7 days.

9> When you are analyzing the house for purchase, use lowest  rental comps in the market. In my market I had 2000 SF leasing at same price as 1500 SF house. Here is an example. If I use narrow range filters for 1400-1800 SF, I see range of rentals at $1300- $1800.  But when I use wider range filter 1400 SF to 2000 SF, I see few 2000 SF house leasing for $1600. This pretty much tells me if you are buying a house 1600 SF and expecting rent of $1800, that is not gonna happen.  Plan for the worse case scenario of lowest range of rent. When you analyze, do not narrow down filter but look at full range in the market.

People do side business to become free of 9 to 5 job. When they get to a point of freedom they work 80hrs on their business to earn more and more. 

If I have a million, I would go to a residential house contractor and cut a deal to buy 6 houses for $150k each (Texas). That should give easy $1000+/- per house cash flow after taxes in rental income since house is paid. Thats a 6k income/month which is 72k/year. Hence every 2 years I can buy 150k house from rental income. Repeat this cycle. Once I get at 10k/month, I am retiring and travelling.