All Forum Posts by: Leonard L.

Two quick points.  One, as mentioned on many podcasts, always best to introduce yourself as property manager rather than owner, so that you can blame rent increases, etc. on the distant evil landlord while maintaining the relationship yourself with the tenant.  But that horse may have left the barn.  

Second, I would not tie the two together.  Their rent is simply low, as you state, compared to the rest of the market.  I usually pay for the carpet, but I also am not shy about saying, look, I did a market survey and your rent is X and average rent for this size unit is Y.  Which means your new rent is Y.  

This is how I do it.  My property manager and I agree on the new rent amount we are going to demand.  Property manager then sends a notice 60 days before the annual lease expires saying please check one box: either  (__) I want to renew the annual lease and I acknowledge the new rent will be $xxxx (the new higher rent amount); or (____) I intend to move out at the end of the lease.  We also include a market survey backing up the new rent.  The vast majority of tenants just check the box for the higher rent.   A few call and say I want to stay but at the same rent, and we explain that is not an option.  

@Skip Rivera Tax Title Services is one the re-insurance shops I mentioned above.  They are good and I have used them.  But again, they don't "clear title".  They look at the deal and decide whether to take re-insurance risk with the title company.  Most deals they will.  But some they won't.

@Jay Hinrichs 

@Skip Rivera 

@Wayne Brooks

Yes and no.  Yes, a tax foreclosure is supposed to wipe out everything junior in priority.  But no, that does not always guaranty clean title.   I have bought scores of properties at tax auction and I'm also a real estate lawyer.  Most of the time you can transfer title and get title insurance, especially if you wait one year after auction.  (Title company likes wait some time to see if anyone challenges sales.)  But I have had numerous instances, including one just last month that killed a sale, where title company would not insure.  This particular case was a deed of trust from 2008, which title company said was too recent, they would not take the risk.  

In those cases, you go to one of a few shops that basically issue re-insurance to the title company. They research title, which takes one or two months, and check all notices delivered as part of the sale.  In every one of my cases, they have been finally willing to certify the sale, which allows the title company to issue insurance.  However, I have heard of cases where they decided they would not stand behind the sale.  The situation above might result in one of those cases, where various people with claim to title probably will not be served with official notice of the sale.

So yes, usually you get clean title.  But yes, there is also a possibility that the title company might not be willing to issue insurance when you go to sell it.

I set up my self-directed vehicle through IRA Financial Group out of Florida, and they have lawyers that answer questions like this for me. From what I understand, any sweat equity can be a problem, because you are using your own expertise and work to benefit the retirement fund. That is why you are never supposed to self-manage the self-directed assets (even when not taking a fee). But maybe I have received overly conservative advice, so YMMV. Just sharing what I have heard, I am not an expert on these things.

I would be cautious about changing now.  The PM often has the records, and shows up as the principal witness (at least in CA, where I have experience).  You change PM, and who will tell the judge exactly when the rents were received or what were prior communications regarding pets.  Worse case, tenant brings in old PM as his witness that rents were not late and/or pets were OK.

Best to evict, then change PM.

Of course, half the time the tenants don't even show for CA eviction hearings, but if they do, you don't want to prejudice your case.

(Just sharing my experience; do not rely on as legal advice)

As others say, the market will dictate how much rent can be increased.  I find the question of HOW you communicate that increase to be just as interesting.  My property managers have developed a pretty smart system.  They send a renewal notice 60 days before lease expiration that says check one box - I want to renew my lease for another 12 months at $_____, or I do not want to renew my lease because I intend to move out.    The dollar amount is the increased rent and they include a few comparables to show how the market justifies that new higher rent.   A few tenants call and say they want to stay but at the same rent, but most just check the box for higher rent and return the form.

Tax sales just wipe out junior encumbrances, they do not guarantee clean title.  I have looked at tax auctions where there is a tax assessor number, so you think good conveyable lot.  But legal description contained phrase "one half of lot [x]..." which is a dead give away that this is not a legal lot under the Subdivision Map Act.  That means it is a crime to convey later, although the government gets immunity for selling it to you, of course.   This often happens when the assessor office creates a separate lot for tax purposes but the larger lot of which it is part was not legally subdivided.

Also, as pointed out above, tax liens, weed abatement charges, HOA, etc all usually survive. Plus even if title squeaky clean, most title companies will require that you hold it for a year before they will insure a subsequent transfer.

Caveat emptor.

@Thomas S.  That is certainly my greatest fear.  I hope that does not become common in CA.

@Stephanie Medellin  Some of this info in this article is not exactly correct, but here is a press account.  http://www.mercurynews.com/2016/09/14/new-law-protects-california-tenants-from-blacklists/

@Steve Nowak  Not correct.   Only if landlord prevails AT TRIAL within 60 days of filing the complaint, which is pretty much impossible.