All Forum Posts by: Toby Coons

Thank you both for your responses. I posed the discussion hoping for responses like this to lay out the reality of the situation going forward, whether we were wronged or not.

Dan, I agree on the fact that there’s not much of a case with the cleaning and dish. Our thought was since we are going through this exercise we might as well ask for the invoices to verify what was charged since our landlord was known to be extremely frugal and try to nickel and dime everything. 

As far as lawn, I’d like to pry a little further into your statement. I don’t think either parties have much of a paper trail for payments to the yard guy. Our thought though is that, since lawn maintenance is a tenant responsibility per the lease, he doesn’t have much grounds to charge for anything related to lawn (unless he tried to claim some sort of damage to the yard I guess). He did not at any point notify us that we were not fulfilling our obligation of maintaining the lawn properly so even if he did send over a crew multiple times to maintain it (which living there we saw no evidence of this), can he truly just pass that expense through to the tenants? 

Thank you again for your advice. I agree that at a certain point the hassle and cost of court isn’t worth our time which is why I am trying to get a pulse from the community on what we could actually expect as possible outcomes. 

Hello everyone, 

My roommates and I have run into a slight conundrum regarding our security deposit at a rental we just moved out of in Atlanta, Georgia. I was trying to think of who I could ask for advice and, since I do not personally know any real estate attorneys, BiggerPockets came to mind as the next logical spot to pose the question. 

A little background information is that I moved into a house last summer and for a security deposit, paid one month's rent ($4,000).  Per the lease it was the tenants' responsibility to cover lawn maintenance and water was to be paid by the landlord and reimbursed by tenants.

Although it was the tenants' responsibility to maintain the lawn, we worked out a handshake agreement that the landlord would continue paying his lawn guy and we would reimburse him for it. Roughly 4-6 months in (Let's say December), we settled up on water and lawn charges and wrote the landlord a check for ~$1,500 (~$1,200 water/ ~$300 lawn). At this time, we decided that going forward it would make sense for us to pay the lawn guy directly so the landlord didn't have to worry about coordinating. We have a text message screenshot showing this determination. 

Fast forwarding to moveout, we cleaned the home to a very respectable living condition and notified the landlord we would be out mid-afternoon. He stated that he was too busy to come by so just asked we leave the keys and he would come by at a later time/date. We did as he requested and, since I know people will ask, we made the mistake of not taking any pictures upon moveout.

The next week we received a certified letter stating his deductions from our security deposit. A rough summary of the letter is below.

Annual water expense:                                  $2500

Annual lawn expense:                                    $800

Total reimbursable expenses:                        $3300

Less December check for reimbursables: - $1500

Total reimbursables due:                                        $1800

Cost to remove sat. dish and repair roof/shingles: $275

Professional cleaning / trash removal:         $600

Total amount owed by tenants:                      $2675

Balance of $4000 dep. to be returned to tenants: $1325

Upon receipt of the letter, I reached out to the landlord asking to discuss the charges and state that we disagreed with some. He simply stated that these were pass through expenses or damages incurred by us. I responded that I understand but I would like to see invoices for all of the costs he is claiming (as they felt expensive and I drove by the house to saw that the dish we were being charged to remove was still installed on the roof) and am disputing the additional $500 of lawn expenses that seemed to appear out of nowhere ($800 claimed less the $300 which were legitimate and paid in December when we began paying the lawn guy directly).

At this point, the landlord went silent. 

I responded to his letter with a certified letter of my own describing our disputes and again requesting invoices for all deductions. I emailed him a copy of the letter and stated that I had sent via certified mail to the address we had just moved out of (since he owns the property and did not respond when I requested his home/business address). 

I sent a follow up text 20 days after move out asking if he had assembled the invoices. No response.

Fast forward again to today. We are over a month past our moveout date (I looked into GA law and it states the landlord has one month to return the check) and we have not received any sort of response or a check.

At the end of the day, he still owes us over $1,300 regardless of how he handles our dispute to the charges. I know that an option is to sign up for the case to be heard in Fulton County magistrate court but am nervous that he knows something we don't given his sheer silence and multiple years of experience as a landlord (I think he has had 10-15 properties for 10+ years so this isn't his first rodeo). 

Any advice on how to proceed would be greatly appreciated. Thank you all! 

Thank you all for the advice. 

