All Forum Posts by: Susan O.

Quote from @Susan O.:

An estoppel can be customized to include whatever information you want, but I would focus primarily on their lease terms. My basic guide and example is below.

Once you purchase, I would require all renters to submit to your application screening. Only keep the ones that meet your standards, then sign a new lease.

Your offer to purchase should include a requirement that the Seller provide all documentation and agree to sign an estoppel certificate (also called estoppel form or agreement). The estoppel is a form filled out by the tenant, then confirmed by the Landlord, then accepted by the Buyer. It's supposed to ensure there are no surprises after closing. For example, I often see Buyers purchase property thinking there is a $1,000 deposit but then the tenant claims it was actually $2,000 because they paid the last month's rent. How will you know? An estoppel certificate fixes this problem.

Some things it may include:
1. Tenant name, contact information, and address
2. Occupancy date
3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate
4. Are there any modifications to the written lease?
5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?
6. Current lease term (expiration date, month-to-month)
7. Current rent rate
8. Rent due date
9. Security deposit amount
You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.

Here is an example and explanation: Sample Estoppel

Some have a lot of legal jargon but this document does not need to be so detailed. This is an important tool for anyone buying a tenant-occupied property.

@Susan O., it isn't appropriate for you to even ask for that info until closing.

Since the seller doesn't have that info to give to you, just approach the tenants AFTER CLOSING and ask for it. If they decline, there isn't much you can do about it at that point. When their lease is up you can try again to get that info from them again in exchange for signing a new lease.

The one piece of info the seller will have for you is a list of occupants, that is on the lease along with the tenants. If it isn't on the lease, they aren't occupants. So, you can enforce the lease and boot any occupants not named on the lease. 

@Susan O., Not necessarily. A single member LLC (even with a new EIN) that elects to be taxed as a sole proprietor will not file it's own tax return. That is a disregarded entity. A single member LLC can still elect to be taxed as a partnership or scorp. This llc files it's own tax return. It would not be a disregarded entity. And not appropriate for a 1031 replacement. Your QI should have a handle on this. But I'm curious. What has their guidance?

Check with your QI, but generally the tax ID needs to be the same. Disregarded entities count as the same for single member LLC.

@Susan O., a disregarded entity for the purchase would be fine. The key is that the new property still be reported on the same tax return as the old property. Title can be different as long as the tax return stays the same. However, it's not just a single member LLC needed. It is a single member LLC that can include both husband and wife only in a community property state. and the LLC must elect to be taxed as a sole proprietor.

Quote from @Susan O.:

I was wondering what you all think are some good solid markets:

Rising Populations - Migration expected to increase

Solid strong economy. With different industries

Jobs Jobs JOBS long term

Good weather long term - despite global warming, temperate climates - I know CA is the only place with really good mediteranian weather, but I live here so wanted to buy oos.  

I was thinking Texas, Florida, West etc. Sun belt areas. Which specific cities look good for both GROWTH and some CASH FLOW or opportunities long term?

What do you all think about high cashflow (lower appreciation areas) like the mid west, MN, Upstate NY etc?

I plan to be expanding more into new markets. Mainly multifamily but could consider other ways too

 As you can see, reaching out with a really broad question about the best markets is going to get you all sorts of answers from the BP community. It seems to me that most investors think the market they know is the best market. It seems to me that you already have some clear criteria, why not start by narrowing down your list to metros that meet your weather criteria? Then you can further narrow your list by doing quick research into the projected job growth and top 10 employers. Finally, you can do a population check - odds are you'll have just a few markets that really stand out to you.

I saw some Minnesota folks here, and I'll be honest, I don't like that market at all. Politically, it's similar to East Coast with taxation and tenant rights. Additionally, the winter is up there with North Dakota for being brutally cold while summers are hot and humid. I'm skeptical of a lot of the primary markets in the Midwest (Detroit, Milwaukee, Chicago) but there are a ton of fantastic secondary cities in Michigan, Wisconsin and Ohio. Markets such as Madison, Grand Rapids, Columbus, etc - essentially markets small enough to avoid a lot of corporate real estate investment and competition that have low crime, strong population growth, amenities, and great high-income job growth

Quote from @Susan O.:

Quote from @Joe Villeneuve:

First, can you explain to me what the heck you're mumbling about in the first 4 lines of this post?

Second, if you're a smart REI, you're not choosing between CF and appreciation. You're looking for both.

Third, what makes you think the mid west down't have appreciation?

 obviously, not sure why you have to insult people though.. my guess is because you're from MI and the word low appreciation triggered you.  I'm just speaking based on data

  this is a forum we're supposed to help one another.  obv speaking in generalities as to mid west.  If you'd like you can defend declining rust belt 

Data and generalizations lie.  Markets are very specific.  Looking at data, and using a telescope to try to understand an entire large area of the country, means the observer is missing out on great opportunities.  What amazes me is how many people think they understand how to analyze a market, but they don't.  In the case of the Midwest, what you're (what word am I looking for here?  Oh right...) insulting by not realizing that property values are specific to their markets, and in no way represent a difference in the quality, style, condition, type or size of the exact same property...just a couple of thousand miles apart.
Are you aware of how many California investors flip there, and buy the same house in the Midwest as rentals?  That ridiculously high cost, for the same property in California allows for a small percentage of profit, but large number of dollars when sold.  Then take that profit and buy that same house in the Midwest, and you have the perfect scenario for CF.  This is a very common scenario.
That "data" you refer to, represents averages...which are made up of highs and lows. You're reading that data and you're painting the entire Midwest the color of "rust".  Not all markets are the same color.   My suggestion is to by in areas that are the color of "green".