All Forum Posts by: Mitch Kronowit

Greg, you need to get OUT of the fix & flip mind set if you're going to buy & hold. Renters just want a clean safe place where everything works. You don't need to repaint every wall in the latest designer colors, swap out granite countertops with all new materials, and replace every appliance with the current top sellers between every tenant.

If the tenant left after one year leaving you with nothing more than nominal "wear & tear", you're probably looking at touching up a few walls where they got scuffed (from moving furniture most likely), replacing a light bulb or two, and making some minor repairs. What would that run? A couple hundred bucks if you had somebody do it for you?

Also remember, if they don't return the premises to you the way they received them, minus the "wear and tear", damages and cleaning come out of their security deposit. I love returning my tenant's ENTIRE security deposit. It means they left the place ready to rent the day after they left. The sooner we get a new tenant in there, the sooner we start making money again.

Here's an excellent explanation of the Higgs Boson and how they "found" it. Don't be put off by the cutesy cartoon presentation, there's a lot of good science being explained here:

http://www.youtube.com/watch?v=3oBsUg2BzLU

Good to hear Roy!

Now, put it all behind you, get the place re-rented, and move forth.

This is my understanding based on several conversations I had with my attorneys and classes I had in business law. If you, yourself, install a porch rail on a property owned by your LLC, you are personally responsible for that porch rail since you have a duty to either build it properly or hire a qualified contractor to do it for you.

If you build a sub-standard porch rail yourself, that uncle, drunk or not, has a reasonable expectation it will prevent him from falling off the porch when he leans on it, and if it doesn't perform properly, you are on the hook personally. If you hire a qualified contractor to build the rail, and it fails, then the law suit will most likely be directed towards him, his license, and his insurance. Just what the heck is a court going to do to you? You hired a licensed contractor who is supposed to be the carpentry expert, not you. What more could you have done? Not much IMO.

Now, if either you or that contractor build a solid structurally sound porch rail and the drunk uncle still manages to fall over the top of it, the burden of proof will be on them. They will have to provide expert testimony that the uncle was injured or killed because of an inherent fault in the rail's construction and NOT because the victim was drunk and careless. Sure, the plaintiff's attorney will roll out the victim's widow and all the crying kids while trying to paint you, the evil landlord, as some callous greedy miser with no regard for human life or compassion, but the court will ultimately sort out the matter of law from the matter of fact.

Just be glad we don't live in North Korea. :-)

Forget your "reliable sources" and speak to a good asset management attorney. Are those "reliable sources" going to stand with you in court when your entity comes under attack from 5 different directions?

What kind of assets are you trying to protect? Can they be moved to Nevada or are they bolted to the ground in another state, e.g., a rental property?

If you're going to get into the fix & flip business, talk to a knowledgable attorney about the best entity to form. My guess is they'll recommend an "S" Corp in the state you'll be operating (even a Nevada Corporation will have to be registered in that state in order to be recognized). If you're looking at rental homes, a Nevada Corporation isn't going to do much for you unless those rental homes are in Nevada.

Duplicate post.

Thanks for chiming in John. We could certainly use more attorney's opinions and experience here on BP.

Are you saying hiring a property manager helps shield the property owner from liability? I haven't seen that listed as an advantage of hiring a property manager anywhere. I think it simply gives the plaintiff another person to sue. Sure, they told the PM about that loose step, and they never fixed it or told the owner, and somebody tripped and broke something, but the owner hired the PM, so they're responsible too, correct?

Quite frankly, I'm not too concerned with genuine torts. If I personally, as a fact, screwed up and caused somebody harm, then I have to take responsibility for my own stupid actions. However, what does concern me are frivolous lawsuits. Perhaps you can mention those and how best to discourage some greedy tenant and his ambulance-chasing lawyer from going after an honest, responsible business owner just because they have a little cash in the bank.

Thanks again.

Forget about number of properties per LLC and think "amount of equity". If you have 5 properties with about $5k in equity each, your LLC's net worth will be roughly $25,000. Not bad, but not exactly a great target for a greedy lawyer and plaintiff.

However, what if you have 5 quad-plexes each with $200,000 in equity? Should all 5 go into ONE LLC? I wouldn't recommend it (and neither would my attorney). He suggests forming a new LLC for roughly every $250,000 in equity that your property portfolio contains.

Just how many evictions do you plan to have? I've been landlording for well over a decade and have had ONE, count it, ONE eviction. That's not to say I couldn't have one next month, but there's a lot of people running around saying evictions are part of the business. That's like saying automobile accidents are a way of life. Sure, they happen all the time, to different people, and nobody is immune, but if you're not taking steps to make them a very small part of your own life, then you shouldn't be driving... or landlording.

Thank you for that Andrew Isaacs.

I wish I could vote you up 10x for that common sense post. You echo exactly what I hear from my own attorneys, one of which is a real litigator with actual court experience.

"Treat your LLC or corporation like a separate entity and so will the courts."

Hell freekin' NO! The only addresses I give out are my private mail box (for billing), the address of my resident agent (as required by the State for process of service), and the address of my LLC's general manager.

I try and stay invisible as much as possible. Of course, as Ryan said, if they really want to find you, they will, but why make it easy, and cheap, for them???