All Forum Posts by: Nicholas Jose

Thank you for your feedback, Aaron. When I'm preparing these letters/documents, I'm really learning as I go. I've made the below change to the New Landlord Transition letter and will now work on the Estoppel Agreement form that will go along with said-letter:

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I have included with this letter a Tenant Estoppel Certificate for you to fill out. Please complete this document and return it to me as soon as feasibly possible, for it is essential that I have all of your important information on file and up-to-date. For your convenience, several self-addressed envelopes have been provided for your use.

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I've made the change from "Tenant Update Form" to "Tenant Estoppel Certificate" because a thought occurred to me: aren't these two documents the same thing?

Good afternoon, BP.

I've been looking at New Landlord Transition letters on this site and wanted to create one for myself. I took pre-existing ideas from other members, re-wrote them, and added my own spin to them and posted the draft below. (If you see similar wording/phrasing, it may have come from you, to which I give full credit!) Anyways, here's what I've came up with:

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[TODAY’S DATE]

[RESIDENT’S NAME]

[STREET ADDRESS]

[APARTMENT NUMBER]

[CITY, STATE/PROVINCE ZIP/POSTAL CODE]

Re: New Landlord Transition Letter

Dear Mr. [RESIDENT’S LAST NAME],

My name is Nicholas R. Jose and I am the new Landlord of the Leased Premises. As you may have been aware, this duplex was purchased by me on [CLOSING DATE], and the resulting change in ownership will take full effect today, [TODAY’S DATE]. Your current Lease and payment terms are recognized until [DATE]; however, moving forward, please send all payments, maintenance requests, and correspondence to the address listed at the top of this letter.

If you are currently using an automatic draft, cash deposit, or other form of payment to pay for your residency, please contact your financial institution immediately so as to avoid any late fees and/or eviction notices.

I have included with this letter a Tenant Update Form for you to fill out. Please complete this document and return it to me as soon as feasibly possible, for it is essential that I have all of your important information on file and up-to-date. For your convenience, several self-addressed envelopes have been provided for your use.

If you have any questions, comments, or concerns, please feel free to contact me between ##:## am to ##:## pm. My email address is [XXX], and my phone number is (###) ###-####. It is recommended, however, that you reach me through email. Finally, in case of an emergency requiring urgent attention, please contact me on my cell phone anytime at (###) ###-####.

I thank you, Mr. [RESIDENT’S LAST NAME], for your diligent cooperation during this transition period. As your new Landlord, it is my high honor and distinct privilege to provide you exceptional management, prompt maintenance, sound hospitality, and a quality environment to call home!

Sincerely yours,

[SIGNATURE WRITTEN IN PEN]

Nicholas R. Jose, Manager

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Please let me know what you think!

Good morning, BP.

Initially, I was learning all that I could about fix-and-flips; however, I'm strongly considering turning back to owning rental properties. I just have a few basic questions regarding what to do before I get my feet wet and my hands dirty:

1. Before I own any piece of property, I would need to have all the necessary documents ready (i.e. rental application forms, notice to quit/vacate, etc.). Would I need to meet with an attorney to iron out this paperwork? Or could I save money by creating these documents, myself?
2. I drive a car and have car insurance under Company A. When I buy my first property via FHA, should my insurance umbrella policy be covered by that same company? And when I start buying more properties, should that same company still be used?
3. I only have a checking account with Bank A. (I closed my savings account because the interest rate wasn’t worth it.) When I own a property, should I create another checking account and a new savings account with Bank A? Or should I go to another bank? I'm anticipating the event of me getting sued by a tenant and losing the lawsuit - hopefully this never happens and my bank account(s) are secured to a certain extant.
4. Under the New Jersey Landlord and Tenant Registration Requirements guideline, a “landlord” is someone who “rents a two-dwelling unit that is NOT owner-occupied.” So as soon as I move out of my first duplex and into another, am I legally required to register for a landlord license (and all other necessary certificates)?
5. At what point can I start owning property under an LLC? Transferring title from my name to an entity would trigger the due-on-sale clause. I'm thinking that if I own a property long enough, I could sell it and use the profits to purchase a new property under an LLC. Does this plan make sense?

Update: 4/10/2019

I finally did it. I finally saved $10K and completed Phase I of my 3-year plan for financial freedom. I texted my uncle about this great piece of news and he told me to just keep saving my income from work.

During these past few months, I've been reading Brandon and Heather Turner's "The Book on Managing Rental Properties", downloaded the free documents from said-book, and tried to rewrite some of the said-docs to fit my company's guidelines. Yes, you heard that right, I've came up with a company name with a logo to boot. Now I just need to print myself some business cards and my RE business can finally take off ... kinda.

I say "kinda" bc, when I wasn't reading about managing properties, I looked around BP for discussions started by people who are in a similar position as I'm in: a novice RE investor trying to break into the NJ market. Unfortunately, based on the conversations that I got from the forums I've visited, I personally concluded that the property taxes and cost of living are so crazy-high in NJ that it is nearly impossible to cash flow with rentals. Bummer.

