All Forum Posts by: Ben Riechmann

Okay Linda I live in Ohio so I know this is a different state.  There are some rules that are very common for most but very some.  I think you said you live in PA or the rental is which is a commonwealth.  If you don't want to go to an attorney you may be able to get some of your questions answered by the clerk of courts, although they will be hesitant to answer anything legal.  They will be able to answer broad general legal questions in terms of eviction.  Now while you may be owed rent, just going to court and showing the judge the person living there is not the one on the lease and if you have someone that is a witness that can go with you should be enough to get the process started.  I have won all my court cases without a lawyer, but those were just evictions.  I would go in, harder I know because of covid, and talk to the clerk of courts, see what they say the rules are in your area in terms on someone not on the lease where the other has left.  You can just call, but much harder to brush you off if you are standing in front of them.

Ryan that is a great and smart question to ask.  The problem is that can be different for different people and goals and can change what happens if the market changes.  Not knowing your goals if you are going by rent if you can put at least 10% of your cash flow into a maintenance savings fund that you put aside while making money and then take that out when things need to be fixed.  Then be sure to put money back in so you are not needing to pull money from other places when x y or z happens. If you have a lot of cash, to begin with, I still like to use other people's money as much as possible and keep that cash in reserve and let renters or people in my commercial spaces pay off my investment.  Then have that cash to help if something big happens or use it if a really great deal happens and I can't find funding.   As you do more deals, if you really get going, the issue again becomes getting funding.

Having more cash in reserve is good if the economy goes south as well.   I invest in stocks as well.  A lot of them are overvalued.  Real estate has sold in some areas for very high prices due to low-interest rates and covid craziness.  Still lots of great deals out there.  But when the market goes south, as it always does, thats when you can get the best deals.  The most millionaires were made during the great depression, the second most were made during the 2008 crisis, and were people that had the cash out to make investments.  So someone better than me will probably can give you a more accurate percentage, but it will largely depend on your goals, risk level and what you want to do in the future.   For me though, as a general rule, I still like using other's money as much as possible and having as big a reserve as possible.

I saw a real estate investor paint the outside of their building a popular shade of grew and trim on the building a creamy white.  It made the building stand out on a street that was all brick buildings and really pop!  I think it added a lot of curb appeal to the building and if it was going for sale against the other buildings I think it would have a better chance of selling faster for a better amount of money.  Grey does not sound like a popular color, but if you look up popular colors with renters it actually stands out or at least the right shade does to make the interior stand out against other apartments that are doing white or beige interiors.  Now the question is, would that be a good idea if the brick building was on a street that wasn't a street filled with brick buildings? Also, another thing to consider is that once you paint it, you have to keep on painting it to keep it looking good and that adds more cost.  A buyer may like the idea of a non-painted building as it is one less maintenance thing he or she has to take care of.  As I farm areas though, I know that building in Cleveland heights does tend to attract more renters.  So painting may help with turnover, one of our biggest costs.

Hello Derrick. Putting your home in an LLC with a rental property is not a good idea as it can make a mess of things. Generally, you are creating an LLC so if you get sued they can't get everything you own. If they come after you can hit the LLC and your home is in there for something that happened at the rental, your home is now at risk. There are other ways to protect your home as well like land trusts and as you get into investing or even before then I recommend all people add umbrella insurance to their policies. I hope that helps.

If your ex is removed the lender will base the loan on what income you and you have alone.  If your ex gives you any income after you have divorced in a settlement they will talk that into account in debt to income ratio.  I help people with credit for free and it can be a sticky wicket on deals you signed together while you were together.  You will have to see what your lender wants to do with you just on it.  If you have good enough income and the lender does give you trouble about the change-up, you may want to talk to a mortgage broker to see if you can change out the loan that way.  There will be more options to choose from.  If you are worried they won't hold it with just your credit, they may hold it under a different rate.  The question is broad so hard to know without more specifics.  PM me if you don't want to go into to many details in the forum. 

A tree limb from one of my rental properties in Ohio fell and hit the neighbors roof and knocked down part of his gutter.  We both assumed it would fall under my insurance and I would have to take care of it.  However, It fell under an act of god in insurance terms.  I have had different things like this happen as I own many properties where the act of god applies.  I don't know how that would play out in a courtroom if the neighbor decided to sue.  You may want to talk to an attorney about that and try to keep conversation with that neighbor to a minimum as you could say something that could be used against you in court.  Now I had my workers fix the gutter and the part of the roof where that limb fell even though I was under no obligation to do so, as it helps to keep good neighbors especially next to rentals as they may tell you things the renters will not and that can be worth its weight in gold.  However, that neighbor did not start in an aggressive stance with me and was willing to file a claim with insurance to have the work done.  I would see if the act of god applies to damage to their area of the property.

