All Forum Posts by: Wesley W.

@Rob BelandI didn't think raising my liability limits was practical, since it would involve no less than 9 discrete policy adjustments.  Just too much to keep track of.  Was looking for more simple solution.

@James Vega I've heard all sorts of great things about USAA.  Unfortunately, having no military affiliation, I don't qualify for a policy.

@Kirill Chervets I was trying to avoid placing "all my eggs in one insurer's basket."  I had a very bad experience with an insurer bait-and-switching the policy premium after I cancelled my old company but within their regulated 30-day period after the onset of coverage.  Having a distrust of the entire industry is an understatement, and I'd rather not give any one entity that much control if I can avoid it.

Thanks to everyone for your thoughtful input.  I've written down a few more companies to vet.

@Rob Beland I've called several local brokers, but I didn't list them because no one outside my area will have heard of them.

@Lynn Currie To clarify, I have separate insurance policies on these assets (up to $300K), but I'm looking for a policy to cover our liability beyond these limits.

I'm assuming one umbrella policy could be written, with the premium determined by the number/type of assets that might incur a liability claim.

Because of numerous lender issues with LLCs, I've decided I want to try and protect my assets with an umbrella policy, for at least the present.  I've read several threads on BP on this topic, and I'm still hitting the proverbial "brick wall":  finding a company that will sell me an umbrella policy that will cover all my assets, i.e. my primary residence, vehicles and several small multi-family policies all titled in my personal name.

Here is whom I've called so far (based on recommendations I found on previous threads), to no avail:

AAIC  – NO

Safeco - must write all property insurance/vehicle policies to provide (don't want to do this)

Progressive  – NO

Allstate  – NO

GEICO – NO

USLI - gave me a local agent and "is going to get back to me", but sounded like they wouldn't

I'm sure someone out there has such a policy.  Who is your carrier?

Thanks in advance!

@Jesse Waters

 Thanks for your quick reply.  Also, a corollary to my question for people to ponder would be if I were to raise the rent as a new landlord - should I just raise it (because of the water use) or couch it as a "washer surcharge?"

What would be better received by the inherited tenants?

Hi All,

I'm soon to own a small multi-family property that has W/D hookups in the units, and the current tenants all have their own washers.  The disclosed annual water bill is $2000, which via local custom is paid by the landlord.

In an attempt to curb expenses, my real estate agent suggested that many landlords charge a monthly fee for tenants' washers hooked up to the units.

My question is for those in markets with water billed to the landlord, how do you handle the extra water usage?  Do you charge additional rent in anticipation that the W/D hookups will be used?  Do you have a lease addendum that charges a specific amount for the use of water to wash clothes?  If so, what is the amount?  Is that cost per unit?  Per bedroom?

Trying not to reinvent the wheel. 

Thanks in advance!!

@Marcia Maynard Marcia - thank you for your very detailed and thorough post.

I've done everything but talk to the neighbours on the pre-acquisition side.  Very good advice, and a confirmation of how I was thinking to proceed.

Thank you to everyone who took the time to provide me an opportunity to learn from their experience.

@Michael Noto  Thanks for your quick response!

This property is in a blue-collar/working class/lower income area (C+?).  Nobody is on public assistance.

I don't believe the seller has any dossier on these tenants.  She told me she uses Craigslist to advertise vacancies and "just gets a feel" for the tenants as I understand it.  She's owned the building since 1996 and it's in great shape.

I agree that she would not renew a lease for problem tenants (although her lease is weak in several areas like not prohibitings occupants not on the lease, generous due date - 15th - and minimal late fee - $25).  Tenant A has lived there since 2009; lease expires April 2016.  Tenant B moved in in January of this year - her lease runs through December 2015.

Hello all,

I'm currently under contract to buy a fully-occupied multi-family property.  This is the first time I will have inherited tenants that are on a year lease (as opposed to month-to-month).

One lease expires in January 2016; the other in April of 2016.

My concern is, even though I am obligated to honor their leases, I don't know anything about them beyond their names.  When I rent out to tenants, I have them fill out an application and do background/credit checks on them.  The current owner has none of that.

I have two questions (thusfar):

(1)  Is there anything I can do to compel the tenants to provide me that information?  The lease (obviously) doesn't speak to this issue.  If not, any ideas/advice if I encounter resistance from them?  (There is typically a "power struggle" when one inherits tenants, in my experience.)

(2)  Is this something I should be concerned about and dig my heels in with the seller?  Is that a reasonable request?  Or should I let sleeping dogs lie until lease expiration?  I'm assuming they are not "problem tenants", but I have almost no information upon which to base this assumption.

I know there are dozens of you out there that have had a similar situation over the course of your own ventures.  How did you handle it?

Thanks in advance for your collective wisdom!

Hello All,

Well, I've had two small multi-family deals fall through over the last 12 months (I'm the buyer) over inflexible/unmotivated sellers after very unflattering structural inspection results.

I can't help but feel I am the only party with "skin in the game", and the seller is just - pick one - (mentally ill/a "tire kicker"/doesn't really want to sell his property/etc.).

Allow me to explain.  I'm working with a broker whom I am very happy with.  We do a showing, look at the rough numbers, make an offer - tit/tat - agree on a price, we both sign the contract. BAM - "under contract."

Now we move on to "due diligence", where my attorney asks for a bunch of stuff - tax documents, rent roll, water/sewer bill, copies of leases, etc.  They drag their feet/give a million excuses/send incomplete information/etc.  Meanwhile, title work is being done, and my attorney is sending letters asking for this, reminding for that, etc.

At this point, let's look at the "skin in the game":

ME:  $300 for attorney, $300 for title work

SELLER: $0

Now, after an excruciatingly long delay, we have the docs we've asked for - which are never as good as you were lead to believe - so the deal gets a BIT skinner than what you figured on the pro forma.  It's okay, you budget for that, so you have a margin of error that absorbs the shortfall.

Now it's time for the structural inspection.  It's completed and (GASP!) several major issues surface.  We begin negotiations again with a proposal for credit/remediation, but before that - let's check the score again, shall we?

ME: $300 atty; $300 title search; $500 multifamility inspection = $1100

SELLER: $0

We send a copy of the inspection report and a beginning negotation for some credit, and the seller basically tells us to "go **** in a hat."

We cancel the contract, and I am lighter by $1000-$2000 (depending on the number of units) and I've wasted a few months of time not following up on other potential deals.

This is beyond infuriating.  Can anyone help me mitigate my "skin in the game", since from where I sit there is absolutely no incentive for the seller to compromise if they choose not to.  (You'd think they'd WANT to sell a property they have listed, but I digress...)

This has happened to me TWICE in the last 12 months.  Thank you in advance for your collective wisdom.

I could,  but I am going under the assumption that they might not want to stay too long when (1) I have them sign a written lease,  (2) require them to pay on time or give them a "pay or quit" notice when they don't, and (3) increase their rent up closer to market.

I might not have any problems,  but I'd rather hope for the best whilst preparing for the worst.  And chances are, with this demographic,  there will most likely be problems,  especially since I am the "new sheriff in their town."