All Forum Posts by: Rob Lehmann

Thanks for the responses everyone.

Just to clear things up, I have never directed my PM to not accept Section 8 vouchers and didn't even know that he was advertising for a vacant unit yet. It just went vacant and I had no knowledge of any of it really. It IS definitely illegal to tell tenants that we won't accept vouchers, and it sounds like the PM did do that. 

This could be a big problem.... Especially in Massachusetts. 

I've received my PM's lawyer's info and will be giving them a call plus possibly seeking out my own representation. 

I have to say, it seems ridiculous that I personally would be responsible when I've never directed my PM to do anything like what he has (allegedly) done. I've hired a PM because I don't know all of the laws, don't want to deal with the details, and trusted a professional to do a professional job. However, there's no sense in getting angry about what I think is right, at this point I just need to make sure that I am properly represented by ANOTHER professional that I am trusting to do a professional job. If my lawyer breaks the law after I hire him am I responsible for that too?

Thanks @Alex Cornwell, message is sent.

Anyone else have any good ones?

@Charlie MacPherson

"This is (or could be) a very big deal."

Oh boy... That's not what I was hoping to hear of course! I'm was going to ask my PM how he is responding anyway, but now I wonder if it would be okay to have his attorney write my response or if I should consult my own attorney now as well. I'm thinking it would be good to use his on the basis that two attorneys then don't have to collaborate, but then again maybe I want my own representation.

Thanks for your reply Thomas. Indeed, I read the literature and I agree it seems like there is no option in MA. I do hope the PM sorts this out himself, but it is worrying when I receive a letter addressed to me that is directly accusing me of discriminatory practices.

I have a PM in New Bedford that I'm not really happy with at the moment and I'm shopping around for others. I've done a few searches, but there just seems to be very little to choose from in a city that has SO many rental properties. Surely... SURELY there is a good management company out there! I'm out of the country for the next few years and need to have someone trustworthy and reliable.

Can anyone make any recommendations? 

I own a 3-family property in Massachusetts and use a property manager to handle nearly everything since I am currently out of the country. I've used this particular manager for 2+ years now and haven't received any complaints until now, but this one sounds like it could go poorly for me.

I received a letteryesterday from the MA Commission Against Discrimination. The letter is addressed to both myself and the property management company and alleges that the management company refused to rent the apartment to the complainant based on the fact that she wanted to use a Section 8 voucher. She made a complaint to South Coast Fair Housing, and they arranged independent testing to phone up and pretend to want to rent the property, and allegedly my management company told them that he is not accepting Section 8 vouchers as well. 

I've received the mail as if I am the one discriminating against these potential tenants. I've never told the manager I wouldn't be happy to accept section 8 vouchers, I have no knowledge of any of these tenants, and I haven't even been in touch with management concerning the property's vacancy. Now I am required to write and sign a formal position statement to be submitted to the MA Commission Against Discrimintation. Ugh....

My immediate questions are:

1. How much potential trouble am I personally in here? I didn't have anything to do with any alleged discrimination so can it really come back to me with a penalty?
2. Should I get a lawyer to craft my position statement?
3. Has anyone been through something similar and can provide a bit of insight into the process/procedures?

Beyond those questions, I was under the impression that to rent to Section 8 tenants my property had to qualify for Section 8. I've never gone through any Section 8 vetting, nor have I rented to a Section 8 tenant before. I really don't have any knowledge of housing vouchers or Section 8 tenants because this is my only property that would be considered by someone using a housing voucher so maybe I am just a bit misinformed. 

Any help you guys and gals can give would be much appreciated. I'm just a bit taken aback by this and am not sure the best course of action.

Sure you could get a private loan on your primary, but I have to ask... Why?

While I don't know your situation, it seems that the (generally much) higher rates would be a major deterrent. The only advantage that I can see is the lack of a credit requirement, but if credit requirement is what is keeping you from getting a conventional or FHA mortgage then maybe it's not a good time for you to buy. Furthermore, it would probably be difficult to do better financially than simply renting something until your credit is repaired if a lack of good credit is the concern. I would suggest the New York Times buy vs. rent calculator to do that calculation.

First off, hello Alexander! I'm based in Newport as well, and it's always good to meet fellow investors in our tiny state.

Others have touched on several points that generally apply, and I agree with all of what has been said. In this case, and with your location (which I know well), you may want to take particular notice of the advice given by @Michael Totman and hang on to the units until it's an opputune time to do otherwise.

I'm not sure exactly where your property is located, but if it is anywhere near the Naval War College then you shoudl make this change with respect to War College semester changeovers. Naval officers are by far my best tenants. Did you know that their superior officer will reprimand them if rent is late? Even if you aren't near the War College I think you should be more tactical about when you increase rent. If your gut feeling is correct and the rental increase will cause the tenants to move out then think about doing it when Salve, URI, Brown, etc. students are looking for housing, or maybe at the beginning of summer season (when housing is ALWAYS in high demand and people pay premiums for nice year-round rentals.

What I am saying is that our market is particularly seasonal. I've found that the time of year I list my units for rent has a huge effect on market price and demand.

@Chris Mason

Thanks for the information, you've confirmed much of what I had suspected but it is good to hear it straight from a professional. Much appreciated!

You made a great investment three years ago, congrats! 

From the information you shared, it sounds like now would be a great time to sell and take your profits. Why? Well to me there are a few reasons:

• You mention that you would like to relocate. Your property is already at a negative cashflow, and moving away would make that even worse. You'd almost definitely have to hire a property manager (taking 8-10% of gross rent) and you wouldn't be nearby to keep costs down on easy to fix items or even to shop around for cost-effective repairmen and contractors.
• There are 800 homes going in nearby. While this might not effect your property's value, it certainly could be detrimental. Lock in those capital gains while the getting is good. Waiting longer on the hope that the property goes up in value is pure speculation.
• You mentioned that you would like to grow your portfolio. That $160k of cash in equity could be deployed in your new locale on properties that are achieving positive cashflow AND capital gains.

To me it's simple, take your profit and make that money WORK for you instead of being a monthly bill (and headache) in an area that is soon to be far away from you.