@Brent Coombs, formalizing the agreement in writing is definitely something we view as necessary. I guess that would be our first lesson in contract law.  

@Andrew Bauer, that is a very good point. We have simi;lar strategies in mind but we would definitely need to think through all the possible scenarios and how we would handle each one if it arose. This is very helpful. 

Does anyone have insight on how financing something like this would happen? Like i said, neither of us can afford it on our own but will a bank allow us to count both of our salaries when qualifying for a loan?

Hey guys,

I am a recent college grad who has spent way too much of my hard earned cash on rent already and I am hoping to get into real estate investing with my first purchase. My question is: Does anyone have experience partnering with a friend/ roommate on a 4 or 5 bedroom and filling the rest of the rooms with other friends? 

Our background is that we have been living with a third roommate in an apartment for  year and are looking for a new place/ possibly want to buy. We both have solid jobs working in the financial industry and view this as an opportunity to diversify our investments while learning a lot along the way. The idea would be buy a house with needed rehab, live in the house for 2-4 years in our mid twenties, and then hold it long-term for rental income as we move on to smaller, more "grown-up" homes.

Below are my pros and cons but I am looking for any feedback on other things that I may not be thinking of:

Pros - 

1. Both ourselves and our friends can save a lot on rent and we have locked in tenants for the first 2-3 years along with two strong networks of potential tenants once we move out.

2. The two of us are gaining equity as we learn the industry together.

3. We can afford to purchase a place in a safer (location, location, location) part of town with both of our incomes. We are in atlanta and anywhere that a young professional can afford alone is extremely speculative and more than our risk appetites are hungry for. 

Cons - 

1. House prices seem sky-high right now 

2. We see some risk in the partnership/ roommate setup (advice from anyone who has experiences this would be greatly appreciated)

3. We are on a relatively short time-table (~2 months) to get into a new place but already have some houses in our sights.

Thank you for any wise words!

@Mike Watkins Does the Haves and Wants group ever have meetings on the evenings or weekends?

Hi Liam, 

Don't quote me on this but I think I can make some sense of your question. From my experiences dealing with real estate including foreclosures in Atlanta, the situation is a little more complicated than what you were told but still pretty simple. Before the housing downturn in the U.S. prices were hyper-inflated across the board mainly because banks were being incentivized to make bad loans, allowing your everyday person qualify for a mortgage that he truly could not afford. Because so many people had access to credit (the demand was very high compared to a normal supply of houses), values rose to artificially high levels. When the market crashed, values across the board crashed with it. In the present, mortgages are much harder to qualify for due to federal regulations as well as banks' appetites for risk so only the nicest homes (typically inside cities) can charge a premium.

If a second downturn were to occur in the U.S. housing markets, it is my opinion that the cheaper houses on the city outskirts would not dip as far a second time since they have already had a "reality check" in 2007-08.

I am just starting off in the industry, so if anyone with more experience could add to my response, I would love to learn more myself. I hope this helps, Liam. 

Thank you everyone for the feedback and the congratulations. It sounds like my goals in the short term will be as follows:

1) Small (but growing) emergency fund

2) 401k full match

3) Max out roth IRA

Beyond that I will either contribute more to savings or 401k, depending on how everything starts to pan out. Thanks again for all the advice! This thread was a great welcome to the boards and I look forward to learning much more from all of you. 

Hey everyone,

My name is Toby and, as the title states, I am currently starting my first job out of college. My question revolves around peoples' opinions on how to best prepare myself to invest in income producing properties in the next 3-4 years in regards to 401K v IRA v highly liquid personal stock portfolio.

I have read many posts on here referring to using self-directed traditional or roth IRA's as the vehicle through which to invest in real estate, but I am curious if I have not yet started a roth would it be better to start a post-tax savings/ investment account so that I can be ready to jump on a deal nearly immediately if one presents itself? I also read that when using an IRA, all expenses must come out of that account. I am not sure how this would work as a down payment may run the account pretty dry.

To give a few more details, my employer provides a generous match to my 401k so I plan to contribute the full matchable amount there. After that though, I am budgeting that I should be able to save ~$10k my first year (and hopefully increase that over the following few years) between either a roth or alternative investment options. As I am starting with a clean slate, how would you all attack my situation if you were in my shoes? 

Thank you in advance for any help and I look forward to learning more from everyone on BP!