All Forum Posts by: Al D.

Was not a newbie landlord in general, but a newbie OOS landlord: Trusting a supposedly-vetted PM/turnkey provider to follow the minimum tenant-acceptance standards they claimed to their buyers/owners they follow was my mistake. Result: two defaulted tenants in less than a 12-month period (one eviction, the other painfully made it to the end of their lease - with personal guarantee of payment to me by the PM, after a dispute.) There was a 3-4 month’s vacancy between the two tenants. Now there is just over a month’s vacancy after the second one - still looking, but with a new PM that I found on my own. The new PM recently advised that, despite deep cleaning of carpets and painting, there is a strong (bad) smell after a few days of no open doors/windows - the new PM advised that when they first saw the property at the last tenant’s move-out, walls were filthy with grease and grime, and the carpet had food pieces in it and looked like it had not been vacuumed the whole duration of the lease (11 months.) I could expect this with some other (not turnkey) properties that I have bought in C class areas. This property is just over 10 years old, and in a class A suburban community, renting for over $1,200/mo. Moral: You must manage the manager. And don’t take it as a fact that someone has been “vetted.”

I am presuming that this is a long-term lease, rather than a month-to-month agreement. And there is still time (months) left in the Term. I would do nothing - assuming that both the girlfriend and boyfriend signed the lease. That way, they are both still responsible (to you) for all the provisions of the lease. Whatever agreement - if any - they had with each other is not of any concern to you. If the party that stayed can’t afford the rent on their own, you can still go after both. They may break up; they may get back together. Whatever... It’s called life. You have your own responsibilities that should have nothing to do with their whims. And that is why God invented contracts - after the concept of “Personal Responsibility” did not stick with the human kind. No reason for you to change anything because something happened on the other end. In other words: all terms stay the same. If you decide to do anything, it should be out of pure goodwill.

Ryan Jones , have you checked out the possibility of using a margin account with your stock broker? If you are open to that idea - which, as far as I know, does not put a large target on your primary residence - look into Interactive Brokers. I’ve never used them - and never used any margin account ever - but it appears that their rate on over $100k balance is lower than your HELOC rate. Like your HELOC, that rate is adjustable. Unlike your HELOC, I don’t think that the rate has a cap.

“Strange and sad coincidence?” Is that what the mafia calls it these days? I’d want to know who owns the rest of the block. Oh, and check your car brakes. I mean, get a flu shot.

I am not a lawyer, but can read a legal statute. I can’t (legally) interpret one for anyone. That said: I presume that the property is in Florida. I do not know in what specific jurisdiction - whether any local laws apply. Here is the relevant state statute: https://www.flsenate.gov/Laws/Statutes/2011/83.59 From the language in the statute, it would appear that you do not need any (3/7/x-days) notice. You should be able to march straight into the county court. My favorite part of the statute: “... and the court shall advance the cause on the calendar.” Additionally, per 83.58, you may be entitled to twice the rent for the period of lease-end to move-out. The statute does not say that you need to have this language in the lease agreement. I also presume that your lease is in writing, and that any pertinent notice(s) to vacate, etc. was given at the appropriate time and in appropriate manner - as required by law that I don’t think I need to go over. Whether you decide to do cash for keys or the court route, it may be a good idea to let the tenant know (in writing, like email, and with no unrelated fodder - stay on point,) that he may (1) end up owing you 2x the previous monthly rent amount, which would be enforced by court, and (2) whether you’ll be able to collect from him or not, he will have a judgement against him that should make it more difficult for him to rent anywhere in the future. So, before you offer him cash, offering him not to pay more should already count as a good offer. Give him a deadline to respond to you, like 8am, Wednesday, January 24, 2018, for example. And the reason you want everything in writing is to protect yourself from any allegation of threats, etc. - happened to me. Of course, in the end, there was no proof. And that tenant is now paying me. I did not even have to take them to court. Make them an offer they can’t (shouldn’t if they have a brain) refuse. The law is on your side - assuming you have followed it yourself. Not an attorney. No legal advice given.

