All Forum Posts by: Royce Talbo

@Donna Beth PerchI dont invest in NJ and I know its done differently there, but I am curious what exactly is a "tenant security account"? I never heard of it the way your describe. are you talking about an escrow account? why does it need to have landlord and tenants name on it?  From what I quickly read in the link above, seems like you just need to have a bank account that is govt insured and earning interest, doesnt have to have the tenants name on it, but you need to inform the tenant of account and rate the account is receiving.  I take this as opening a regular savings account and using it to just hold the tenants security deposit and informing them about it. meaning you shouldnt have to open and close the account every time the tenant turns over.  Ive heard in some states you need to have an escrow account, but doesnt seem like thats the case for NJ. 

@Jason Eisert not sure how it works never did mailers, but could you explain what you mean by hawaii authenticity and stamps from hawaii. I thought all stamps were the same as its a federal run thing.  by hawaii authenticity do you mean there is a return address from the mainland instead of hawaii? 

Quote from @Nicho C.:

Quote from @Royce Talbo:

@Nicho C. Everyone here has years of experience and are telling you to let them go. You keep asking the question of is it legal to hold them to the lease and add another ac. Does that really matter if the best option is just let them go? If you really want to know legalities I would contact a lawyer and not trust what the internet says.  

Am I not allowed to ask questions here? Before paying a lawyer to answer my questions? Ive read through a lot of other posts here on this site where the landlord simply added a window unit and wanted to confirm if that was a sufficient action for this scenario. I’ve gotten a lot of good feedback and will assess the next move. I’m not asking the question repeatedly I’m simply responding to multiple responses. But thank you for your feedback.

 Of course you are allowed to ask questions, its encouraged, but it seems like you made up your mind on what you want to do and not taking the advice given in the responses that you gave. it might not be the answer you were searching for, but it is the best route to take. 

Again if you are questioning legalities would you trust people who you have never met to give you legal advice and it turns out being wrong. what happens if they were wrong and you get sued? i would advise anyone asking any legal question to contact their lawyer if they are worried not just in this situation.

If you asked should i let them break the lease or keep them and try to accommodate them. or if you asked should i put in an ac for them even though they declined.  then i wouldnt have advised to talk to a lawyer. your questions where to legally stand your ground and are you legally obligated to provide a mini split. 

you already offered to put in a mini split and they dont want it.  if people dont want to stay its best to let them go because it could cost you a lot more than a vacancy.  also think about if you do put a mini split how much it will cost you and will add value for the next tenant when this one leaves at the end of their lease.  idk how much your rent is, but im guessing to install a mini split is more costly and would be several thousand vs losing couple thousand for vacancy? 

@Nicho C. Everyone here has years of experience and are telling you to let them go. You keep asking the question of is it legal to hold them to the lease and add another ac. Does that really matter if the best option is just let them go? If you really want to know legalities I would contact a lawyer and not trust what the internet says.  

@Chris Seveney I live in Hawaii and I'm looking to buy rentals in Michigan and do virtual wholesaling, so the business will be conducted in another state.  No I didnt talk to a cpa, but from my understanding to do business in another state you need to register your llc there and have a registered agent listed when filing.

When starting an LLC out of state it looks like i need a registered agent. The research I am coming up with is that there are registered agents that will take all your mail and scan, forward, or shred it(virtual mailbox service) but they nickel and dime you. The other is that they will not be used a virtual mail box and will charge a lot to forward. One was $15 per item. My main concern is I don't want junk mail like spectrum come every month that i have to pay to have them discard or forward it to me. How are you guys dealing with this or setting this up?

Can I use the registered agent as my business address in the out of state where Im doing business, but have mail come to a PO  box in my home state?

Quote from @Colleen F.:

@Royce Talbo  it could but when I used a system like this the amount usualy was  $25/50 so it didn't really impact who looked at the place. It actually is a good response to people who say it is a little high. You don't negotiate the rent so much as the payment timing. people like to hear the word you get a discount.

$25 is more reasonable, but @David Dachtera said $100 discount thats $1200 a year.  to me that is not worth it as i have only had 3 late payments in the past 10 years.  1 due to medical issues and forgot paid immediately, 1 due to covid and was a restaurant worker, and 1 because lease expired and they didnt update the autopay for the new lease. 

@David Dachtera  nice to know about the court thing.  Maybe because i dont have a lot of properties that I am in a different situation that I never had to deal with this or maybe its the difference in markets that i am not understanding this.  what exactly is the added infrastructure and expenses? does the expenses avoided actually equal the lost rent due to the discount? I understand that its written in the lease that there is a discount from paying on time or early, but this doesnt address the issue of either lowering tenant pool or losing $100/month.  was the $100 just a number you threw out or is that what they really use?  

sorry im a numbers guy, so ill give another example, please correct me or give an example of the numbers how it works out so i can better understand.  not sure what expenses this saves you from, but lets say this happens to 5% of your units and you have 20 units.  at $100 per month per unit, thats $24,000/year lost to avoid expenses. 5%(1 unit) of the 20 units fails to pay rent and you have to go through the whole process of evicting. is that 1 unit equal the $24k lost?

Quote from @David Dachtera:

You could even combine that with a strategy my former landlord (property manager, really) used to employ: The lease shows that the rent is $xxx, but if paid before the due date there's a $100 discount (incentive = positive motivation; late fees are negative motivation and are less effective).

How does this work? lets say your PM advertises a unit for $1500, then at the signing says $100 discount for early payment?  Wouldn't that lower your tenant pool if the market rent is $1400 and they are advertising over market.  If $1500 is market then isnt he losing you $100 a month? 

Its all about perspective. Money is just a tool. The number doesn't matter, just find what lifestyle you would like to live and be happy with achieving that.

Your 1mil is worth a lot more in Midwest than it is in Hawaii. Just like in real estate its all localized. In Hawaii 1mil net worth is nothing to brag about, as average home is worth about 1mil.  We have so many older people that have paid off homes that are struggling to keep their home that they lived in for 40+ years and still be able to afford medical, food, utilities, taxes, etc.  You couldn't go to the grocery store without bumping into someone worth over 1mil.  I know many people worth over 1mil but still work a w2 making less than 80k/year.  We could easily move to the Midwest where its cheaper and live a very comfortable life, just as you could move to Philippines or Vietnam and live like royalty if that's the lifestyle you want.  Don't get hung up on titles like millionaire, figure out the lifestyle you want and shoot for that.

Quote from @Richard F.:

This law states that "requiring rental conditions that are different for a person not participating in a housing assistance program" is discrimination. Yet, a typical policy for prospective tenants is that a Security Deposit must be paid within two business days, and Rent start date must be within 15 days of approval by LL, and prior to occupancy. How is it not discriminatory against non HAP prospects, when we are required to wait far beyond our "normal" time frames for these important milestones?

Thanks for the link.  I didnt see that there is any difference is time frame.  I know that sec 8 takes a few weeks or so to pay, but could you just hold them to the same terms as a regular tenant? Meaning they have to pay the same time as everyone else and when sec 8 check finally comes, you can refund them the money? If they cant then they are disqualified or they get charged with a late fee. 

Seems like everything will not change much besides not being able to list "no sec 8" for you.  When screening, exemption 1a and 1b says that you can deny them based on ability to pay rent, so treating them like everyone else and hold them to the 3xincome rule where sec 8 voucher now counts towards the 3x rule. For 1b they could still be disqualified based on credit score.