All Forum Posts by: Scott McManus

Summary: we’re looking at buying a quad-plex with existing tenants. We need to raise rents for a decent return, and for that the tenants need to be evicted. What is a legal way in going about this?

There’s a quad Plex were looking at that currently has tenants renting below market. For the purchase to make sense, we would need to have those rents raised more than 10%, above California’s 5%-plus-inflation limit. Our thought (and the most preferable) is to buy the property without the tenancy agreements. We’re uncertain if this is allowed under California code, and I like to ask for clarity.

The issue with this solution though, is that the sellers would rather have them attached, in which case we’ll need to deal with evictions. The state is renter friendly, and the options for evicting must either be if family is moving in, if the agreement is broken, or to substantially remodel a unit (to raise rents). What would be options, then, to evict in order to of raise rents?

Investment Info:

Other buy & hold investment.

Purchase price: $1,050,000
Cash invested: $400,000

Air BnB single family home with pool, jacuzzi & spa. With 2nd structure a 30’ x 60’ 2 story steel structure to be determined what the best use will be.

How did you finance this deal?

Conventional 30 year fixed at 2.9% as my primary residence

How did you add value to the deal?

Rehabbed the house, pool, and Jacuzzi

self-directed IRA custodian American pension services, AKA APS, went into receivership in April 2014. Over 1000 of us account holders have had our accounts frozen and face 10% lean on the account to cover a ponzu scheme that a man named De Clerk, (The owner and operator of APS), was running with cash in our accounts.

I personally open my account in December 2013, had done my due geologist by running searches on the Internetand found only positive comments on APS. I then opened my account and transferred $110,000 to my IRA account, and made a $100,000 purchase of a six Plex apartment building in the name of my IRA with APS has custodian. Four months later I learned that AP has had gone into receivership due to irregularities, fraudulent handling of customer accounts.

In late December 2013, APS At myDirection transferred $100,000 from my account into escrow to purchase the apartment building. I left 10,000 in my account to cover Account fees and unexpected cost you to the apartment building management. I now face an $11,000 lena guess my IRA, to help cover theft De Clerk had perpetrated against other account holders years before I even open my account.

Beware of self-directed IRA custodians. Do your due diligence. The bigger ones operate slowly and are very bureaucratic, but may be your better bet.

Scott McManus, CPA, CFP