All Forum Posts by: Carl Millsap

Tim, there are a thousand ways to skin a cat. We just installed 5 metal roofs. We left the shingles on, installed a paper barrier on top of the shingles then installed the metal roof. 

My maintenance guys who've done metal roof installs swore up and down we needed to place the 2x4 over the shingles before installing the roof. I called metal supplier who confirmed the only thing we had to do was install the paper barrier over the shingles which guaranteed the warranty would stay intact. 

Check w/ the roof supply company to see which method guarantees the warranty remains intact. We installed a metal roof on a property in 2017, not a problem with it so it's the standard moving forward. 

Nicholas here are a few things to consider:

1. What task do you want this person to perform in exchange for reduced rent? Put it in writing, have them sign it so expectations are clear. A minor repair is subjective that could be installing a toilet flap, changing locks, or installing a toilet? What the previous owners had him doing and what you want may be different. 

2. What is the cost of a property manager vs. 50% of rent? Consider you can get full rent for the unit, and have professional management. In either case you're still managing someone who is acting on your behalf.

3. If you keep him, is he an employee or contractor? Spell it out in the agreement, this has tax implications. 

4. If you keep him, consult a lawyer for the agreement, you're trusting this person to be the face of your company, your investment. What about a background check?

There is a lot to consider in this situation. 

Hello BP, 

We purchased an early 80s multifamily complex w/ a ton of upside but a bad history. The surrounding neighborhoods are single family homes $400K and up, close to shopping, etc. 

We've asked the police to pick-up patrols; we've identified and evicted most of the bad actors. 

We've renovated units, cleaned up the hallways, and work diligently to keep the property clean. Trust me it's a challenge, habits are hard to break for these tenants. 

When you google the address it's nothing but bad reviews. We've tried to claim the listing so we can reply and put under new ownership etc. but have been unsuccessful with google. 

We've considered changing the complex name, and even the street name since our complex is the only property on the street to distance our ownership from the previous ownership reviews.

We decided against the street name change as that would require the postal service update, and tenants to update their address etc.

How would you go about rebranding this complex? 

Thanks in advance 

Good Evening, 

Issue: Tenant was arrested, but we can't remove the animals

Background: We have a tenant who was arrested, her two cats and dog are still in the apartment. We've called animal control and code enforcement who've stated we can't remove the animals despite no one is there to feed or care for them. Animal control claims the tenant called them from jail and stated someone is going by to feed them. If we remove them without an eviction / set-out order from the court it's a violation of her civil rights and a felony charge for anyone who removed them. 

Meanwhile our hallway stinks, and we've stopped showing the apartment above hers because we don't want prospective tenants to experience the current condition. 

We've started the eviction process. 

Anyone face a similar situation / have a suggestion? 

What clause if any do you have in your lease that would prevent this situation (besides a no pet policy)? 

Congrats! A few things to consider as you do the due diligence:

1. Ensure you look at CAPEX items - roof, windows, HVAC etc. - how much life is left in these items?

2. Get an inspection.

3. As you walk the units ask the tenants what maintenance issues they have, ask them what they are paying in rent and ensure it matches the lease / rent roll you received. 

4. Is this a Class A, B, C or D property? When you interview PM ensure you ask what class properties they are currently managing. A class A manager more than likely won't want the headaches that come with C or D management. A class C or D manager may not have the bandwidth / team to take on a Class A or B property. 

5. Know your numbers...I can't stress this enough. If it's a value add deal know what rents you can realistically get once renovation is complete. Know your numbers inside out.

Enjoy the ride but keep your eyes open.

@John Mocker  Thanks John, hadn't considered the insurance perspective but good to know. 

@Nicholas Litchfield trust me if I could I would've make the leap from single family into 5+ earlier. 

1. Reduce the chances of having to cover the mortgage. Single family tenant doesn't pay, you still have to cover the mortgage. In a multi as long as you plan / screen properly the bills will get paid. Know your numbers.

2. Profit is significantly higher. Single family depending on mortgage etc. the goal is a few hundred per door / per month. Multifamily we're talking thousands in profit per month. 

3. Net Worth - Unless you're in a high appreciating market for single family, you can't beat the increased net worth that comes from multifamily.

Does it cost more to get in the game, yes....but the upside is greater.

You will have more potential tenant and maintenance issues, but it's a small price to pay for the benefits of multifamily ownership.

I can't stress this enough.....Know your numbers inside out. Develop, and implement systems for tenant screening, maintenance etc.....and know your numbers inside out.

Look on Zillow and Realtor.com for homes similar within 2-3 miles to see what they sold for. 

I think appraisers look within 2 miles for comps, might be off a little but this would be the easiest way. 

You can also search the local PVA and County Clerk's records for sales around the subject house to ensure /confirm the information on Realtor and Zillow is accurate.

Hello, 

I have two puzzles I'd like to solve: 

1. Is there a way to have my RE company pay for an insurance policy AND it be tax deductible?

2. Can an LLC build / own a house and rent it to the owner? Or the owner just have use of it? If so how do you set it up?

Background: Listening to someone who is potentially worth a few hundred million say they don't own a house because it's not beneficial isn't logical. So that leads me to believe their company owns the house and they have use of it. 

Thanks 

Kai, 

1. When you deliver / post your landlord intro letter, ask what maintenance items they have, if you didn't get that information during your walk through.

2. Make the repairs or as many as you can. 

3. Find the Section 8 office # / and case worker for each tenant. In our area we have to give 60 days notice for Section 8 rent increases.  Provide the correct amount of notice, and be prepared to provide comps to housing they may push back on the increase.

We've never been denied a Section 8 rent increase, but at times have had to provide comps and/ or justification why our rent was higher than the area. 

Justification would be something like our units have ceramic tile floors throughout the property where comparable units only have carpet throughout or something as simple as ceiling fans in the bedrooms vs. basic lighting.