All Forum Posts by: Nick Coons

Quote from @Michael Cai:

market rent is about 3000k.

If you can rent your property for $3 million, I would say that's definitely the way to go. ;-p

I live in Tempe (Phoenix) and my primary residence has a pool. I'm looking to move and to convert my current residence to a long-term rental, and I'm trying to figure out how to deal with the pool. I've read various posts on here indicating that pools are liabilities, and lots of recommendations for just filling them in.

While I get all of that, I live in Phoenix, and here, a pool is an asset, both as a rental and ultimately when I sell the property. I understand the liabilities, including from a safety perspective, and I'm addressing all of those with my insurance carrier. So I've decided that I'm going to keep the pool, and I'm looking for advice on how to handle that from a rental perspective.

I've considered a couple of options:

1) Hire a maintenance company to take care of the pool and to make sure the pool is always in good condition, and then include that cost as part of the rent.

2) Allow the tenant to maintain the pool themselves at their own expense ( either by actually doing the work themselves, or hiring their own company), and then include the pool's condition as part of my regular inspections and charge them penalties for cleaning the pool in cases where it's in sub-par condition.

I think the merits of the first option are pretty obvious. I know that the pool is always kept in good shape, as my primary concern is that it would deteriorate, turn green, attract mosquitoes, violations from the city, those sorts of things.

The merits of the second are that it allows the tenant to maintain the pool themselves (if I were a tenant, I know I'd want this, because I like doing my own home maintenance, including my pool). I also get to advertise the rent at a lower amount since it won't include the pass-through pool maintenance costs.

I'm curious how other landlords of SFHs with pools handle this.

I spoke with my Realtor, and he gave me a couple of pointers.

He indicated that when prices are going up, because these communities have niche buyers, the prices increases here are lagging. So they can become more popular following price increases elsewhere since the prices here don't increase at the same time.

He said that, also because of the niche community of buyers, I should expect more days on market. So from a deal analysis perspective, this would mean accounting for 1-2 months of additional holding costs.

Lastly, he said that because of the demographic, it might be a good idea to carpet the bedrooms. Normally I do hard flooring (like LVP) throughout, so this would be something somewhat different from my usual.

I'm curious if anyone has sold or flipped in 55+ communities.

Sun City is a city northwest of Phoenix, and I'm seeing some good deals in that area that would be great for flipping. However, it's a 55+ community. In terms of flipping or selling, I have no idea what impacts (if any) that might have on the process. For instance, do people in this demographic tend move "more leisurely" and I should account for more days on market? Or perhaps do things move more quickly because they'll tend to have their ducks in a row more so than the average younger buyer?

I've already reached out to my Realtor to get his take, but I wanted to see what thoughts any others with experience have had in areas like this.

I met with my potential investor this past Wednesday and everything went really well. He's going to take a few days to think about it and discuss with his wife, but he indicated that he's probably in. In anticipation of moving forward, I'm going to start working on the agreement. He does not want to form an LLC with me.. he wants to just give me money and let me do my thing. So I was wondering if someone can point me in the direction of a template or contract that I can use as a starting point so that I'm not reinventing the wheel with this.

Quote from @William Harvey:

Regarding the title docs...usually you can do a resolution agreement and have all LLC members sign it, which will allow you to be the only signer at closing.

That sounds great! The less I can inconvenience my investor with having to do anything (so that he can just the "money guy"), the better!

Quote from @Nick Coons:

@William Harvey

I verified with my lender that any member of the entity that owns 30% or more would have to sign on as a personal guarantor. I think that might be a deal breaker for him, so that may dictate the direction we go with this. I have lunch scheduled with him next week, so we'll go through the options at that point.

Actually I misunderstood this and clarified the point with the HML. Anyone that owns 30%+ of the LLC needs to sign on to the title docs. But for the personal guarantor, it can be anyone (even someone not associated with the LLC), so long as they meet the lender's requirements of a personal guarantor. So it looks like I can create a 50/50 LLC with my potential investor without him needing to sign a PG.

@William Harvey

I verified with my lender that any member of the entity that owns 30% or more would have to sign on as a personal guarantor. I think that might be a deal breaker for him, so that may dictate the direction we go with this. I have lunch scheduled with him next week, so we'll go through the options at that point.

@Ramandeep Sidhu

All sound advice, thank you!

Thanks for your reply! I hadn't considered a specific project management fee. I figured I'd "hire" myself into the company and be paid a wage/salary for my contribution. So I guess it's the same thing, just line-itemized differently.

Yes, I'll definitely want an operating agreement. My plan is to keep it fairly straight-forward. I don't want the investor to do anything except give me money. :-) I don't want their input on what to buy, how to do the rehab, which buyer's offers to accept when it's up for sale, or any of that. That's not their area of expertise. They're just providing the cash and getting a reward for making the project possible.