All Forum Posts by: Carl Dowdy

Thanks.  Revised....

• Some outlets may not be grounded, even if they appear so. Exercise caution for yourself and use surge protectors for your electronics.

That's a good point.  I'll look at adding some pictures and perhaps more inquisitive tenants. 

I just drafted a document I plan to post at my single family rentals (probably in a kitchen cabinet) that has contact info and some safety messages.  Part of it is liability mitigation driven.  To better help you understand my audience, my tenants are comprised of college students, strippers, ski bums, and kids burning through their trust funds.  Some of them are quite smart, some quite the opposite, but no one over the age of 25.  This is what I've come up with so far.  Any suggestions welcome as to things I've missed, shouldn't include, or could be better stated. Thanks! 

Emergency Contacts and Guidelines

• If something needs to be repaired or replaced:
  • Please contact xxxx, LLC by sending a text message to xxxx at 303-xxx-xxxx.
  • If you do not receive a timely response, please also try 303-xxx-xxxx.

• Fire, medical, or police emergency:
  • If it is an emergency call 911.
  • Please replace batteries in smoke and carbon monoxide detectors as needed and leave them and the fire extinguisher(s) in place. They are for your own protection!
  • In the event of a fire, save yourself, the house can be replaced.

• If there is a water leak, turn off the main water supply, located _________________________.
• The breaker to turn off the electricity to the house is located ___________________________.
  • The wiring in this house is original and the outlets may not be grounded, even if they appear so.  Exercise caution for yourself and your personal property.
• Take the time to familiarize yourself with the operation of the egress windows, even if your bedroom isn’t in the basement.
• If you see something unsafe please report it ASAP and let your roommates and guests know.
• Please remember it is your responsibility to keep the driveway and walks clear of snow and ice for the safety of your roommates and guests. 

My rentals are set up like yours and I have not run into any issues with obtaining and refinancing conventional mortgages. My leases, security deposit checks, bank account, etc. are all written under our LLC name rather than our personal names, yet title is held personally for the reasons you state. The bank asked once and I explained that I leased the house to the LLC and the LLC leased it to the tenants. When I'm done obtaining and refinancing conventional mortgages, perhaps I'll change the title. In Colorado LLCs are cheap and its worth it just to help keep things straight, but for asset protection I have a substantial umbrella.

With respect to the question about anything else to consider, be careful where the cash is coming from if you want to immediately pull it out with a conventional loan. In some instances it may seem like cash to you (e.g. cash you got from the cash out refi of a property 2 months ago) but some banks may view it as a loan and make you pay it back. That may be OK if it's "cash" you intended to pay back, like money borrowed from a friend, a HELOC, securities based lending,etc. As mentioned already, the buyer will see it as cash but the lender will likely want it all sourced.