All Forum Posts by: Petur Karlsson

I bought a triplex at the end of April this year, inheriting all three occupied units, so far so good.

I honor their month to month lease until June, then plan to put the security deposits i received at closing into escrow accounts under the new annual leases i get with all of them.

I come to realize security deposit for the “oldest” tenant was not included at closing and neither was last months rent. The tenant moved in Back in 2006 and the previous owner proclaimed total ignorance and said he didn’t have the lease agreement anymore and never touched the security deposit, pointed fingers at KW that handled the lease for him.

My tenant gets a lawyer that procures the full lease from 2006 and clearly states the money provided for security deposit and last months with ex landlords signature… the tenant is now also saying his money should have been in interest bearing escrow account providing statements to him all this time.

The previous landlord clearly messed up and possibly doesn’t comprehend his own responsibilities. I pursue the realtor that sold the property and him, they basically say “not our problem talk to KW” (note the realtor managed other two units before so no problem there) so I do contact KW and they say they never touched the deposit never have never will, and can’t help me since they become legally liable if they do.

Now the old owner won’t respond to me and I need to get legal counsel on how to retrieve the deposit + last months rent. But first, does anyone of you have experience with something like this and could you provide any advice for me on how to pursue the case? I can try reaching out or have my wife reach out to the guy, but how would I compel him to pay back the funds owed?

He could be in a world of hurt if he failed to hold the deposit in escrow all this time, so by challenging us and forcing us to take the legal route, he’s subjecting himself to a whole can of worms that he’d prefer to not open. I just want closure on this thing, I want the landlord to man up and pay his dues since now I’m liable for that amount myself and that wasn’t part of the deal.

Any advice is greatly appreciated.

Thanks for your help everyone!

*Obviously i wont take your advice in place of legal counsel and you hold no responsibility towards me for expressing your thoughts on the matter*

@Nate Boykin

I could do October 28th or 29th, both locations sound great as I live in Doylestown. Please keep me in the loop!

@Nate Boykin

Sign me up as well!

@Nathan Leger

Honestly, JUST DO IT.

You’ve already done all the leg work of educating yourself so you are already dotting lots of i’s and crossing t’s. You know the risks involved and can take steps to mitigate them. Make sure your numbers on The deal are solid and that you intimately know the market you’re operating in. Build connections with anybody you can beforehand so you’re not scrambling for subcontractors in the middle of the projects. Make sure you have reserves and try to get private lending so you keep reserves on the side and don’t exhaust your liquid funds.

I bought my first BRRRR deal in Feb 2020, days before the covid lockdown, had an extremely difficult time finding subcontractors at anything but ridiculous prices, materials kept climbing in price, the rehab ended up taking months longer and costing $30k over budget.

Let me tell you I was chewing off my nails the whole darn time, wondering if we’d be plunged into a recession and if I’d lose everything…

Somehow, I still came out on top with the refinance topping my all-in costs by $35 - $40k and now have had rockstar tenants in there for almost 10 months. Now I’ve also got a triplex and a duplex (working on one of the two units, almost ready to market).

The biggest risk you can take is doing nothing and waking up ten years stuck in the same place, regretting the wasted opportunities. Let that put the fire to your feet and motivate you. You’re destined for more than the 9-5 !

@Michael Plaks

Hey Michael, I managed to qualify for the REP status in 2020, Nick Aiola is my cpa and was instrumental in helping me understand all the rules and requirements and he also filed my return with the REP designation.

His business is Aiola CPA PLLC, I highly recommend his services since I used his monthly email exchange subscription to constantly bounce off thoughts and ideas on everything real estate related within his scope of expertise, and let’s just say it saved me from A LOT of googling haha..

@Petur Karlsson does nobody have any input on this? I feel like investors don’t cover this topic much but maybe I’m just not looking in the righr places?

Hey everybody!

I've reached three rental properties, totaling six units. I have landlord insurance on all three, and require the tenants to have renters insurance. I operate them as a sole proprietor by the way.

What do you think about the idea of looking into the policy and cutting out some coverages to downsize the premium? Do you have any other tips when it comes to lowering insurance costs? After all, even $150 savings per month is equivalent to the cash flow from a single rental unit.

One thought that crosses my mind is that I probably wouldn't make insurance claims on small things like appliance replacements, since it will increase the policy premium(?) The tenants have renters insurance and their personal possessions are covered as well, and no tenant has a significant amount of personal assets in their units. Isn't it pointless for me to have coverage on personal property then? 

My last question: Do you have any recommendations on how to find great competitive insurance bundles? I now have three different insurance companies for my policies; Nationwide for home & auto - Windsor-Mount Joy for rental properties - Progressive for RV insurance. There must be savings on the table in negotiating everything into the hands of a single insurer. My insurance broker hasn't found a reason to bundle them all yet, but I'm interested in your take on the matter.

Thank you in advance for any thoughtful replies.

@Mike Kedziora

Before even reading the responses or contemplating the numbers on sale further, I’d personally 100% keep renting it out because that’s amazing cash flow.

If you sell, you incur closing costs, and taxes on profit, and it’s really hard to put that money to work on a comparative cash flow deal in this super hot sellers market.

Besides, you can tap into the equity using a HELOC tax free, possibly using it to invest in the next rental property, while retaining the original and the great cash flow / mortgage payoff and / appreciation over coming decades that you'll reap the benefits of.

OR

You could cash-out refinance and pull that money out tax free, Then use that cash to buy the next property. I’m all about buy and hold for the very long term.

Interesting question, I'm commenting and bumping this thread in hopes of you finding the answer and helping the rest of us with the food for thought.

Are you new investors or do you have multiple properties? I'm on my very first property and using Rentredi property management software and it's an absolute breeze. I'd rather pocket the 10% of rent and increase my return on the investment if it's just a small scale operation. I simply just went through the hoops to become a sole proprietor operating under a business name and portray myself as the property manager while interacting with the tenants, and because I'm using software with built in maintenance, rent collection, lease signing functions, etc., It takes no more than a couple of minutes a day on aggregate to deal with.

No offence, property managers, your services are essential to landlords, but it's worth consideration to do it yourself so you both learn the ropes and increase the trajectory of your wealth building, especially as a beginner.