All Forum Posts by: Brian Smith

Hello,

I am seeking advice for a current situation I have found myself in. New landlord here, please bear with me. 

Questions for later: 

• Is the high level of activity an overreaction to a nonissue?

• Should I allow more than an extra month if it comes down to it?

• Do my decisions make sense to a seasoned landlord?

• How should I handle accepting rent payments for "extra" time?

• With the thought of court in the back of my mind. How can I best avoid such a set back? 

• Suggestions for improvement please.

Here is the back story:

I recently purchased a three family with inherited tenants occupying two of the three units. One unit currently being renovated. Both occupied units signed MTM agreements per my request. (I have not signed and returned a copy to the tenants) Within the past week or so while renovating the vacant unit, Ive noticed an unusually high amount of activity pertaining to one of the occupied units i.e. vehicles stopping at the property for short periods of time, the tenant leaving as a passenger in a vehicle, then returing on foot, different people coming and going on foot. Something seems suspicious... Fast forward to present day, the tenant in question wanted to pay rent for September. I told the tenant that I will be allocating their last months rent, that was transfered from the prior landlord, for the month of September and served the tenant a 30 day notice to quit (no cause). Quick side note, their last months rent is not currently in escrow due to the tenant not being able to provide identification. As you can imagine they were displeased that they were served a 30 day notice as they just signed to continue tenancy on a MTM basis. The tenant made the point to say it will be a difficult task to find new housing in 4 weeks and brought up the idea that the courts would likely let them stay longer. I explained that I would like to see them searching for new housing however if it came down to them needing an extra month we could discuss that as an option in the future, although it wouldnt be establishing a new tenancy.

Quote from @Barry Ruby:

@Brandon Buoniconti

Brandon, you don't bring a property to an investor or a lender, you bring them a well thought out transaction that represents an investment opportunity.

What you are describing needs a developer’s eyeballs on it to vet the feasibility and performance of the proposed project

 Thank you for the guidance. I will start making calls tomorrow.

Quote from @Colleen F.:

@Brian Smith   No experience but have you looked into Mass Housing and 40B if this is land in MA.    I don't know about grants but I think there is financing.  

 That's some great information. Thank you I will be exploring further!

Hello everyone,

I have 5 acres of land located in a city where housing is an ever growing issue. It crossed my mind that this would be a great location for an apartment complex. The city has been contacted and are very much in favor. Meetings are scheduled with city officials to discuss next steps. However, I do have a few questions as to where I should be looking towards next. I know one article of business would be sourcing capital. Its been brought to my attention that there are government grants for projects like these. Has anyone here used any grants on an affordable housing project? My hopes are that the BP community could provide me with some insight on grants and primary stages in a project like this.

Thank you in advance

This is all great information. I would like to thank everyone for their time. Richard F. that's a great idea, I will have them fill out a new application. Sometimes looks can be deceiving, the application will uncover potential issues if any. Thanks a lot for the idea!

Quote from @Bjorn Ahlblad:

The BP leases etc are custom by state and have been drafted by attorneys. Also if you join an REI or LL Association you can network with other members and get leases and support there. Hiring an attorney to come up with leases and forms is, in my opinion, a waste of money.

Thank you for the advice! 

Hello Everyone,

I hope all is well!  I just closed on my first 3 unit. The building came with 1 tenant who, so far, seems to be very courteous, clean, and pays on time. What more could you ask for right? With that being said, I still think it is in my best interest to have a lease signed by the renter. They're currently TAW. In the beginning I wanted to have an attorney draft me a lease agreement. Since then, I found the website called "EZlandlordForms" they have a variety of sections I can add or remove from the standard lease they provide. My question is: would I be better protected if an attorney drafted me a lease? Or should I utilize the basic agreements from the website and or the agreements that Bigger Pockets has available?

Thank you in advance

All the best,

Brandon

Henry,

I have the multi insurance through a separate agency all together. When I speak with the agent tomorrow I will ask, as you suggested, about specific coverage for my investment/operation. Another member David M, suggested I ask about an umbrella policy. Which to me sounds like a great option to satisfy my needs. 

Thank you for the great advice! I appreciate the time you've taken to answer my questions. 

I hope you have a great week.

Best Regards,

Brandon Buoniconti

Quote from @Henry Clark:

Definitely keep asking questions and learning.  There are many different tools.

1.  Clarify.   This is a 3 unit multi family you plan to live in one of them.      
2. LLC is one protection from liability to your other assets. Do you have other assets or revenue streams you're concerned with at this time? Can always move this property to an LLC at a later time.
3.  Your rental agreement and your operating procedures are your next line of defense.  Example.  Do you require the tenants to carry tenant insurance?  Do you put salt out after snow and ice?

4.  Insurance coverage.  Do you have the proper coverage?     Is this just a house hack or you also renovating?  Do you have construction insurance?

Recommend you make a list of every concept surrounding your type of investment and learn them.  Otherwise you will trip over them as you go.  

Sounds like a great investment to start with.  Good luck.  The education will be more

Valuable than the investment.  Congrats. 

Henry,

Thank you for your reply. 

As of right now, I don't have any big assets I'm particularly worried about. More so concerned about planning for the future. 

I do require tenants to carry renters insurance. It is a great added line of defense at no cost to me. As for salt after a snow event, yes maintenance and upkeep is a big thing in my opinion. Firm believer that it is better to be proactive than reactive. 

On the insurance side of things. Tomorrow, I'm going to speak with my agent about extra coverage. This will be just a house hack. The property is fairly modern. In my area the maintenance fees on an LLC are roughly $500.00 a year. I could add that money to my insurance policy instead. 


Thank you again for the advice. 


Best Regards,
Brandon Buoniconti

Quote from @David M.:

@Brian Smith

neither. Its usually not advisable to owning your primary residence in a LLC. Search around.. its discussed left and right on bp.

Your lender maynot care about the due on sale clause and at least pointed out that legal entities are not eligible for conforming resdiential loans. However, moving the Title around may affect your LLC's corporate veil. Lender doesn't care about your legal issues. The corporate veil is the whole point of the LLC which is a legal matter.

This is a much longer conversation about what do you want, and what sort of complication are you willing to put up with...   Definitely consult a few qualified professionals.

David,

Thank you for the prompt reply. I will consult a few local attorneys. I appreciate the information.

Brandon B.