All Forum Posts by: Dennis McNeely

I'd look for the current status of the property's inspections, such as the fire marshal, the health department, social services, etc. - as well as checking with the local municipality for any building or zoning infractions. Find out if there are any new regulations in the pipe from each of those inspectors and municipal officials - anything that might cause you problems after you take over.

Are there any key personnel on site? Will they stay on after you've become the owner? 
Is the business expected to pass out meds for the residents - and are you required to have medical personnel on staff to do so? Does the business have adequate personnel on staff for all 3 shifts, or someone who lives on site capable of filling those hours? Do you have adequate temporary staff to cover for vacations, personal time off, or sick days?

Do the residents in the RAL have written agreements for their stay there? Are there any special arrangements you need to accommodate for any of the residents (transportation in general, trips for dialysis, monitoring blood sugar levels, etc.)?

If you're just buying the building the building and leasing it to an operator, your list of things to do and potential bumps in the road are somewhat reduced, but either way, proceed slowly and methodically, especially if this is your first RAL. Good luck!

I just bought the Kindle version of a book entitled "Investing in Real Estate with Lease Options and 'Subject-To' deals by Wendy Patton. It's a good read, but I haven't actually implemented any of the suggestions in the book. Perhaps worth checking out.

I'm retired, but spent many years as  a land developer. Whenever we'd evaluate property prior to its purchase or if we wanted to get a site plan approved, we'd get a wetland expert involved. This person / company was frequently well known by the Department of Environmental Quality, and may have been employed by them prior to their striking out and forming their own wetland consulting company. That consultant would go out and flag the boundary defined by the outermost edge of plants known to be associated with a wetland.

Knowing where the wetland boundary edge is is not the same as knowing where the limits of a floodway or flood plain are though. Those maps are available through FEMA. Note that if your property is in a flood plain, banks will require flood insurance during the entire term of any loan on the property, which can be pricey. Getting a flood plain map modified can be both expensive and time consuming. I understand some states even require flood insurance for property located outside the flood plain!

One other thought - some banks want to know that you didn't borrow the money used for the down payment, and will ask where the money came from or check to see how long the money has been in your account. If that's the case, it may put a crimp in your plans to use your HELOC for your down payment.
Best of luck with it!

Hi Garrett -
Be sure you've addressed the water or moisture problem in the basement first.
- If there's water below the slab that's wicking into the concrete, the area under your new flooring will become moist, without any water ever showing itself above the new flooring - a breeding ground for mold.
- If there's water below the slab with a bit of head on it (the water level wants to be above the slab), it will begin to push up on the slab, and may cause it to lift and crack. If the problem is severe enough, you'll see evidence of the problem with discoloration of your new flooring or even water ponding on the floor.
Keep in mind that water can also condense on the basement walls adjacent to your new floor. Even though this moisture didn't come up through the floor, it can also provide a place for mold to grow. Make sure to address the condensation problem by insulating the walls or installing a dehumidifier.
Good luck with it!

The general consensus is to tread lightly when dealing with ESA requests. Here's one resource to read through when researching the matter - but there are lots of others online.

Best of luck with it!

I'm about 50 /50 when it comes to using a property manager. I tried one manager that was highly rated (according to her reviews), and who seemed to have it together when I interviewed her. Things rapidly went south when she couldn't understand why I needed to have income / expenses reported independently for each unit though. Really??

I also had an online service fall apart on me (Nestegg).

In both cases it was a bit of a pain to try to unwrap the problems the PM created.

I did finally score with a PM in Manatee county, Florida for a duplex we have there. He's been gold, which is great since we're in Michigan.

My next venture has been with Innago, but I don't have enough experience with the software to be able to comment on the good, the bad, or the ugly.

One other thought - avoid PMs that ask for an on-boarding fee. IMHO,they should be earning their keep by managing your property, not by simply collecting money from you before they've done any property management.

Best of luck with it!

I try to handle the problem during the screening process by asking if they have a service animal (SA) or an emotional support animal (ESA) right in their lease application. If so, I ask for the make and model of any animal they have. I let them know that any false statement(s) in the application may result in their rejection - or their eviction.

Based on their overall application (credit score, references' comments, etc.), I'm able to make a determination whether to rent to them or not.

If they later move an ESA into the unit, they may be evicted based on the lie in their application, not on the fact that they have an ESA - but that's my take on the matter. Consult an attorney, as your mileage may vary.

If their need for an ESA develops during the term of their lease, be sure to get a letter from a licensed mental health professional - then check to ensure that licensee is valid for your state. Have a conversation with the tenant about any bans your insurance company might place on specific breeds of animals (especially dogs), since that may affect their tenancy. The link above opens to a situation much like your own, but scroll up and check out the contents of that entire page.

Regardless, tread lightly!

I agree with Bjorn. I check prospective tenants' references, their employer, and take a quick look at their car. I also get their social media handles and take a quick look at their posts there - it's amazing to see some of the idiocy they'll post online!

I can only speak to property management requirements here in Michigan. The state requires that you be a real estate broker (or a licensed agent acting under a broker) if you're involved in leasing or renting, or the offering to lease or rent, of real property of others for a fee, commission, compensation, or other valuable consideration pursuant to a property management employment contract.

You can manage your own properties without a license if you didn't put the property in an LLC, corporation, or partnership though.

Note that I'm not an attorney, just a real estate broker here in Michigan. The comment above is worth every penny you paid for it :)