All Forum Posts by: Robert Gilstrap

@RANJAY SINGH  30K behind in collections means shame on you! You should have fired that PM long ago! You obviously have someone who doesn't know what they are doing. Fire them and get a new PM. Either get the tenant on a fast repayment schedule or evict them immediately. 

Next time you shop for a PM make sure you get a NARPM credentialed property manager with lots of experience AND someone who owns rental property themselves. 

@Jacob Allen cool thanks. I live in Cartersville so that would be super convenient. Haven't been to any meetups for investing in quite a while.

Be careful here; as entrepreneurs we all suffer from the fact we see opportunity on every corner. I actually own a property management company and I don't have everything I want in my software so I thought "why don't I just make my own software?"...then last week i couldn't get anyone to cut grass so I thought "why don't I just start my own landscaping business?... and the list goes on and on.

@Jacob Allen  Got an email list you can send reminders out? Wouldn't mind attending but looks like I was too late this month.

The answer really depends on your states landlord tenant laws and how that affects your ability to evict after acceptance of a partial payment. Many states do not allow filing in the month that you accept a partial payment because the law basically sees that as accord and satisfaction for that rental period. Your lease language also plays a big role here and should explicitly spell out how/if that can be accepted. 

Forgetting about what the law says it's the mark of an inexperienced landlord to accept less than the agreed amount and it's sets a terrible precedent.  Did you or did you not agree to an amount in the lease? The tenant certainly expects you to hold up your end of the agreement, why in the world would you even consider not requiring them to do the same? Certainly not knocking  what the RE agent Sam said here from California about people having hardships and maybe their car broke down but are you kidding me?!  Why is any of that your problem? Can you stop making repairs to the property if your car breaks down or you have reduced working hours? Of course not. This is a business and unless you want to learn some REALLY expensive and painful lessons you better start treating it like one (no judgement just tough love).

Not sure I agree that separating the holding LLC from the operating LLC is going to make a hill of beans difference but it certainly can't hurt. The reality is the owner of the property ALWAYS gets named in a suit. Think about the split there for a second. Holding LLC is the owner and operating is the property manager. Legally the operating LLC is acting as the owners agent by making decisions on leasing, maintenance, repairs, etc. So when a lawsuit comes any lawyer goes after the owner because the owner is almost always responsible for the acts of it's agents and employees. There are some complex structures to mitigate that for sure where the owner might hold assets in a blind trust with no control but you are a one man show and that won't ever pass the smell test to a judge.

Asset protection is all about risk tolerance. So you do what you can do. Every property in it's own trust or even layers of trusts with ultimate beneficial interest owned by a multi-member LLC. Strip out the equity using HELOC's so no equity is available to entice a lawyer in the first place; get good insurance, and only if you are literally expert in property management should you be managing units yourself. That alone opens you up to tremendous liability.

@Robin Liong  my company handles that area but I also know of several other great companies there as well. No matter who you choose interview them very closely, make sure they are NARPM credentialed, fully licensed and have a ton of experience because there is no substitute for experience in the PM business. I also think it's critical to have someone who is an actual landlord themselves so they not only know the PM business but they understand what it's like to be an owner having to make mortgage payments, keep expenses low, etc.  Let me know if I can help in any way.

Not knocking your post but at prices that low I can see bankruptcy in your future.

@Jay Hinrichs   I never suggested you should walk away from anything and unless you are a criminal looking to defraud others then there is near zero risk of ever going to jail.  One presumes that @Indy Smith is not a criminal seeking advice on an open forum as to how to commit fraud therefore anecdotal stories of criminal activity just don't seem applicable to me. 

Also when I spoke of deeding the property back under a worst case scenario I never inferred that you would be behind in payments when doing so.  We shouldn't operate from the presumption that someone is being unethical in their business dealings. What I said was if you got to the point where you couldn't pay then you should deed it back. The seller is usually no worse off than he was prior to deeding it to you. In fact he is arguably in a better position since you have made payments on time, improved his credit, made improvements to the property and either stabilized or increased it's value, paid down the principal, caught up back payments, paid the taxes, etc. 

I've never had one called in 26 years and I almost exclusively buy subject to. Do I recognize that it could happen? Yes, but the sky could fall tomorrow too but I still get up everyday.  I totally agree with you that one must factor that into their decision making when investing but buying subject to is a no-brainer for the most part. I've made millions off of them and helped people who were losing everything at the same time. When I take over someones loan they are thanking me at the closing table. It's a major win-win in my opinion.

Lastly, if you had 3 subject to's called for no reason whatsoever then I wonder what the rest of the story is and the details surrounding that because you are the first document-able person I've ever heard of who has had it happen.  

@Tyler Gibson  If there is a law anywhere that says if you can't make your loan payments then you go to jail I want to see it. Doesn't exist.  Now if someone is convicted of fraud or some other nefarious scheme in connection with a real estate transaction then that might land them in jail but not normal buying of property subject to or any other way.

@Indy Smith   Banks don't call loans due that are performing is the reality and another reality is everyone gives banks waaaaaay to much credit for knowing whats going on because they don't and they don't care (as long as the note is being paid).  Don't let anyone scare you away from Subject-to's; they are arguably the best and safest form of real estate investing out there and if you don't want the one you're looking at now call me and I'll take it or help you do it or partner and do it.

@John M.   Remember transferring property involves to things: transferring the deed which transfers ownership of the actual property and the security instrument (mortgage, security deed or deed of trust) which shows who is on the hook for the $$ borrowed.  In a Sub to the deed gets transferred thus giving you 100% ownership of the property but the underlying security instrument stays in the old owners name and you simply keep making payments. you now have 100% control with little to no risk since nothing is in your name (assuming you are smart enough to never own real estate in your personal name).

Worst case scenario if your world ends and you can't make payments or the loan is called due and you can't pay is deed it back to the seller and move on.