Hello!  Don't know much about the products for risk mitigation.  I would recommend getting umbrella insurance over your regular policy to better protect yourself and it often makes the insurance company make sure you have the insurance you need to have that coverage as you are getting coverage beyond and above for a lot of different things when you add on Umbrella insurance.  That said, that does not mean you will have the coverage you need for fire.  We have had more fires and storms with global weirding or warming, and with that, some insurance companies have stopped caring about certain policies in certain areas or stopped selling insurance altogether in certain areas.  Having Umbrella insurance will help protect you from a whole lot of things that can go wrong for not a whole lot more money and is really worth it.  I first learned about it from someone who was not an investor who got it just in case something really bad happened while he or his wife drove and it was their fault.  If you are an investor it is even more important to have it and if in areas where different kinds of bad events can happen.  That said, really talk to your agent about your policy and then also look online for reviews about how well the company you have done payout when things went south for policyholders.  Some investors have gotten burned thinking they had good policies or their companies had their backs.  

Also, if the worst does happen.  Do know you don't have just go with the companies appraiser of damage.  You can fight a claim with an independent appraiser of the damage.  There is a whole group of appraisers that do this as a job nationwide and have saved people from getting shafted from their insurance company.

Quan Chau, I would talk to your lawyer about it and see if he would send a letter to the water department about it if they are not answering you.  Sometimes a letter from a lawyer with their law firm letterhead will get the wheels of bureaucracy moving.  Before sending that letter I would ask around and see if others are having the issue.  Having more than one complaint to go with that letter helps have more force.  But see if you can contest it with a simple letter if you are not getting any action any other way.

Hello Quan Chau.  Are you sure it's not... just kidding.  I have rentals in many different towns in northeast Ohio.  There is one town I sold the properties as the tenants would pay their water bills fine and then get hit with a huge bill like the ones that hit your tenants.  Not that large but BIG.  I don't think one toilet would cause one that large although it can do some huge damage to a utility bill.  Do you know if any other people in the nearby area are having similar problems with the water department.  It sounds like you did your due diligence in getting the meter checked and with the plumber.  Although it might be like a doctor thing, you may want to have another plumber come out for a second opinion.  If there does not seem to be movement on the meter, I would think it could be the water department.  It does happen.  If there are others in the area having the same issue, it is a good issue to bring up at a town council meeting.  We got some headway in the town I spoke of above.  If you do not hear of anyone else in the area seeming to have this problem and it does seem mostly just this house than I would try to figure out if there could be a leak in a wall.  That can cause a big bill and a lot of money down the road if that is the issue.  The meter thing seems odd that is not moving, which makes me believe it has to be a water department issue.

On helping with the bill, I have done that as a landlord.  The problem is, was this a one-time thing and this was a mistake you can get resolved?  Is this a bigger problem that will result in another huge bill next month?   Before deciding on how to help with the bill, I think it would be good if you had a clear culprit.  

Not sure if I was any more help than any of the others.  I have fixed up houses and do know that if watching a meter you have to watch it over a longer period of time.  So if the plumber is telling you that from one visit, that is not enough information to let you know if there is a leak in the house or not.  You want to check on water loss over days.  You may have done this then ignore this advice.  But checking it once a day would be wise to see how much change there has been.  If you don't know what to look for in terms of amount if you have a comparable rental with roughly the same amount of people you can compare it to or just your own house and see if there is a big change from day to day, this could help you decide if you need another plumber to take a better look.

Not saying this is you, but answering to hopefully help by answering more broadly. A seller often sees all the good things about the property while the buyer sees the problems.  As an investor, it is important to look at a lot of properties and make an offer on a few.  Only what you think they are worth considering what the cost of what it will take to fix them up will be and other things that will affect the deal.  Often your money is made in how good you do or do not do a deal when buying a property.  If you put in all the factors to make sure it will cash flow when you are done for a buy and hold or if it will give you a good profit for a flip so you can move on to a bigger deal that will help you with your short and long-range goals.  If they want more than it is worth for that property, tell them this is as much as you are willing to pay, whatever that number is, and keep on looking.  They may contact you back later on and take your offer or not.  On bank-owned homes, the bank would often laugh at my offer, I would shrug and move on with my looking and the realtor would contact me later to tell me they are selling it for what I offered or lower.  Same with some investors.  

If you really don't like the idea of moving on from the property, and there is another reason you want it, like you own others on that street then there are some other options.  Find out how they bought the property.  It may not be that they are overvaluing the property, but they were newbie investors that bought it online or some other way and did not know what they were getting into.  There may be some other reason they think they need that much money like to pay off a debt or reach some goal.  If you know the why in this circumstance, maybe you can come up with a solution that will not make them totally happy as they will not be getting as much money as they hoped, but some kind of mutually beneficial deal that helps out both parties so the sale does not sting them as much.  I figured out why two brothers needed to sell a house and I ended up coming up with another solution for them and saved me tens of thousands on a sale.  Getting this information out of people isn't always easy, but can pay big dividends and may make both parties happier.

More often than not though, look at a lot.  Make an offer on a few.  Keep looking.  Don't kick yourself on deals you didn't get as there will be others out there.  Don't be afraid to offer less than you think they will take, especially ignore realtors when they say they won't take it, as I have had them take it more than once.  A seasoned realtor knows you never know what will happen.  Good luck and happy investing.