All Forum Posts by: Rob S.

@Jonathan Perez Our procedure is to send the estoppel certificate once offer is accepted - during our due diligence period/inspection period, and of course your agent sends it to the listing agent for execution by the tenants and there is a section on the form that the current landlord/seller must sign. And our purchase contract would have a language in the additional provisions section that estoppel certificate will be part of our due diligence.

Google "estoppel certificate" or "estoppel agreement" and let your agent know that you would like to have one signed before closing. The estoppel certificate will save you from misunderstanding with the inherited tenants regarding ownership of appliances or other personal properties in the units, as well as misunderstandings regarding amounts of security deposits or other he said- she said that may come up after closing when the current landlord is out of the picture.

@Bin Chen So far we have been blessed with great appreciative tenants but if we had a tenant that makes unreasonable demands, we would give them the option to let them out of the lease. Now, note that we are in Portland where the rental market is very hot and our properties rent out really fast.  Letting a tenant out of the lease in a slow rental market may not be a good idea.

Consider sending out a hvac technician to check the heating system. Sometimes a little tune-up may improve the efficiency of the unit. 

And, your lease should have a provision that tenant agrees to accept the property in its' current condition. Note that tenant accepting the property in its current condition does not excuse the landlord from making repairs especially if the repair is a habitability issue. I however do not think that the energy efficiency of a dwelling is a habitability issue, but I may be wrong. Check your local landlord/tenant laws.

@Jonathan Perez Make sure to have the tenants and current owner/seller sign an estoppel certificate before closing. All the best!

@Jay Hinrichs just wanted to thank you for your selfless service to humanity. You are a good man! Happy Thanksgiving!

@James Phillips We will be happy to help. You can ask any question you have here or DM. We can also have you out at our job site to witness work in progress

With MLS listed properties of a private seller, you may get away with POF upon offer acceptance (you will still need to show the POF if offer is accepted usually within 3 days of acceptance). If seller is a bank, HUD, Fannie Mae or Freddie Mac, you must provide POF with offer, and the POF is required to be dated within 30 days of offer date or offer acceptance date.

Now, if this was an off market deal, there is no POF requirement. But some sophisticated sellers may still ask for it.

If the property is your owner-occupied primary residence, the subcontractors(subs) are required to provide you an information notice called "Notice to Owner" found here http://www.lni.wa.gov/Forms/pdf/625054af.pdf

Considering that your project is a flip(purchased with an intent to resell for profit), the subs may not be required to provide you the notice mentioned above but the general contractor must provide you a different notice called "Notice to Customer" found here http://www.lni.wa.gov/Forms/pdf/F625-030-000.pdf

Assuming you paid your general contractor in full, you may want to try the following options:

1. Contact your general contractor in writing(certified mail with RR) demanding that he pay the subs and confirm that the subs removed the liens within 7 days or you would file a complaint against the general's license with the Washington Labor and Industries Contractor Licensing Dept.

2.  If option 1 fails, you may pay the subs by yourself with a written agreement between you and the subs stipulating that the lien will be released immediately upon payment; then file a complaint against the general contractor. To file a claim contact the L&I via this link

http://www.lni.wa.gov/Main/ContactInfo/TradesLicen...

Note that after filing the complaint with the L&I, you will still need to suit the general contractor in court and get a judgement in order to get paid from his license bond.

3. If you don't wish to contact the general contractor as suggested in option 1, then you will need to pay the subs to remove the lien, then file a complaint with L & I then court.

In the future, make sure to post a bold notice at the job site requiring all subcontractors, material suppliers and employees(whether employee of subs or general) to provide you with their names and contact information before starting work on your job site. When it's time to pay, request lien waivers from the general contractor for all subs, material suppliers and employees. 

Hope this helps

The US Environmental Protection Agency's mold guidelines outline when moving out is necessary depending on the size of the affected area, type of mold, the mold's effect on air quality etc. See https://www.epa.gov/mold

But since the tenants already informed you that they are asthmatic and considering that mold can cause irritation to the respiratory system, I would move them out immediately to be on the safer side.

@Miguel Feliciano I suggest that you consult a tax professional who is experienced in "LLC electing S corp status for tax purposes". To answer your question, when an LLC elects to be taxed as an S corporation, the LLC will remain an LLC but will be taxed as an S corporation. Even with an S corp election, your business will still operate as an LLC, nothing to worry about there but you need to understand the filing requirements of LLCs being taxed as S corporation which is why you need to consult a tax professional.

Here are some information on LLC taxation: If an LLC has only one owner, the IRS will automatically treat the LLC as a Sole Proprietor(disregarded entity); and if an LLC has multiple owners the IRS will automatically treat it as a Partnership. But LLC owners can choose to file an election for the LLC to be treated as an S corporation which is what you have done. There are benefits of an LLC election to be taxed as S corp including savings on self employment tax where only the portion of the LLC's income paid to it's owners as wages are subject to Fica tax(social security and medicare taxes) while the rest of the business income will not pay the self employment tax (social security and medicare taxes), as opposed to LLC being taxed as a Partnership where all the business income is subject to self employment tax. Another benefit is that owners receive W2 income which will help show proof of income to some lenders who insist on W2 income or make financing easier for W2 folks. Now, there are business owners who think that they can just decide to pay very low wages to owners to avoid paying self employment tax but remember that Uncle Sam is not stupid. The wages must be comparable to what people in that field are making or the business will risk getting audited by IRS. Also note that once the election to be taxed as S corp is made, the wages paid to the owners must be reported in W2s with all employee tax filing requirements. Again, your tax professional will need to look at the entire picture of your business and income potential before advising you if you need to revert the election since you are just starting out, then re-elect when you have big enough income for the tax saving to be meaningful. For example, if your LLC had zero income or low income in your first year of business, I don't see the benefit of electing to be taxed as S corp in the year in which you had zero or very low business income. Again, consult a tax professional

Find out if Miracle Method is in your area. They should be able to fix the crack

http://www.miraclemethod.com/bathtub-refinishing.htm