Masking Ownership of Buy and Hold Properties from Tenants

23 Replies

I am planning to purchase properties to hold and rent. I am also planning to manage these properties with a separate property management entity. Is it best to try to prevent the tenants from knowing the name, address, etc., of the owner (in this case myself)? If so, what are the best strategies for doing so? Since I am a beginner, I will be handling all of the property management duties myself, without any employees. This means that I will be doing showings to prospective tenants, inspections, evictions and things of that nature. I will personally be in contact with the tenants which means they can look up ownership and most likely match me up as being the owner.

Thanks

Do a search here on BP for a few different past threads on the issue. Honestly there is no complete anonymity everything can be looked up somewhere and ownership determined.

Me personally I have no reason to disguise who I am and the fact that I own the property. If a tenant talks to me they know that I'm the end of all discussion. If they want to sue me they're likely going no matter who I'm representing myself as to them.

Now asset protection from legal action is a different topic all together, but still I personally have no reason for them to not know I own the property that they live in.

I would recommend using a Land Trust to hold the properties and possibly an LLC to manage or just a simple DBA when getting started.

@Sean S.

Best to identify now a good real estate CPA and discuss with them.

A buddy tells the tenants he works for the owners who are an attorney and local policeman.

Paul

Thanks for the responses. It never really occurred to me about masking ownership until I read several people hint at it recently. I just assume if you're going to do a lot of evictions you would be wise to keep as much of your personal information away from the situation but I do understand that most of this information would be in the public records. I will look into the land trust option and speak to a CPA.

Thanks again all.

I don't mask ownership! I also don't tell them I have x number of houses either! I try to be as transparent as possible without tmi.

Although I am the sole owner of my properties, I tell the tenants I share ownership with some partners and am responsible for the management. Since I'm relatively new to landlording (< 2 years), this gives me some breathing room when they ask questions. For example, if the tenant asks if they can do daycare in the house, I can tell them I'll ask my partners and then take a day or two to weigh my options. As I become more confident in my landlord decisions, the less I need to rely on this strategy. But it did come in handy at the beginning.

I generally don't tell them I'm the owner, I had a partner in Texas say he was scarred for his life after taking over a dilapidated property and telling some meth heads he was the owner. Generally, you should be fine either way, but it's easier to give them bad news when they don't think you can, by yourself, change what happens. It's easier to avoid sob stories that way, but there's a lot of debate on BP about that.

Medium apartment logoAndrew Syrios, Stewardship Investments | http://www.StewardshipProperties.com | Podcast Guest on Show #121

Hey, why be honest, right? It isn't like you expect the tenant to be honest with you.

Why let them contact you directly if they have an issue? It isn't like you expect them to say something before they run to code enforcement or the local fair housing organization.

Why not hide behind a corporate entity and claim that, "I'm not the owner, this LLC is"? It isn't like you would object if a prospective tenant's pay stubs were all printed up at home, from an LLC of which they just happen to be the sole owner.

AMIRIGHT!?!

Trust between a tenant and a landlord is peculiar topic.

In my mind, the tenant must earn the trust of the landlord (through credit check, background check, verification of employment, verification of current residence, etc) before the landlord can trust the tenant with the landlord's property.

The only thing the landlord owes the tenant is that the landlord will abide by the lease and federal/state/local laws. As a landlord, I am not going to share by credit history and background with the tenant. I will not share my income, past residences or current address (unless required by law) with a tenant.

Each landlord can decide for themselves what they want to share with a tenant. Richard C. can belittle those who use an LLC all he wants; even though he doesn't share his last name with other forum members.

I use an LLC. Two, in fact. But I don't pretend not to own them. And you can look them up in about 30 seconds on the Sec of St website anyway.

I have always thought it a bit strange that people will rent from a landlord, who has the keys to the place they sleep, without knowing anything of his background. But that landlord wants to know the tenant's complete history before trusting her with property.

That may be why a landlord in a town where I own a house was just arrested for threatening a tenant with a knife. A real prince of a guy, that one. Which everyone who actually knew of him was aware of, but of course not all tenants are that lucky or do that level of research. I wonder if he conceals who owns the place? I bet he will have to from now on!

The bottom line is you are engaged in a business relationship. A transaction. There is no "boss", only parties.

I treat people with honesty and respect, and expect the same. I will not do business with people I catch lying to me. Which means I wouldn't rent from many of you, frankly. And for that matter, if I know you habitually lie in your business dealings (as by concealing your ownership from your tenants) I will probably not buy from you. Or patronize your non-real estate business.

Some of us are funny about honesty and respect.

http://www.ledgertranscript.com/news/townbytown/peterborough/12180835-95/peterborough-landlord-charged-with-threatening-tenant-and-tenants-dog

This is one of those highly contested topics. Some people advocate for being transparent, some people advocate for hiding.

Personally, I am in favor of being honest with the tenants. I tell them if I'm the owner or if I'm a partial owner.

Yes, there's the excuse of not having to make decisions right away if you share ownership. For one property, I was asked by a tenant if they could paint a wooden shelf in the basement black. I don't want anything painted, so I said "No, I don't want anything painted."

An applicant was going through a place and asked if they could paint. I had just painted the place so I told them no.

Being a business owner means sometimes saying "No" and standing by your decisions. You can be friendly, but you're not out to make friends.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

Originally posted by @Dawn Anastasi :

Yes, there's the excuse of not having to make decisions right away if you share ownership. For one property, I was asked by a tenant if they could paint a wooden shelf in the basement black. I don't want anything painted, so I said "No, I don't want anything painted."

