All Forum Posts by: Bettina F.

Originally posted by @Derrick E.:

I would have already rented it to her and would be making it rain with her year's worth of rent as I take her lump sum money and invest it into my next deal lol.

Risky and unethical.  Prepaid rent is a current liability.  She could leave the apartment before the year is up and demand the balance of her pre-paid rent, less any early termination fee.

Call the emergency contacts for tenant #2.    Check your local jail rosters to see if your tenant is in the pokey.  Document your attempts to contact.  Post a notice of suspected abandonment in the room door.  I would consider calling the police -- tenants often leave behind old clothes or junky furniture, but usually not expensive electronics.

Then box everything up and store per your local requirements.  Clean and re-rent.

We modified our emergency contacts form to include a section where the tenant gives the name of the person authorized to remove the tenants belongings in the event of "prolonged unanticipated absence" from the unit.

I have a move-in packet;  It is presented in folder with our business card.  All forms are printed with our company's logo and contact info.  Packet consists of: 

2 copies of our rental agreement,

SD and first month's rental receipt.  We prorate the second month, so this first receipt also states when the the second month's rent is due and the amount.  It states "The third month's rent, and thereafter, is due on the first for $XXX."

brochure on renter's insurance

maintenance request forms

move-out notification form

Form with code to common laundry room

"how to get your security deposit back" form that details how the apartment should be cleaned upon move-out and our charges for common damages

Move-in/move-out checklist.  We have the move-in condition filled out, tenant is allowed to make comments (they never do), then we both sign.  Tenants gets a copy mailed to them.  (move-in photos have already been taken)

We also put a magnet with our logo and contact info on the metal cover to the electric box.

Having this packet allows us to sit down and go over a number of things with the tenant at the lease signing. We set our expectations for rent to be paid on time, property to be maintained, that we will have yearly rent increases (but that we try to keep them reasonable), and that we want residents to be good neighbors. 

Even if you are using a pre-made lease, I strongly advise you to re-type the form into your computer.  That way you can add your company's logo and contact info.  You can type in the tenant's name on the forms.  It looks so much more professional.  It conveys to the tenant that you know your business.  I believe this heads off many problems down the road.

Originally posted by @Ryan Murdock:

@Patrick Philip

Sometimes it's not as drastic as a fire. If the fridge dies I will get you a new one but I can't guarantee it will be the same day. If you have $400 worth of steak, lobsters, and beer that spoil I feel bad for you ....

Beer spoil?  You don't know my tenants!

No hilarious tenant stories --- my stories are just sad.    Look in your properties dumpster on a Monday morning and count the beer cans.

I lived in Tacoma for 30 years and know that market well.

I would not worry about Port Orchard.  You are protected by the demand driven by the naval base.  The investors that need to be worried are the high flyers investing in luxury apartments in Seattle.  They will be the first and hardest hit.  (It is already happening in San Francisco).  If Boeing or Microsoft were to leave, the high flyers,  who lose their jobs, would move down INTO your apartments while the leaving the luxury properties vacant.   Class B multifamily did well during the '08 crash.

In my opinion, Washington is more  at risk by the Democrats in Olympia who want a state income tax.  Washington is only on the lists of "best states to do business" because of no state income tax.  Washington already has high sales, gas and property taxes and high regulation.  A state income tax would be the last nail in the coffin.

Originally posted by @John Park:

So, basically the 'left over' (cashflow) money does NOT have to be considered 'W2 Income' for lack of a better term. It can be utilized as capital without going through the 'tax wringer'?

 No, it is income and will be taxed at your marginal tax rate.   If you make too much in your investments, you will ether have to have extra withheld from your W-2 job, or make interim anticipated tax payments 4 times a year.  If you do not have enough withheld, you will penalized by the IRS.   Welcome to the  war on wealth in the US.

This is what we do. Our apartment building cash flows $4K a month. We are in the 25% tax bracket. We pull $3K a month out of owner's equity account (LLC), and transfer those funds to a non-LLC money market account. Of that $3K, we disperse 75% to the owners to spend as they wish, 25% stays in the account to pay the required quarterly tax payments.

Each year, our CPA estimates what taxes we will owe for the coming year (based on anticipated earnings) and tells us how much we need to pay each quarter.  Our CPA provides the forms to send in, we write a check and send the money.

When we do our 2017 taxes, we will either use the balance in the owner's money market account to pay any extra into the IRS (we usually owe a bit), or bonus the owners. 

Ask for a death certificate.

We had a similar situation when we bought our building. We did not have good documentation of move in condition from the previous owner, some tenants had no SDs. We did not collect deposits on the inherited tenants, just moved people out as we were ready to upgrade the units. We collected SDs going forward.

I would be interested in seeing a video walk-through by my PM.  We get 2-3 turns from a paint job, with only spackling nail holes and touch up paint with a Qtip.  We wash woodwork and trim down.  And how was the vinyl floor stained in just a year?  Is it just a little rust from washing machine feet, that will be covered by the next tenant's washer?

If these are legitimate repairs, I would charge them all to the tenant, but you first have to make sure your property manager is not exaggerating the condition.   Property repairs can be a big profit center for PMs.

A clean, fresh smelling carpet is a must, so the carpet cleaning charge sounds reasonable.