All Forum Posts by: Chan K.

@Mike D'Arrigo We don't provide AC as part of the rent in MA - in my case. In the urgent case, I guess I will have to call a plumber .... to go fix it as I allocated 10% for this reason and have reserve to withstand.

@Gabe G. Jon is really informing.

I am currently in a similar phase. I am looking for different way get in cheap. I also just started investing in Sept. 2013. I closed on my 4-Family this March, and the cash flow has been great. I am pretty handy to a certain level. I have been fixing my units on my own. So far, the tenants have not been calling. When they do call, I just told them I will come by over the weekend.

I took the investing approach the conventional way, where I go to a bank and ask for a loan. They came back telling me I need 20-25% down payment. This is not really working as I am buying multifamily turn key off the MLS. The required down payment is too substantial for just a $250k PP. It prevents me from accelerate and accumulate the portfolio.

I start opening up to fixer up multifamily REO property or homepath, where some institution allows less than 20% down requirement for investment. I also start opening up to single family fixer up flipping or holding (refinance out) as exit strategy. There is a hard money lender option in this area in addition to the conventional bank.

I also start seeking a partner as well who is handy, good credit, has a full time job and willing to fix house after work and over the weekend.

@Mike Hurney My liability limit is about $200k. I think I am going to pursue the limit increase and umbrella policy, while I am waiting to setup the LLC.

I still want to utilize the refinance/HELOC to help me finance more money to accumulate more properties. In this case, I think I might wait for a while with the LLC as the increase in liability and the umbrella might just do the job with small residential.

If we decided to proceed with the LLC in the near future, I will ping the attorney you recommended. The one I am working with now is not responsive. I sent her a list of LLC name to search for availability like on Monday, but I have not heard anything back yet. It is already Friday - What the heck??

Mike, are you familiar with around MA? Do you know which towns have a decent rent market and low purchase price?

@Mike Hurney I have between 25-35% in equity for each of my investment property and primary resident.

So, I guess you would recommend a landlord policy and an umbrella policy on the top, instead of the LLC as it is difficult to finance. In addition to liability protection, I feel that LLC is a good asset separation protection in the future if I adopt this model as I accumulate more properties in the future.

Hi BP Friends,

Does BP have a place somewhere that lists all the people who are looking to partner, sell or buy?

If you are residing in MA and looking for a partner to flip single house and buy/hold multifamily, feel free to send me a message.

@Kiwi Mills I guess that is not good if the lender call the "Due on Sale" (something like that) clause upon setting up the LLC. I hope the lender allows me to cancel it (LLC) in this case, because I don't have cash to pay all the principal. I have to double check with my attorney then. Thanks - great point

@Bob E. and @Charles Gillis I do have landlord insurance on the property. The liability coverage is not much ~$300k. I guess it could run up pretty fast on multifamily in the event of a lawsuit. I will really need to ask my attorney how to follow the LLC structure fully as mentioned by Charles - hmmm.

Hi Everyone,

I already have the investment property. Currently, I have a conventional 30 fixed rate on it. I want to put this house into an LLC. I contacted the lawyer this morning, and she will charge me $1000 for labor just to help me set it up in addition to the filing fee.

@CK Hwang Some people said similar thing about LLC vs high insurance liability coverage. The thing is, every educational book and audio book I listened to recommend LLC. I will pursue LLC concept rather the insurance liability. I guess I will weight the benefit as I became more experience in the field.

@Shaun Reilly Thank you for the clarification regarding buying straight into an LLC up front. Something that I will need to know in the future.

@Charles Gillis It is good to know that it will only cost me less than $1000 for an going sustainability.

@Christian Carson You mentioned that I will have a hard time refinance and pursue HELOC within the next year or so - I don't plan on doing any of this in the near future, because I don't have much equity yet.

But, will I have this problem (refinance and HELOC) in the next few years (2-3)?

I definitely want that tail-end protection. Most of the 3-4 Units properties are old. Things can slip, fall and break over the tenant. In the case of a lawsuit, I want to make sure that I am covered.

Another question I have is that once I go LLC, can I revert it back (no LLC - just a regular investment property)?

Hi BP Friends,

I would like to setup my investment property under an entity or corporation. I want to protect myself against tenant liability and asset separation protection.

Does any BP friend know of a good attorney/lawyer that resides near Lowell, Leominster or Worcester MA that familiar with this process (setup LLC)?

If you do, would you be able to share their contact information with me?

I met this attorney who attended my local real estate meeting, but she was busy all the time when I called. I left her two messages already, but she did not return my call yet.

Thank you ahead of time.

Thank everyone for the great feedback.

I do understand the concept of PM as Josh the BP founder mentioned in his podcast, and he has a problem trusting them. It might be the last resort I might use if I could not overcome.

I think I am going to take it slow and give it time. This is a steep learning curve (managing bad tenant) compares to my full time professional.

I spend a lot of time reading and listening podcast/audio book regarding how to acquire properties that cash-flow with good cash-on-cash, different method to try to finance and investing strategy, but I fail to put any education time in place for tenant management. It is a big part of sustainability. I am slowly learning it.

Sometime, I am confuse, because there are a lot of tenants drama. They complaint about each other, and I don't know who to believe. It is quit interesting, and good learning experience to go through. I want to treat everybody as fairly as possible and in a human manner. Ideally, I can come out cut-and-dry telling them to follow the rules or be out in 30 days.

Hi BP Friends,

I would like to discuss and brainstorm on something that has been troubling me when I inherited my tenants.

When I bought my Quad, I inherited 4 families from the previous owner. The two families are section 8 and the other two are non-section 8.

The two section 8 families are having a bit of friction toward each other.

Both section 8 families have kids.

I am OK with one of the section 8 for next, she complaint a lot, but she keeps the house clean and she listens.

I HAVE a problem with the other section called him "Problem-8". He leave a lot of junk and trash in the common area where his floor is located.

In my building, there are two entrances, the front (main) and back entrance. Prior to my taken over, Problem-8 uses to block the front entrance and let his god poops in the front porch. His family makes a lot of noise. My others tenants complaint about it and they even called the police on him. My others two non-section-8 families are intimidated of Problem-8. Also, Problem-8 has been living in the building the longest like 8 years.

My wife and I told Problem-8 to keep the noise down and within the allowable hours, don't block the front entrance and don't let the dog poops on the front porch. We don't live there, so it hard to monitor the request.

We also would like to have him clean his common area. We also would like to have him stops dominating the parking lot. Him and his wife are not friendly. When we first introduced ourselves to them, they did not offer us a seat and his wife did not talk to us. I thought it was rude and strange. Problem-8 was first uncomfortable talking to us, but then he got warmed up at the end as we were fixing/cleaning around the house. At the end, we feel very uncomfortable confronting him about the junk/trash and parking lot issue. He is a TAW, so we can practically tell him it is over.

Any thought out there what I should do - let him go or leave it be.