All Forum Posts by: Rick Bassett

Hi Dan,

Two things:

1) We don't know if the owner-client agreed to this payment process in their PM contract as it is not attached, so it's a little hard to claim BS.

2) Read up on Tortious interference, it has bite.

@Steve Sayler you agreed to the cancellation fees as part of your PM contract, you just need to pay them.

Your PM was using something called pay near me/retail payments for collecting cash payments from tenants at the CVS. It’s a very popular system. Sometimes the timing of the payment dates can be a little off depending on if the tenant paid a weekend or holiday and when that major retailer posted the payment to the PMs system. This may be a timing issue and not incompetence, be careful before you start rattling the sword.

Lastly, I think the suggestion about encouraging the tenant to write a bad review about this PM is a terrible idea because you could get dragged into a business interference lawsuit for encouraging it.

I listen to RE podcast pretty frequently and Marco's was one of them I used to listen to up until a few months ago. 

I recall him talking about investing in Show Productions and me thinking what the heck does this have to to with RE investing? Then I heard the pitch for outsized returns, think it was around 15%, and then financing Show Productions made more sense when they are using OPM...not mine...seemed too good to be true...unfollowed.

@Leticia Ramos if this were me, I would only proceed if we had specified in our lease with them that this was an eventuality and that they had agreed to it by signing the lease.

If your lease is silent on this, then I would wait until lease renewal time and make those conditions part of the new lease.

In short, if it were me, I would not do that construction until I was legally covered by the leases. You can get all your permits in order before then so you’re ready to go, but you might have to wait a year to start the project depending on when those leases expire.

Myth: You never have to worry about getting your rent when you have section 8 tenants.

Reality: rent payments can get suspended if the unit fails annual inspection, even if the items that caused it to fail are the tenants fault.

Reality: the tenant portion of the rent is never guaranteed.

Reality: if a tenant wants to leverage you for an upgrade, like a new stove or a new refrigerator, they can cause housing payments to get suspended by filing a complaint with their caseworker.

Looking for some creative advice that hopefully minimizes the tax bite.

My business partner and I own two houses free and clear in our LLC. We each hold a 50% interest in the LLC.

The values of each house are approximately the same, and there are no loans or outstanding debts.

He wants to cash out so we thought a good strategy might be for us to sell one of the houses, and let him take all of the proceeds, and for me to take full ownership of the other one.

Essentially, I am looking to swap my half interest in one of the houses for his half interest and the other one. I’m going to hold mine so hopefully no taxes will be due on my end and he’s going to sell his and he will be responsible for any taxes on that one.

@John Michael Roberson - I wouldn’t get hung up on late fees, they are not a big profit center for PMs.

In our state, which is probably different than your state, the maximum late fee that can be charged is $50 . It costs us much more than that to chase a late tenant for payment.

As a PM I want to be able to turn over all rent monies to my owner clients on time each month as it helps them, and it helps us to retain them. The implication of picking marginal tenants to generate late fees is a stretch.

Alex, 

We manage properties in many CT towns and cities but the ones we see doing the best:

3+ bedroom rentals (usually SFH's): I like CT places with good school systems as families tend to flock to them and stay longer. Some of the towns & cities where our investors do well: Wallingford, Milford, Cheshire, Middletown, Cromwell, North Haven, Woodbridge, Orange, Shelton, Watertown, Newtown, Branford, Bethel, and Guilford to name just a few.

For 2 bedroom rentals: Good school systems may be an issue for some, especially for single parents but also proximity to employment comes into play as well so it adds places like parts of Hamden, New Haven, West Haven,  Bristol, East Haven, Stratford, Northford, Glastonbury

For apartments - studio & 1's: All of above plus Derby, Ansonia, Seymour

We don't go past Glastonbury as a rule so I can't comment on Hartford and north.

@Alecia Loveless many of the towns and cities in Connecticut have these things called Fair Rent Commissions.

If you raise the rent too much and the tenant brings a complaint to their local Fair Rent Commission. They have the authority to receive and investigate rent complaints, issue subpoenas, hold hearings, and order landlords to reduce rents for specific reasons.

It is better for us to move the tenants out whenever we take over a building that has rents that are way under market.

I've sold 3 properties over the years, I regretted selling the 1st so much that I bought it back 5 years later. I learned the hard lesson about taxes (fed, stat, recapture) on the 1st one sold, will not make that mistake again.

Didn't mind selling the other 2 as I was able to 1031 them into properties with better ROE.