All Forum Posts by: Shawn L.

Meh... I'm not sure why you'd do this other than trying to prove to the applicant that you're smart or whatever. Why would you try to prove yourself to this person other than to stroke your ego? She could flat out deny that the man in question was with her that day, Kelly just needs to get her eyes checked. Arguing for the sake of arguing is petty and is just giving the applicant a reason to argue back. 

If it were me I'd reject her as vaguely as possible, and if pressed for additional information say that something came up in the background check that disqualified the applicant.

 Based on what is presented here the pm does not have a system. You really think it’s ok for a pm to refuse to give a breakdown of expenses upon request just because the owner hasn’t asked before? Seriously?

While you are correct in this statement, it’s a bit out of context since we’re not talking about a carpenter. We’re talking about a manager. A critical aspect of management of anything from a frozen banana stand to a region of big box retailers is reporting to those you’re managing for. If he sucks at paperwork it is his responsibility as a manager to delegate to someone who is capable of doing it, simple as that. You may think that your asset is performing well, but in reality you have no idea since you don’t seem to have any knowledge as to how much you pay in repairs, fees, do you even know how much interest you paid on the loan he got you?

Some responders have said that your expectations are too high due to your small scale. I agree that with only one building under management you cannot expect the same level of service that a larger landlord would get, however what you’re looking for is basic info that you literally need to file your taxes. 

If he can't even tell you what fees, maintenance and repairs you're paying, that is a humungous red flag. How does he know how much to pay you every month? Is he just guessing? I'll double down on my earlier post that I'd be looking hard for a new manager. In the meantime keep pushing him to get you the data you need. This is basic stuff that you need to file taxes but that's a whole different discussion.

@John Boland It's not uncommon for a PM to hold a small amount in a reserve fund, maybe a couple hundred per unit for repairs that arise. Sounds to me like your PM is holding all of your reserves? That's a hard no for me. Also the fact that he is struggling to produce reports would be very concerning. I'd be looking for a new PM yesterday.

Keep calling lenders. You’ll find one that doesn’t have the 2 year experience requirement. As far as I know that’s not a Fannie/Freddie thing, just an overlay that some lenders have.

I really think its more a matter of finding a lender that will calculate your DTI correctly. If your rentals are increasing your DTI, you're doing something wrong that you should figure out before you buy any more. If they're cash flowing, they should be offsetting their mortgage and then some.

As previously mentioned, different lenders have different ways of calculating DTI with respect to rental income. Some will require minimum of 2 years experience (which you seem to have, but worth mentioning) as a LL before accounting for any offset to mortgages. Some will simply use the 75% of rent roll. Some will base it on your tax returns. I have seen one that based it on tax returns but refused to back out depreciation deduction. Bottom line, check in with some other lenders. Not that I have any idea as to the specifics of your situation, but if you're cash flowing you should be offsetting your two mortgages and then some. Assuming you don't have a ton of other debt and your income supports your new mortgage, I'd be surprised if you don't get approved.

For a non-active investor, passive losses can't offset active income (i.e. w2) if you make over a certain threshold, but it is still a deduction against passive RE income.  

Hard to say for sure without all of the data, but make sure you're accounting for all of your expenses. Also make sure you're taking the depreciation deduction as well, should be a pretty healthy number. Assuming you're doing all this correctly, then yeah sometimes you just have to pay up unfortunately.