All Forum Posts by: Steve Maginnis

Hello @Account Closed.  It sounds like you have little to no trust in this PM.  3-4 months in to your relationship, and that is understandable.  It can take time to build trust.  Are you questioning them making up work for their benefit?  I would assume if they are not fabricating issues, then tenants are reporting these issues. Do they make a profit from repairs?  Even if they do, it likely is not enough for gutter cleaning that it justifies trying to make up excuses to perform work. If the properties were in good shape when rented, you should not be providing drywall repair or anything else that should be tenant responsibility.  Most of our single family properties have tenants responsible for gutters also.  

I think you should have a frank conversation with your PM and express your concerns.  Let them know it seems a little suspicious that you get hit with repairs every month and ask them to explain from their perspective.  Maybe the tenant needs some training in what they should expect?  Make it clear to the PM that you don't want to do repairs that are not truly necessary.  Our threshold for completing repairs without owner approval is $300.  However, we typically let owners know when there are any service requests (unless they made it clear they don't want to be bothered with it).  This just gives them a head's up so they will not be blind-sided when they get their statement.  Even though it's not necessary, most owners appreciate this.  You could ask if they would do the same for a while, just so you will be in the loop until you have built more trust with them.  

It is rarely EVER a good idea for owners and tenants to be in touch with each other when a PM is involved.  The PM ends up being the bad guy/scapegoat every time.  Tenants may also use you for their benefit at the PM's expense, or vice versa.  If you let the tenant know or suspect you don't fully trust the PM, they will use that against you and the PM.  I've got some horror stories.  

I agree there is a certain amount of "Managing your manager", but you should work with them to build trust (on both sides).  If you can't trust them, you may need to find another manager.  If you go through several, the issue may lie with you.  I think it's healthy to question actions taken by your PM, but you certainly don't need to micro manage them.  If you feel you need to, then there's no need to pay them to manage your property.  You can do it yourself.  I know how things can look negative to owners.  Most of the time it's a coincidence that we get a lot of work order requests over several months.  I actually feel bad for the owners, because I can see that they may be wondering if we are taking them for a ride.  I try to be preemptive and give them all the information and proof I can provide.  If things are not going well, and I know it reflects negatively on our company, even if we did nothing wrong, I don't mind letting an owner go on good terms instead of trying to rebuild trust that may likely never come.  Best of luck. 

When you do speak with your PM, I advise you not be accusatory and get them on the defensive.  As mentioned, trust goes both ways.  If you have a PM who resents you, it may translate to sub par handling of your properties, even if it is subconsciously.  

Hello @Jonathan Trimboli.  In North Carolina, you do need to be a licensed Broker to manage for other people. I suggest you work on getting your provisional Brokers license first and working for another management company either full or part time for some time to get some experience before managing for others.  There's a LOT to learn which is not provided in books, and a lot of state specific laws to be familiar with.  Take a Tuesday morning and go down to eviction court and see what happens to Landlords who don't know what they are doing.  You can learn a lot from other people's mistakes, LOL.  Good luck. 

Hello @Colin M. I agree with what @Paul R says. Finding MF inventory in the Charlotte area is extremely difficult. I think you should try to find a way to make money with less desirable properties. There are so many investors looking to buy the "right" properties for them. Good location for solid prices. If you have the ability to rehab, then try to find C/D properties on the edge of better areas that need work and are priced accordingly. It seems most investors are looking for B properties. There is still a big demand for affordable housing. What about auction properties? There can be more risk associated, but also some good potential profits. Maybe make some good contacts here on BP, and try to get several investors to form an LLC and purchase a larger MF property together. Again, risk/reward... Best of luck.

Thanks @Ashish Acharya and thanks @Dominick Austria.  Good to know.  I didn't think about depreciation on the capital improvements.  That is a good option.  

@Anthony Wick, yes, I am depreciating over 27.5 years. I'm just trying to plan now.  Interest rates are low, economy is good.  If I'm going to cash out, now would be a good time to do so.  Plus, better to perform all the upgrades while funds are available than when/if there is a market correction and borrowing becomes more difficult.   The amount owed has no bearing on my scenario. 

Hello all. I have a fourplex that I only owe about $20K on. It is a C property and I've been owner financing it since I bought it 15 years ago. My understanding is that once I have fully depreciated a property, it does not make financial sense to keep it, but rather to sell and roll it over to another property. I had been looking forward to paying it off so I own it free and clear, and figured I would be able to sell to pay for my son's college, LOL. At any rate, I've recently thought about doing a cash out refinance on the property to pay for upgrades(central heat and air, kitchens, baths, etc.). My question is, is there some way to do this cash out refi (maybe by transfering the property from my current LLC in to the name of a new LLC) and restart the depreciation clock? I hope I've been able to describe this adequately.

Hello @Jacob Compton.  Welcome to the community!.  Best of luck with your first deal.  Everyone will give you some advice to address your questions.  You should do some searches here to find additional options for screening companies, software, etc.  I highly suggest you search online for your state's landlord/tenant statutes and familiarize yourself with them.  In fact, you should really get to know them very well.  Oftentimes, what you think is the right thing to do or even the fair thing to do is not always the legal thing to do.  It's a crazy business.  Common sense doesn't always factor in.   Post to your local BP forum and ask what addendums you may need to add to your lease package(Lead Based Paint, Maintenance Addendum, Bedbugs, etc.).  One more thing that may help when deciding on software.  Some states' Real Estate Commission website will list software companies that meet your states accounting requirements.  

