All Forum Posts by: Bruce Gardner

Late to the party here, my advice is "stay away" from laundry lease services unless YOU control the terms, not them. Think about it this way - do tenants give you THEIR version of a lease to sign?  Nope - tenants sign YOUR lease, and in most states, laundry services are TENANTS in your building.  I inherited a laundry lease that I hate, have been trying to terminate for over a year, have a sales rep who has flat out lied to me, and just found out was extended by another 3.5 years (because the previous owners DC'ed the equipment, and now I'm being penalized for it)!  I will NEVER enter into a laundry lease agreement with one of these companies unless it's my lease with my terms.

Just doing a simple search in BP will show the endless complaints about laundry leases and practices.  As many have said or implied here, it seems like they are virtually impossible to get out of once you enter into an agreement, companies don't call you back, and the possible illegalities in their leases are almost impossible to fight in court because of the high cost of litigation, attorney fees, etc.

Thanks everyone!

@Steven Hamilton II Thanks, but again I wasn't complaining about the fee AT ALL, please see one of my previous posts!

And regarding "direct assumptions", there are no assumptions on the 15 minutes. 1)  I provided the form he needed to complete that I acquired from the actual investment firm I was trying to work with, it took *me* 5-10 minutes to complete it myself.  2) If he chose to just believe me and sign it only, then change my time estimate to 2 minutes to find a pen, sign it, and maybe photocopy for his records.  If he chose to verify my responses before signing, he could have easily done so using the financial statement HE CREATED for me months prior as part of my year-end tax planning session.  15 minutes was probably generous.  ;-)

Thanks again for your replies. What would you think if I were to send an email asking for a referral?  How would YOU take something like the following:

Hi Eamonn,

Thanks again for blah blah.  I know tax-season is busy for you. For non-tax related needs that happen during tax season (accreditation assessments, business transaction review, etc.), is there someone else in your firm that has more time available to address these issues?

OK, thanks!

I should have worded my comment differently on the fees - my point was that for ~15 minutes of work, he would have received fees that far exceeded what he's getting paid to do tax work.  So not only would it have been quick, it would have been worth his time.  The $350 ended up going to another guy that I had to dig and find that (a) I don't have a relationship with, and (b) I don't trust as much.

I've had TWO "frank" conversations about this type of thing:

1) When I first interviewed this firm 2-3 years ago, after leaving the previous company which WAS a "tax focused" firm.  I interviewed the CPA, laid out all of my needs, and it was primarily focused on what you call the non statutory compliance activities.  In essence, I was given a "we got you!" type of response.

2) In 2019 after my first request.  Saying something to the effect of, "but it should be a quick form and might only take you 15 minutes.", still got the "Sorry - it's tax season, I just don't have time" response.

It should not be necessary for me to say anything more. I just wanted to understand a little better what the situation was, and if this firm really is more of a tax company vs. other activities.

1)  My CPA Firm / Tax guy is *excellent*.

2) Two years in a row (2019 and 2020), I've had a non-tax related issue come up during "tax season" where I needed CPA/Tax/Accountant advice, and was given a "too busy" response.

Last Year (2019 Jan/Feb): I needed some accounting work done related to accredited investor status and a new private equity investment I was looking into. My CPA told me, "Sorry it's tax season, I'm too busy, hit me up after April 15th."  I had to find and use another guy to do the work for me before the deadline, paid $350 in fees for literally 15 minutes of his time (NOT complaining about the fees, just pointing out that it wasn't "hours" worth of work. - He just had to review a single one page document, and complete a one page form).

This Year (2020 Jan/Feb):  Looking at a cash-out ReFi for one of my properties, again I reach out to accountant asking for him to "review the deal", and I get a repeat reply, "Sorry, it's tax season, hit me up after April 15th".  This one is tougher because the benefit of him reviewing the deal is that he already know my complete financial situation and would not have to re-learn all the numbers.

I find it hard to believe that all non tax return related activities come to a screeching halt for CPAs during "tax season"?!?!  This firm is NOT a "tax return only" firm, they're a "small business CPA firm" that specializes in business consulting, tax PLANNING, etc.

Should I find a new accountant that is willing to do non-tax work for me DURING TAX SEASON?  I don't mind continuing to use this guy for my taxes (they're also QuickBooks wizards, so they help with that also), but of the ideal is to use one firm for everything.

