All Forum Posts by: Steve K.

@Angela Powers you’re in luck in that Colorado is a landlord friendly state. You don’t have to give notice to enter your property and evictions are relatively quick and easy. CO landlord-tenant handbook is a good resource, find it online sorry I’m on my phone or I’d send the link. Sounds like they are not happy and had different expectations than what the situation actually is. If they’re not jumping on board with the schedule idea and aren’t immediately complying with all your terms and it’s a weird situation I would offer them the “happy clause” and allow them to break the lease and leave even though finding tenants this time of year is harder. Since it’s your home I would wait as long as possible maybe the spring if necessary in order to find a perfect tenant that is okay with sharing the laundry space, and get it all in writing and make sure everything is Chrystal clear up front. Sounds like you just got some grumpy folks who thought they were getting their own sweet pad but now feel like it’s not private enough. It could be tricky to find the right tenant since it’s a little bit of a shared space type situation, but they’re out there. Not sure if it would be possible to add another washer/dryer, that may be cheaper than missing several months rent and would solve the problem.

@Pavan Iyer Mortgage lender not involved in any leases I've seen nor would defaulting on the lease ever trigger a due on sale clause in my estimation but might be worth talking to your lender about that. Note that in the lease contract the system is considered personal property, not a fixture. I do know that during a refinance, you have to get the leasing company to temporarily remove the fixture filing/lien which they then file again after closing on the refi. 

There are many ways to structure a lease agreement and again each company has their own offerings. The most common term is 20 years, transferable to buyer during sale if the buyer qualifies and agrees, or can be paid off prior to the sale usually by seller. Some companies offer prepaid leases, where you pay all 20yrs payments up front (for a generous discount). 

Before getting too carried away you should check with a local installer and see what options they offer in your area. Looks like you're in Atlanta. I know Georgia has good net metering policy and allows leasing, just not sure how a deal would pencil out for you because it varies so much location to location. Creative Solar and Solar Choice USA are respected local companies, and you could check with the national leasing companies SunRun, SolarCity/Tesla, and Vivint however I don't think any of the big boys are active in Georgia although I could be wrong about that. 

Good questions @Pavan Iyer !

Each lease contract spells out the terms of default specific to the company. Generally they say something to the effect of "We'll come take the panels back and sue you for damages". Leases use a fixture filing which is similar to a lien. I believe it would be treated like any lien obligation. The company could send you to collections and your property would have a cloud on title until debt was satisfied, etc.

I do know the default rate is low because income and credit requirements are high to qualify. The lease payment replaces the electric bill, often with a lower amount, so from a cashflow angle it usually improves the customers position. I’d be curious to hear what the outcome has been in actual default situations. I haven't personally heard of any.

 Regarding the solar company defaulting: tough question. Every case would be unique but some new entity would probably acquire the assets of the company including lease contracts during bankruptcy proceedings/dissolution of the company, and the new entity might continue servicing it but who knows. It’s possible there would be some orphaned systems.

Here's a link to a sample of a lease contract, including terms of default (note that this is an old contract from a company that is no longer leasing, and every company will have their own contract of course): http://nitnelav.com/SunPowerLeaseSample.pdf

What is the monthly lease payment on the system? If it's less than the monthly electricity payment would be without the system (often the case), then the buyer should have no problem taking over the contract because they'll benefit from discounted electricity. I'd focus on that and use it as a selling point because transferring the lease contract is probably going to be the only option unless the seller can pay off the lease and end the contract. The buyer could demand the seller do that but doing so might make the deal fall through which would be a shame. They would have an electricity bill for the property anyway, so the lease payment isn't adding any new operating cost. 

@Markus Gomez Just to be clear, you're a licensed agent in CA and by "my broker" you mean your employing broker/boss/managing broker, correct? 

If that's the case I think she takes on a lot of risk herself, seeing as she is responsible for providing reasonable oversight into your activities and contracts.

As an agent it seems you run the risk of both conducting a net listing and having a conflict of interest in a dual agency situation. 

These types of activities, in addition to being frowned upon/punishable by the real estate commission, often lead to lawsuits which is why I believe most experienced agents avoid them. Case in point Horiike Vs. Coldwell Banker. Experienced agents and attorneys feel free to chime in here if I'm wrong, but I would think an agent partaking in wholesaling would be an easy target for a lawsuit. 

As an agent you're not supposed to have a conflict of interest in a transaction. Wholesaling is all about carving out as much of a middleman fee for yourself as possible. For that reason being an agent and wholesaling don't seem to go together very well fundamentally. 

I don't see the typical justifications working out for an agent, such as calling the commission an assignment fee, or claiming equitable interest by signing a contract, or advertising a contract not a property, etc. Whatever terms used, common sense tells us that those semantics are unlikely to stand up if you come under scrutiny. It's like getting busted for putting together a drug deal and then arguing to the judge that you were not dealing drugs but rather "facilitating the sale of a baggy" which just happened to have drugs in it. If we zoom out and look at this from a broad point of view, semantics aside, I think the real estate commission was created to protect the public from these exact situations where middlemen are profiting off of both sellers and buyers. 

