All Forum Posts by: Philip LaRoche

Dave,

Thanks for the info. What you say makes sense. I appreciate it.

Phil

Hello everyone,

First things first, I am very new at this and I have never used other people's money for anything in the past. I have one investment property that is working well. That being said I have a business partner (other businesses)that is looking to invest with me in some RE.

He has been trying for some time to get this movingand I have been reluctant until I became more knowledgeable on processes. I have been reading many posts and how to's on the subject and I am now ready to dive in with his money an my sweat.

As I have read in the private money area the percentage breakdown can be pretty wide. That being said, I have not come across anyone who identifies a fair split or what can be considered to be an industry average. Is there an identified industry average for this type of activity?

The monies between he and I would be aloan to purchase a property that would be rehabbed and rented for 2-4 years. Depending on the market at that time the home would be either sold or continue as a rental.

The rental income would be collected monthly and held for a yearly distribution. That is our set up for the deal. I am looking to see what you think is a good split for the profits? He is fronting 100% of the purchase and rehab cost. I am handy and a good project manager to handle the rehab in addition I will also manage the properties purchased.

He is looking for me to do everything in the deal find it, calculate the costs and determine if it is good, then handle the rehab. He simply wants to invest his money and let me handle the rest.

Any advice would be very welcome and appreciated. I don't want to under value my part in the deal, but I also don't want to insult my partner.

Thanks in advance.

Phil LaRoche.

Hello everyone.

I have successfully purchased homes in the past, however, I have never used an attorney to complete those purchases. I am now looking at a short sale property  (as is deal) and I feel I have  a good understanding of the process, timeframes and so on, however, my main concern sits with the title and the title companies ability to find all liens and obligations against the property.  I am ok with the contract and my obligations outlined in the contract so an attorney would not be of assistance in negotiating a contract in my favor. Am I missing other items that the attorney would assist me with? 

Do you recommend an attorney to aid me? If so in what regards? I do appreciate your comments and advice.

Kind regards

Phil

Just a thought, I know home improvements are considered to be tax deductions if you can itemize and so is your interest if it is high enough. So renting to yourself would forgo the positives to give you what you are already entitled too. 

Some great conversations happen after a few New Years cocktails.

Happy New Years

I am not sure if you have this covered in your lease, but I have rented homes that dictated vendors in the lease. I recently transferred to NJ and I am currently renting as I check out the market here and become familiar with the area. My current lease requires me to pay for a chimney sweep if I wish to use the chimney. The lease also outlines that I must use a particular sweeper. So this ensured that I used an approved provider, and the landlord felt comfortable with the job performed.

As far as this case and the $500 bill, I would remind them of the terms in lease and split the bill. Half paid by you for the new disposal unit and half by them as a reminder that they have to follow the terms of the lease. I also agree with Marcia that you should not have them deduct from the rent. Instead send them the check so you have records for your accountant and the expenditure is clear for your taxes. 

Good luck, and Happy New Year.

Phil

Hi,

I have no opinion on the forced termination of the lease, however, you as the landlord should have a copy of the key. This will allow you to enter the property on the first day of the month after the tenant departed. You should be ok with getting in, I would recommend that you change the locks after each tenant, as you have come to see this tenant might be a little upset with you. If they kept a copy of the key they will have access to your property and can cause issues for you. Also it is a security issue for the new tenant when a new one is found. 

I would not worry about calling section 8 as their concern is for contract agreements and not relationships between tenant and landlord. If the tenant refuses to move or pay then call. If the tenant gives you lip but leaves I would put that to their personality and wash  my hands of them.

Best of luck in the New Year.

Phil

Carl,

I like the way you think, however, I do not think that will work in this case. But thanks for the chuckle!

Phil

Marcia,

Wow thanks for all the level headed ideas. I do have a good lease, it was drafted by an attorney that works in real estate. It outlines that anything more than changing a light bulb or the provided AC filters she is to call and not mitigate any damage on her own until we speak. I know her father and he mentioned that she was nervous about being evicted for the clogged pipe. I explained to her that those things happen and for about $125 I can have my plumber fix it. Now she knows that. I would be interested in those rules you have drafted. Are they separate from your lease? If so do mention them in your lease as a reference?

I should have mentioned it. I just found out last nightof the issues, and I have had plumbers and water mitigation services at the house today. I am waiting on photos of the interior of the pipe to see if there was concrete in there. The insurance will most likely pay for the water restoration service, but will not pay for the replacement of the sewer pipe from my property to the city line. That one I have to eat for sure. It is broken in a few places so patching it out. If one patch fails then I will have to redig and so forth. By the way I am not known for my good luck!  

Keep in mind I am green behind the ears as this is my first rental property and my first tenant ever. We aren't even a full 3 months into her lease yet and this is happening. Stories of bad tenants has kept me from taking the plunge a few years back when the market was real low. Now I am forced to rent as I like my credit score where it is and will not walk away from the house and I was transferred out of state for military service. The rent covers the cost of the home so long as the tenant does not do so much damage. I know I can keep her deposit, but that barely covers the deductible for any insurance claim.  

Thanks for the quick replies!

Phil

Hello all,

Let me begin by saying thank you for any advice on this subject.

I am new to renting property as the landlord. I have rented in the past and never have I ever come close to this issue.

My tenant moved in Oct 1 2014. so not long. I put in new contractor carpet a week prior to her move in date. The kitchen has been update and so has the bathroom.

Thanksgiving apparently she had a problem with the toilet where it began to back up into the tub. She tried the plunger, her step father tried a snake. Neither worked so they dug up the pipe outside. Mind you I have not been called on this issue yet. The step father breaks open my sewer pipe. As a result it breaks in more than the one place that he was not aware of. He then snakes it again and noted that there was concrete in the pipe blocking the pipe. Still I have not been called. He then makes a make shift patch and calls it good. Leaving the pipe exposed, the access cover off of the access hole.

A day later the toilet backs up into the house and is allowed to run for several hours flooding the entire house with dirty water. Still I have not been called for now either of these two major events. Mind you this was the weekend after thanksgiving. My neighbor and lawn service called me yesterday Dec 28th to notify me of the issues that they seen over the weekend. I called the tenant and she said she did not want to bother me at first and then she said she tried to call but dialed the wrong number.

Flash forward to today I have estimates over 10K for tear out of all portions of the house that were effected by the dirty water, and the replacement of the pipe. No estimate on the replacement of carpet, baseboards, or other misc items that need to be replaced.  

I want to evict and I think I am allowed to under my agreement with the state (HUD Home). I have an attorney helping me with the legal end of that. However, I am at odds with this because I will not get any money out of her if I do evict. The house is section 8. She has a job that pays minimum wage and she owns nothing. If I remove her then I may end up with a vacant property and the bills. If I keep her I am still collecting rent. By the way the house is still mortgaged as it was my families home until I was transferred out of state, and like many I am upside down in the house due to the date of sale in 2005.

So My question is have any of you had similar issues with tenants, if so did you toss them or keep them? Keep in mind if I toss her I get nothing. Even if the courts awarded me 100% I  still get nothing as 100% of zero is still zero. 

Any ideas would be helpful. I know that the estimates are just that and I can mitigate much of this work myself rather quickly for much less as I am very handy and have experience in this area.

Thanks again for your input.

Phil