I don’t know if you are comparing apples to apples between your own home and the duplex. I imagine that the two jobs are not identical. And Homeadvisor is just a reference source. Personally, I would not even mention it when getting quotes, unless you get a contractor via the website in the first place. The only way to know whether you are getting a good deal - unless you yourself are in construction - is to get at least three quotes from qualified and licensed contractors. Just make sure that the quotes are something more substantial than just “Repair X. Price: Y.” Depending on specifics, your contractors may tell you that there may be more to do once they start working on the problem - ask for best- and worst-case quotes of each prospective contractor.

Besides what Mike S. said above, a company whose sales plan of their “education” is partially built on how many paying “students” you bring in after yourself, is immediately not anything but an MLM-like business to me. I was invited to attend a meeting sometime ago - not yet knowing what company was behind it. Once I heard about the “pipeline” incentive to get my $20k “back,” I’d heard enough. My apologies to anyone who may be promoting/backing the company here, but - from its incentive structure, where you benefit, even if not directly - your words are immediately suspect to me.

Elsa Lapeze (I am in the middle of doing other things, and it took me two hours of interruptions to write this. Essentially, I agree with @Thomas S.) Firstly, assuming that there was no clause in your lease agreement about letting them out in case of a divorce, the decision is wholly up to you. I will assume that you did the right thing and had both spouses sign the lease at move-in - now they are both responsible for the debt (remainder of the lease term.) (Although, “shelter” in Colorado should be a joint debt between spouses anyway.) You did not say whether the wife, who intends to stay behind, has good credit and sufficient income (would qualify) to rent your place by herself. So, I’ll assume that she qualifies. Second, they can always make the “lease issue” a part of their own divorce agreement (MSA,) rather than involve you in a brand-new lease. What you’d potentially gain from resigning: 1. Another year of a paying tenant that would end in the middle of winter. 2. Goodwill from the spouse who stays behind - she may even re-sign again next year. Potential issues: 1. You’ll have shown that you are willing to bend rules - what will they (she) ask for next? 2. Potential inability by the wife to afford rent on her own while any (legal) agreement with her husband may be in the works. My personal recommendation: Either leave things as they are currently stipulated in the lease agreement, or create an addendum to the lease that says something along the lines of: “From X date, clause ‘Tenant(s)’ of the original lease agreement entered into on (date of signed original lease) by ‘Landlord’ (landlord’s name) and ‘Tenant’ ‘XYZ” (wife’s name) and “ZYX” (husband’s name) is amended to read ‘XYZ.’ All other parts of the original lease agreement shall remain the same.” You and the wife would sign the addendum. I am not an attorney - no legal advice given.

I don’t know where in PA the property is located - you should find out whether the specific jurisdiction has any specific rules (although, for the death of me, I can’t imagine some bureaucrat specifying that one must be “in arrears” vs being “late,” which would void your Notice.) about Notice to Quit. Here is the state law: http://codes.findlaw.com/pa/title-68-ps-real-and-personal-property/pa-st-sect-68-250-501.html I don’t know what else you wrote in your Notice (or from where you obtained it,) but imagine that if your tenant is upset over the one word vs the other, your form may actually be just fine. Tell them you’ll see their arrears in court, later.

It does not matter what any of us would pick. What matters is that you know what the pros and cons of each scenario you are looking at are, and - once you have compared all data - you pick the scenario that works with your goals. In general terms: 15% down is great - compared to 20% - if you are looking to leverage as much as possible. Is that your goal? But: 15% down compared to 20% down probably comes with a higher interest rate and (perhaps?) additional origination/points. That would mean coming up with more money than just the 15% at closing anyway, AND paying more per month for the term of the loan - make sure you’ll still have positive cash flow. But this point is where I do not have enough data. I presume that your 15% down loan will come with Private Mortgage Insurance payments - I expect that it would. Again, you must make sure that you will be able to cash flow with your monthly obligations. But since you asked: if I had the full 20% on hand and would avoid PMI and get a lower fixed rate for the next 30 years, I’d go with 20% down. It’s just me. Other people are all about leverage.