It seems the safest way to pull it off would be to actually buy the properties yourself, not acting as an agent in the deal but rather a buyer, maybe not taking a commission on the transaction itself to be safe, disclosing that you are an agent and disclosing EVERYTHING, then actually have your name on title, and then sell. Basically just use your wholesaling marketing to find properties to flip. But then that doesn't really meet the definition of wholesaling, more of a quick flip, and you'd actually have to have the money to buy the property, so kind of defeats the purpose of wholesaling which is supposed to be the easy way to get paid with no skin in the game. 

But I'm not an agent or a lawyer or a wholesaler, so what do I know? 

@Javonte Hardiman  I hope the best for you and your business, and I sincerely mean that. 

 My point is that along with teaching wholesaling techniques, BP also recommends being licensed or having your name on title so that you're not brokering without a license which is illegal, as Brandon Turner writes here in his blog post from 2015 titled "Is Wholesaling Illegal?". It's worth a read and I believe it's germane to this discussion: https://www.biggerpockets.com/renewsblog/2015/03/2...

@Tina S. Exterior main panels are very common here in CO, with sub panels in garages sometimes basements or next to hot tubs. If the main panel is inside there is usually a disconnect outside for firefighters and you’re not supposed to lock those or exterior panels. New construction always has a main disconnect next to the meter or often as part of the meter if it’s a meter/panel combo which is also very common. As mentioned before you shouldn’t have to move the fridge to access the panel as NEC code requires unobstructed clearance in front and sides of the panel and it can’t be in a closet or crawl space or cased in by shelving etc. that restricts working clearance. I’d go with what the electrician is recommending and explain to the tenant that in any home there is an easy way to shut power off from the outside by design so first responders can make the scene safe in the event of an emergency. Even if there is no main breaker outside there is often a large knife blade type disconnect or if not it’s easy to just pull off the meter can itself anyway so if someone wants to kill power they have options from outside the home whether the main is outside or not.

@Mitchell Morwood $700?! You should get some additional quotes from other vendors. It should be closer to $100 first visit, $70 follow up. I would make the tenants split it. You don’t want to set the precedent that you’ll solve their pet issues and pay for their pets. They need to be responsible pet owners and pay for their flea bags. It’s part of being a pet owner to pay for stuff like this that comes up when you own a pet. Split the bill between the tenants. Their pet may not have brought in the fleas but who cares because their pet has fleas now, totally their problem. You didn’t bring the fleas in, why would you pay? We do this with poop in the yard too, because lawn care guys don’t want to pick up poop. If there is ANY poop in the yard when lawn care comes, EVERY tenant gets a fine. I don’t care if their dog was constipated that week or only poops in a different area or whatever the excuse is. I’m not interested in the blame game nor am I there 24-7 to police their pets. Let them sort out any and all pet issues on their own. It could be the neighbor’s dogs or a stray dog pooping there, doesn’t matter to me, tenants need to get in the habit of picking up any and all poop when they see it whether it’s their dog’s or not, or everybody gets a $20 fine, because it’s in their lease to keep common areas clean. Same principle for fleas. Their responsibility. Our PM explains all this up front and it’s in the lease along with the additional pet deposit and pet rent. Guess what, there is never any poop in our yards and we never get dragged into pet disputes. You can’t get sucked into being the one to solve pet issues. Next thing you know, you’ll be cleaning up their pets poop for them too. Definitely pass the bill on to them and explain that you’re running a business, not a pet charity. If you have to pay for their pet issues you’ll have to raise rent or adopt a strict no pet policy. People love their pets, and everybody knows that it’s much harder to find a place to rent that allows them (because pets cause damage as it is, even without having to pay for their fleas or whatever else), so they’ll comply with whatever rules you set as the landlord. They pay any pet related expenses and deal with any pet issues themselves. If they don’t, they can find a new place. But whatever you do, don’t pay $700 for flea mitigation, that’s way too high, definitely shop around a bit more.

@Toben B. Don’t paint the brick! Brick is such a nice low maintenance exterior surface, with a natural and neutral color by itself. Once you paint it, which is hard to do with a professional finish anyway, now you’re committing to repainting every few years. Plus the paint traps moisture in the bricks causing them to decompose faster and causing paint to peel easily. Most brick is not meant to be painted. As far as the other colors I would only paint if it really needs it. Probably I would touch up what you have as needed, as it’s an inoffensive neutral color scheme which is what you want, and paint all the trim white. It’s not your primary residence so who cares what color it is, paint won’t get you any more rent unless it’s peeling or needs it due to being an obnoxious color like purple. Even then, probably won’t get you more rent. But whatever you do, don’t paint the brick!

@Collin Nieman Getting your license and interning/ working for free for a brokerage office is a good option, although the main negative is you won’t make any money. You won’t have time to actually work as an agent as the sales cycle is too long so it’s unlikely you’ll close any deals, and then when things just get going for you it will be time to go back to school. Another avenue to consider that I would recommend is working as a carpenter or similar tradesperson. Gaining knowledge of the trades will be an invaluable asset for a career in RE, whether your goal is to become an investor or agent or even just as a home owner, you will use this knowledge your whole life. Plus you can sock away some decent cash doing it. Carpenters are in high demand. Get yourself in with a high end crew, you’ll learn a ton while making good money and having fun. Plus you’ll get in shape. That’s what I did in my early twenties and now I have an advantage of knowing what I’m talking about with contractors, being able to estimate repairs more accurately, avoiding money pits, advising other investors, or just being able to do the work myself when it makes sense.