I'm not giving up on rental properties just yet, though, but maybe fix-and-flips are just what makes sense to me at the moment, which is why I bought J. Scott's "The Book on Flipping Houses" and "The Book on Estimating Rehab Costs". At some point, I will go back to studying being a landlord, but my landlording business will most likely be away from NJ - away from friends and family.

Also, when the time comes for me to start my own fix-and-flip projects, I'm gonna have to look for hard and private lenders. In fact, I'll be going to a RE meeting tomorrow that'll focus on hard money lending.

Finally, with all this being said, onto Phase II:

Phase II (early to mid-2019):

• During the time between investing the $10K and getting it back (with ROI), my earned income from my employment will be used to grow my reserves (ensuring that I keep my expenses in check).
  • ***I feel like I could do something productive during this time, as I view the means of growing my reserves through my earned income from work to be a long and slow process. Perhaps I could form a partnership with someone from a RE meeting?
• Continue learning REI.

Good morning, BP.

I've been going to a couple of RE meetings now, and at some point, I'll bump into someone who might be looking for a partner. I would like to partner up with someone, too; however, what's holding me back is the great unknown: I have absolutely no idea who this person is! Could this person be a scammer waiting to sucker in the novices? Has this person partnered up with anyone else before? How's this person's track record? Etc etc.

Maybe I'm overthinking things, but if you guys were to partner up with someone you've just met for the first time, how would you go about screening them?

Is now a good time to start moving out of NJ lol

@Jay Helms I assume you’ve read Napoleon Hill’s “The Laws of Success”? And sure, i’ll send a message as soon as I can.

@Caleb Heimsoth By “retire”, do you mean sipping pina coladas on a beach in Aruba? Then no, I’m not planning on retiring anytime soon. I am, however, considering saving enough money from my 9-5 job so that I can transition (or, to put it more bluntly, QUIT) from company employee to real estate investor. That way, I can partner with my uncle in his house-flipping business.

Increasing my income did cross my mind, but I’ve forgone the idea mainly because:

1. The more money I earn, the higher my tax bracket, which means more money the government takes.

2. Going from one job to another while gaining knowledge and experience unrelated to real estate is counterintuitive and only prolonges (or does not lead to) financial freedom - at least from my perspective.

@Odie Ayaga lol nope, I'm not planning on disappearing anytime soon. This entire post will be used to document my 3 years' journey to financial freedom, so I intend to come back every now and then to post updates. (For instance, I'm considering switching from house-hacking to BRRRR.) However, there could be long gaps in between updates, but that doesn't mean I lost interest or forgot!

UPDATE: 1/12/2019

Good evening, BP.

I'd like to give you guys a status report in terms of where I am in this game plan I've created. As always, let me know that you guys think!

Phase I (early 2019):

• Grow seed money by first saving $10K from my 9-5 job and investing it with my uncle in fix-and-flip projects. My uncle flips from 1-2 houses per year and the ROI is around 20%.
• Continue learning REI.

I'm on track to complete this Phase sometime in mid-February or early March.

Phase II (early to mid-2019):

• During the time between investing the $10K and getting it back (with ROI), my earned income from my employment will be used to grow my reserves (ensuring that I keep my expenses in check).
  • ***I feel like I could do something productive during this time, as I view the means of growing my reserves through my earned income from work to be a long and slow process. Perhaps I could form a partnership with someone from a RE meeting?
    
• Continue learning REI.

Phase III (mid- to late-2019):

• Get back my 10K + ROI. At this point, I have four options:

1. Reinvest the 10K again and repeat Phase II,
2. Reinvest the 10K again, plus some of my earned income,
3. Reinvest the 10K again, plus most of my earned income, or
4. Reinvest the 10K again, plus all of my earned income

• Continue growing my reserves by working at my 9-5 job.
• Continue learning REI.

Numbers 1 and 4 are pertinent towards my path to financial freedom since the money I already gave my uncle in the beginning of this year would be re-invested in his projects and grow exponentially (#4). Additionally, I could save another $10K from my earned income from work and give it to my uncle for more house-flipping projects (#1) and make it go the route of (#4); however, should I do this, my financial reserves would be "depleted".

Phase IV (2020-2021):

• Repeat Phases I-III for the next two years.

Phase V (2021):

***This is where things get interesting

• Have >$50K to start investing in rental properties.
• Find a 3-4 bedroom multifamily unit somewhere in northern NJ and house hack it via FHA loan.
  • Since I'm living rent-free with my parents, maybe instead of doing this, I could do BRRRR on a property. Now that I think about it, if I were to house-hack a property, live in it for a year, then move out and find a tenant to occupy my unit, then it'd be like me staying at home, BRRRRing a house, and finding tenants to live in the units. I would think that the ROI would be higher for the BRRRR method than for house-hacking.
    
• Have sufficient reserves in case something goes wrong.
• Continue working at my 9-5 job? Continue house flipping with my uncle?
  • I could use my uncle's real estate agent (or any other agent) to find properties to BRRRR on and finally transition from 9-5 employee to real estate investor.

Phase VI (2021 and beyond):

• ?????

Sure, I'll take you up on your offer and see if I could make it. Could you please PM me the details of the upcoming meeting? Thanks in advance.