LOL, you mean you didn't fell the need to consult with your partners? :)

Originally posted by @Richard C. :
Originally posted by @Dawn Anastasi:

Yes, there's the excuse of not having to make decisions right away if you share ownership. For one property, I was asked by a tenant if they could paint a wooden shelf in the basement black. I don't want anything painted, so I said "No, I don't want anything painted."

LOL, you mean you didn't fell the need to consult with your partners? :)

On this property I do have a partner but we had already discussed ahead of time, no painting, no smokers, no pets.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

Originally posted by @John A. :
For example, if the tenant asks if they can do daycare in the house, I can tell them I'll ask my partners and then take a day or two to weigh my options.

While that is an option, and if you are married you do have a partner to talk things over with, so it's not an outright lie, there is another alternative. You could just say, "Let me think about that a little and get back to you." That gives the tenant the feeling that you are at least considering their request, and gives you time to seek advice if you need to.

I agree with @Richard C. about being honest with your tenants, but the belittling comments are completely unnecessary and tend to inhibit productive discussion.

Originally posted by @Sean S. :
Thanks for the responses. It never really occurred to me about masking ownership until I read several people hint at it recently. I just assume if you're going to do a lot of evictions you would be wise to keep as much of your personal information away from the situation but I do understand that most of this information would be in the public records. I will look into the land trust option and speak to a CPA.
Thanks again all.

Your assumption that you'll be doing lots of evictions is disturbing. Eviction is a failure of the landlord to properly screen tenants, or set the rent at a point where you get good tenants not someone desperate. In 17 years, starting with 6 rentals and now with 12, I've only had one eviction and he was inherited. All my tenants know where I live.

I think it is safe to say eviction is part of the business of being a landlord. While it is true that you should be optimistic about having a low tenant turnover rate, I think it would be naive for me to not prepare for the worst. I commend you @Johann Jells for only having one eviction in 17 years and would hope I have a similar experience.

Originally posted by @Sean S. :
I think it is safe to say eviction is part of the business of being a landlord. While it is true that you should be optimistic about having a low tenant turnover rate, I think it would be naive for me to not prepare for the worst. I commend you Johann Jells for only having one eviction in 17 years and would hope I have a similar experience.

Preparing for the worst is not the same as assuming the worst. And turnover rate has nothing to do with evictions. My 1st 6 units are samll 1 bedrooms that are typically "starter" apartments for young people just out of school, often living with their partners for the 1st time. They usually stay from 1 to 4 years. Recently a couple was reluctant to tell us they were getting married and had an offer accepted on a nearby apartment. We were thrilled for them, we've had a number of marriages "incubate" here. And sadly just had our 1st breakup.

Maybe it all depends on your market, but landlording and slumlording are NOT necessarily synonymous!

@Sean S. what is your goal with the anonymity you seek with regards to evictions?

I ask because the evictions seem to be the driver for this, but I'm not sure what the underlying reason is. In many areas an eviction will be more difficult for a "entity" as opposed to an individual. This is due to a owner being able to represent themselves in an eviction, while a entity (LLC, trust, corp) must utilize the services of a lawyer. I'm not saying that is the case, you'd need to check in your area to find out.

It seems to me as if we are somewhat "debating" the validity of utilizing an entity, but not really understanding what the goal you desire is from that entity. More often the entity discussion is focused around asset and liability protection, but it seems as though you have a different desire here though that may be part of it as well.

This is probably not the right topic for me to be weighing in on, but hey, here I am. Based upon my experience, a lot of people have management companies in place because they want the benefit of owning and renting properties without the headache. They want to communicate with the management company only, not have tenants escalate things to them or have screening companies contacting them personally for references. That is their prerogative. Many corporate management companies look up ownership and contact the listed owner directly for tenant reference...probably because people LIE about it.....A LOT. So making it harder for someone to look up your personal name and address as owner is not necessarily a bad thing.

One option is to use a PO Box for the LLC that provides a street address instead of the PO Box number. Can a real Sherlock still find you? Yes. But they have to consult multiple sources to do it.

No company avatar mediumDorothy York MBA, TD Executive Realty | 414‑491‑4266 | http://www.tdexecutiverealty.com | WI Agent # 55562-90

If you are a landlord be truthful with the tenant because you want the tenant to be truthful with you. Most new landlords will try to hide behind an LLC, but anyone with a third-grade education can find you.


Joe Gore

Thanks for adding on to the discussion Dorothy Templer and everyone else for that matter. @Matt Devincenzo , my original intent was to receive help in brainstorming the structure of my investment business along with a property management entity that I would like to grow simultaneously. I agree that part of my original post is related to setting up separate entities but with a focus on how to keep ownership information as private as realistically possible. At some point I would like to have the property management entity reach a level to where I will have employees that will interact with the tenants. At that point I would rather not have a tenant be able to knock on the door of my home for whatever reason. Maybe the idea doesn't make sense. That's pretty much the reason why I posted to begin with. To hear different opinions.

In reading through your response I can see how the eviction process would require the owner's information to become public. Again, this was intended to be a brainstorming session and maybe it turns out that I shouldn't attempt to mask my information. Either way thanks for the response.

Originally posted by @Joe Gore:
If you are a landlord be truthful with the tenant because you want the tenant to be truthful with you. Most new landlords will try to hide behind an LLC, but anyone with a third-grade education can find you.


Joe Gore

Our properties are held in an LLC, but we wouldn't even try to hide our ownership. It's impossible in a small town anyway - everyone knows everyone's business. We had a fire alarm go off at our business last night (false alarm, fortunately) and one of the fire fighters said to my husband, "Hey, I hear you're buying Brad S****'s house. Are you going to rent it out?"

Gotta love small towns!