All Forum Posts by: Tiger M.

A standard contract clause may not address a termination for cause so consider addressing it separately. PM has so many moving parts, its not if something goes wrong, its when. The most important part is how the PM handles the problems. If an owner calls me and says, I want to cancel because of a mistake made on the PM fault. I use common sense. If we are at fault (it happens, only Jesus was perfect), we remedy the situation and then they are fully released if not fully satisfied. It is important to protect yourself from bad PM and I understand that. I sign new owner accounts that come from bad PM horror stories more often than I would like. Call and speak to personal references and ask about the problems they have encountered and how they were rectified. Then build a relationship with the PM you select and stay involved. 

oh boy,.... here we go again with advice contrary to standard practices. Replace PM with mortgage @bill , to say "Keep Shopping" is like unto the proverbial hunt for Bigfoot.  PM as additional insured is a standard. So if a manager isn't sharp enough in standards of practice to ask for an additional insure clause, do you want that PM negotiating and writing your lease. Thats like calling a school crossing guard instead of the cops when your house is being burglarized. You worried about the lender subrogation as an additional insured? Lets not go down that rabbit trail. Here is the Realtor standard form clause: 

Owner’s Insurance. Owner shall obtain and keep in force adequate insurance against damage and against liability for loss, damage or injury to property or persons which might arise out of the occupancy, management, operation or maintenance of the Property. The deductible required under such insurance policies shall be Owner’s expense. Broker shall be named as an additional interest on all liability insurance maintained with respect to the Property. Liability insurance shall be in form, substance and amounts reasonably satisfactory to Broker, but not less than $500,000 (five hundred thousand dollars). Owner shall provide Broker with proof of fire insurance policies in force and shall obtain adequate vandalism coverage for the Property. Owner shall furnish Broker with a certificate evidencing fire and liability insurance or with duplicate copies of such policies within 15 days after the date of this Agreement. Such policies shall provide that notice of default or cancellation shall be sent to Broker as well as Owner and shall require a minimum of 30 days written notice to Broker before any cancellation of or changes to such policies.

I think @Derek Lacy nailed it.

@Pancham G.

The insurance policy price is quoted for the property and thats the standard cost to the owner. When an additional insured is added to the policy the rate dent go up. Its just like adding a mortgage company as an additional insured, its no additional cost. This helps keep the management costs lower for the owners.

The clause requiring full lease term payment is to protect the manager from doing all the work to get the tenant settled and then being fired by owners trying to get something for nothing. Usually the leasing fee is small up front to ease the owners cash flow and the company makes the balance over the term of the lease. It is usually safer to partner with a manager that gets paid when you do as opposed to just paying a one time leasing fee up front and then the agent gets paid and you may not have the greatest tenant. Remember, everything in life is negotiable. A good place to look for a solid management company is NARPM or IREM. Hapi investing.

I totally understand. I'm just trying to plant some seeds so you start off on the right foot. Good luck.

Chris- call anytime. I am happy to cuss and discuss multifamily in Vegas. You may have to view my profile to get a number or send a message. If I list a number the BP God  moderators will delete.

Get a family sized home, see below:

6661 /GOLDEN POND CR 1887 sf 3/2/2 built 1990 listed $155K, rents $1200

there are several of these in MLS right now

if you do a 15 yr loan with (20%) $30K down, payment is $917, assoc $75/mth, management is $350 for lease fee and $75/mth. Its tight on cash flow. in 7 yr you will have loan paid down to $70K. in 10 yr it will be paid down to $45K.

You will pay out of pocket in vacancy and turns, periods but run the numbers on your rate of return. If you support by $2000/yr, in 15 yrs thats $26K. $26,000/$160,000=16% annual return on your money. After 15 yr payoff its what? 55%? 

the joke is be a cashflow hog at the trough or the turtle smiling with equity and cashflow in retirement.

@Steve Kurschner

I hear good things coming out of SLREIA.COM from clients in SLC. I didn't have a picture for a long time, folks still liked me. :-)

@Ross Greene type the @ sign then the name and it will come up below the box where you can select the person your commenting to.

That info cost you a Quad Venti soy, marlboro, marijuanna  Mocha, , I get in the office at 8 so don't be late.

@Dave Van Horn has the longest track record. In fact most of the company principles out there have learned directly from Dave. Including me. If I was a passive investor, thats where my money would go. Its nice that you are close to him too.

david,

It doesn't matter that you live in the property and want to fix and flip. The question is how are you going to prevent the foreclosure and obtain clear title to convey to a buyer? Are you going to reinstate the loan? You may want to speak to Wayne Brooks here on BP.