Is it something else I'm not aware of?

I'm in the process of selling a duplex. One of the tenant security deposits only partially remains, and I'm not sure how this should be handled.  Any advice?

- Tenants paid $650 when moving in

- A few months later, tenants caused some "loss of income" as a result of violating their lease terms (Marijuana use and resulting excessive odor caused an AirBNB guest in the upstairs unit to cancel their extended stay early, costing me $450 in income).

- Via text-thread, Tenants agreed to (a) stop MJ use, and, (b) accept that I was taking the $450 out of their sec. deposit to cover the loss.

Now (about 6 months later) I'm selling the property and I'm not sure how to handle the fact that only $200 remains of the security deposit and that the only documentation of this is an old text thread.  Did I mess up with documentation, etc.?

Thoughts?

Thanks for all the great comments everyone.  I'm convinced that doing this on my own is a bad idea - so thank you all!

But, I'm still considering using the service provided by Rhino. In fact, I'm thinking of investigating using this to cover myself for non covered causes in a typical property/casualty policy.

I spoke with one of their agents on the phone.  A few things that stood out to me:

-  No Deductible.  If the tenant does $1000 worth of damage, I get the full $1000, no need to pay anything out of pocket.

-  I choose the coverage amount.  I can select $2, 3, 4k, etc.  The tenant is who pays the premium, not me.

-  It covers lost rent, but obviously only up to the coverage limit that I selected.

-  My damage list is what is used.  If I listed $200 for a hole in the wall, then when there is a hole in the wall, I get $200.

-  The phone agent said they currently have a 100% claim approval - they have never rejected a claim.  I do find this hard to believe, but that's why I'm doing my due diligence.

-  It's CHEAP!  For $1000 coverage (on a per unit), tenant would pay between $5-8/month depending on their credit score, etc.  For the landlord it is FREE.

I am also considering COMBINING this service with a self-supported program.  For example - I would present the tenant two options:

1)  Regular security deposit.

2)  No deposit, but, tenant agrees to do two things:  Pay $100/month higher rent, and sign up for this service.

I TOTALLY get the tenant screening issue, and that's a factor in me thinking about this - but the type of tenant I am looking at (this is a higher end property) is outside the income range for the lower level tenants who wouldn't qualify anyway.  I'm also considering putting a credit score limitation on this - requiring better credit to qualify.

@David Bardwell Two things:

1). We’ve charged a flat monthly fee ($50-90) for use of the W/D without any issues.

2). I’ve “heard” that coin operated is not a good idea. I’ve had some conversations with folks who do student housing, and maybe even read something here on BP forums about it. Coin laundry causes the tenants to ruin the machines by cramming more laundry than physics would allow to try and save a few bucks. The machines will break more often and wont last as long.

Our approach has been either a monthly fee, or FREE laundry as a perk. Won’t do coin operated.

Great replies, thanks to you both.

@Thomas S. - great point, I hadn't thought of the deposit as part of the screening process, just for it to pay for repairs.

@Dennis M. - Makes sense.  This would be an argument against me doing this on my own for sure!  But, what if I use one of these services, then the "thousands in damage" would be covered by the policy paid for and it wouldn't matter?

I would need to see the fine print in these policies to determine if they were useful or not.

Background - there are a couple companies out there who provide special insurance for no security deposit.  One is called "Zero Deposit" based in Europe, another is Rhino.  In essence, tenants don't pay a security deposit, but instead, they pay a monthly "premium" to the company.  It is NOT renters insurance, it is a unique policy that tenants pay for, but when they move out if there is something that a classical security deposit would normally pay for, it gets covered for the landlord.

Rhino appears to be operating in the U.S., and Zero Deposit is in Europe.  My question for you expert landlords:

-  What are the pitfalls of a Landlord implementing this on their own?  In other words, give potential tenants two options:  Option #1, classical security deposit, option #2 - No security deposit required, and instead they pay an extra $$/month NON-REFUNDABLE in perpetuity.

I'm considering having THREE options:

Higher-Risk Tenant:  High Security Deposit (1.5 to 2 months rent), for those on the lower end of the acceptable background reports.

Normal-Risk Tenant:  Normal Security Deposit

Low-Risk Tenant:  High end of background check, AND, requires existing home walk-thru:  NO DEPOSIT, but $$/month higher rent.

Thoughts?