All Forum Posts by: Derek Janssen

Originally posted by @Alan Grobmeier:

Depends on your foundation.  For example:  all my properties are on cement slabs.  I do ceramic tile, 100%.  I accept almost any pet w a $500 non-refundable pet deposit with no worries about my floor.  These are ‘forever’ houses or I would have a different strategy.

 Like Alan, my rentals are in Phoenix and are all on concrete slabs.  I go 18" tile throughout and carpet in the bedrooms.

I've gone back and forth on tile in the bedrooms, but go back to carpet.  I'm a buy and hold investor and invest for the long term - maybe to my detriment.

OK, finally back from vacation and my day job is interfering with my investing.  Could we meet after work on a Monday or Tuesday next week in SF?

Look into OKC and JAX

@Matt Faircloth My dad has an IRA and is willing to loan me some money out of it. However, he would like to not be taxed on taking the money out of his IRA for the loan. Is there a way for his IRA to hold a private mortgage (loan) to me and not have it count as a taxable event? Hypothetically, just switching assets. Not looking for tax advice over the internet, but is this covered in your book?

Originally posted by @Jared Corriel:

@Derek Janssen Is it possible to do an umbrella policy that covers all of your properties when they are each in a separate entity?

I believe that the umbrella policy is if anyone tries to sue u for any reason.  

Originally posted by @Deryk Kennedy:

@Derek Janssen

Can you explain how that works for you (what it looks like from your end) and what information led to you choosing or developing that way?

 I originally started with a $1M umbrella policy bc hey, I live in CA and that seems to be the starting price.

I think it was <$300/yr. I had always heard an umbrella is better than an LLC - they will always go after the money and keep digging until they find it. Umbrella is number one.

As I acquired more rentals, I thought I should add in another level of protection - an LLC. I initially thought I could get away with one LLC, but my lawyer convinced me that a separate LLC per property would be best. In AZ, it's a one time fee to set up an LLC and you're done. It was a decent chunk of money, but if it protects those assets better, I think it's good. If a good lawyer has a client that hurts themselves on your property and sees you have significant assets, I feel you're easy picking without some protection.

And as @Jay Hinrichs points out, this is not a bulletproof protection strategy.  A good lawyer can dig and find out all your LLCs.  With the umbrella policy, if you get sued, the insurance company provides the lawyers for the amount up to that policy (I believe).

It does help to invest in a state that is landlord friendly tho...

Random disclaimer - I'm not a lawyer, nor should this be construed as legal advice.  I'm just sharing my story, my experience and reasoning.  I recommend you consult a lawyer for professional advice.  

I have an umbrella policy and LLCs. Umbrella policy first. 

I have an LLC for each of my properties. I agree with @Lance Lvovsky and @George Pauley. Risk vs. Reward.

It's an insurance policy.  

I walked into my lawyer's office expecting to get 1-2 LLCs.

He did a search on my name and within 30 seconds knew about all the properties I owned in that area.  He said, if someone were to get injured on one of my properties (hypothetically) and walked into his office wanting to sue me, he would most likely take that case based on the amount of houses I had and the assets to go after.  It convinced me that I wanted to do what I could to mitigate that risk.

To each their own - there's no right answer.  I'm just sharing my story with you. 

I had a S8 tenant in Phoenix. Never again. I couldn’t raise rents after 5 years, so I used a failed inspection to get them out. They trashed the place, did about $10k in damage. They abandoned 2 pit bulls in the backyard in the middle of summer in Phoenix. I called and emailed the local S8 administrators and they said there was no recourse and they wouldn’t consider revoking their voucher. So, never again for me. I understand it works for some folks. But in my opinion, you can’t raise rents and expect a complete rehab when they move out.

They probably should have taken steps to prevent rents from being raised like oh I don't know - buying their own place!  If there's no rent control, it's fair game.  I have a policy of raising rents proportionate to how much of a pain in my rear a tenant is...  If they cost me more time and money, their rent will reflect that.