It's always amazing to me how so many property owners use the blanket term "managing my property" to encompass everything associated with their property.  I've had owner ask if we cover the mortgage when the property is vacant or tenants don't pay.  Or if we pay for any and all repairs, cover eviction costs, etc.  As if their management fees would include all of this...  I have to hold back my laughter.  

The biggest issue causing strife between owners and managers is expectations.  Both parties should work hard to be clear about what to expect when working together.  Owners, don't be afraid to ask questions about how everything will be handled.  Don't assume if you have used one company before that all companies release funds on the 10th each month.  Ask.  Managers, don't be afraid to fully disclose everything to your prospective clients.  I would rather paint you a bleak picture of worst case scenarios, than to mislead you in to thinking we are perfect and you will have a brilliant experience.  I plan for the worst, but expect the best.  If you disclose everything and have it in writing, it may not keep an owner from getting upset when things go wrong, but at least they can't say you didn't warn them.  The term "shady manager", in my opinion, is withholding pertinent information or being misleading in order to lock owners in to a contract and then take advantage of them.  To what end?  for a few bucks?  And to jeopardize any reputation you may have and open yourself up to possible lawsuits?  It's absolutely not worth it.  

We keep late fees.  I used to split them and there's nothing wrong with that.  However, now we are running promotions of 5% management fees, and 30% leasing commission.  There is a good bit more work involved to collect late pays.  Yes, it would be nice financially if everyone paid on the 6th each month, LOL.  However, I personally like to keep my owners happy.  I would much rather keep a tenant in place rather than have it come vacant and have to go through all the marketing, showing, etc. again.  My financial motivation hardly comes from hoping tenants will be late.  

For the original poster, yes, I think your PM was being shady by not letting you know about those changes in advance.  Maybe they hoped you would not read the agreements.  I agree you may need to find a new company to work with.  Trust is very important in these relationships.  Bottom line, do your research and come up with a list of as many scenarios as you can think of and ask how your next PM would handle those scenarios.  Find out exactly what you will be responsible to pay.  Run some numbers and figure out what your overall management costs will run you and factor that in to your budget.  Make sure everything is in writing. Best of luck.  

Thanks for the feedback.  The title holder is still alive.  I have tried everything I can to reach out to family and ask them to have the owner call me, with no luck.  I'm actually driving to their residences today to see if I can speak with anyone in person.  I've even reached out to a private detective to see if they might track him down.  I have paid one of those whitepages sites to generate cell numbers for me, but that was a waste of money.  I think it will be better in the long run to try and track him down before we close.  If unsuccessful, I think it's worth going through the abandoned property process.  Yes, there are some risks, but I think it's minimal.  Who would want to pay anything for a 1960 2br/1ba single wide that has been set up on a permanent foundation with stick built walls, roof, addition and a huge hole cut in the side to open up to the addition?  Plus, there's no axles, tongue tires, etc.  I see no reason why I would not be the only bidder on the trailer.  So I'll take the risk and close before this process is over.  We won't invest a lot into the trailer upgrades until we own it.  I'll post details of my experience once the dust settles.  Thanks again.  

Hello all.  I am looking to buy a lakefront property with a circa 1960 single wide trailer.  The trailer has been completely enclosed and includes additions.  It's really in great shape for it's age. The property was purchased by an investor in February of this year.  They did a bit of work and are flipping it.  The problem is, they were not given a title to the mobile home when they purchased, and the courthouse is offering no help in obtaining one.  They say they only sold the real property.  Both the seller and myself have been working hard to track down the previous owner to have him sign over the title.  DMV states he had title in his name.  I have the VIN from the DMV.  Owner is unreachable.  

The seller feels they will sell the  property regardless and want us to buy it or step aside.  It's a good deal and we want the property.  Seller says they have some experience with this and that no one will ever question this in the future.  My concern is if we try to sell, refinance, etc. at a later date, the lender will want a title.  The lot itself is not quite worth the sale price, so the trailer has to provide some value in order to appraise.  I've been told there is a process in North Carolina where we have to send certified letter to the owner, then wait a while, place an ad in the local newspaper, wait 30 days, then file paperwork to show the trailer is abandoned.  Then I would have to go to the courthouse and buy it.  I'm told no one will try to buy it there because they can't move a 1960's trailer anyway.  Seems risky to me.  I don't want to be stuck paying thousands for a trailer I already possess.  

I spoke with a RE attorney, and he says there is another option.  He says we can file for a "Declaration of Intent" to have the trailer added as real property on my taxes.  This would show that RE taxes are being charged on it and not personal property taxes.  Still sounds a little risky to me.  He says most lenders will look to see that there are taxes paid so title must have been surrendered.  However, some lenders may ask for proof that title was surrendered.  

I  understand that in all likelihood nothing would ever come up if we do nothing.  I'm still concerned about when we go to sell it later. The buyer may not care if there is a title, but the lender may dig it up.  I don't even know for sure that the legal title holder won't come forward after we put thousands of dollars in to the trailer and say they want to move it.  Any advice on what we can/should do here?  Thanks in advance.