All Forum Posts by: Derreck Wells

Go away @Frans Calderon. We don't believe in these scam courses here, you can get all that information on this site for free... and my 8th grade daughter can make a better postcard. What exactly are "Door Prizers"? 

Do you own rental properties in MA? Single family or multi family, they all fall under the Massachusetts Lead Paint Laws, which are some of the strictest in the country. The state is trying to make all rental units lead safe by enacting laws that will motivate you, the owner, to delead them.

The MA State Lead Laws require that all homes built before 1978 have a Lead Certificate on file with the state if there are children under the age of six living there. There cannot be a child under six living in an apartment with lead paint or with “no knowledge” of lead paint. If there is no Certificate of Compliance on file, it is illegal to rent to a family with a child under six.

Considering that most of the rental properties in the state were built before 1978, the laws affect most of the real estate investors in the state. If a child’s blood test shows a high blood lead level, the owner of the property will be held liable. Even if the child lived there when someone else owned it, the current owner will be held liable unless the current owner deleaded the property within 90 days of closing on the property. If the current owner deleads within 90 days of buying the property, they are no longer liable for past tenants high blood lead levels and can’t be sued.

Owners should NEVER try to find ways to around these laws. There are no shortcuts; the laws are very specific on who can do the work and how it needs to be done. Lead hazards MUST be made safe by a licensed deleader. If an owner attempts to delead the units themselves, it will be flagged as having had Unauthorized Deleading done to it. It will than never be able to get a Certificate of Compliance, the best to hope for would be a Letter of Environmental Protection, which essentially tells everyone that the owner did illegal work on the property, got caught, then had to have a licensed deleader come in and fix the issues correctly. This could increase insurance rates and lower the tenant pool (who wants a landlord that does illegal work?). They could be fined for it as well, and they STILL would have to pay a licensed deleader to do the work.

Violations of the lead laws can include civil liabilities and criminal liabilities and fines can reach $10,000 per violation. Owners and Agents of Owners (Property Managers) can also be subject to penalties under the Massachusetts Consumer Protection Act which provides for triple damages.

Owners and property managers should actually make an effort to comply with the laws and take advantage of the incentives and benefits of being lead safe. There is a $1500 per unit tax credit available and low or no interest loans and grants are often available. Having lead safe rental units also increases the tenant pool as families actively seek out lead safe housing, and due to that added demand, owners can actually charge more in rent. Owners will also benefit when they sell the property since buildings with a Certificate of Compliance on file can be sold for more money because they can bring in higher rents then buildings that aren’t lead safe.

The first step for a potential owner is to have us check the state database and see if a lead inspection has ever been done. Occasionally a property was inspected, then not deleaded and this makes it so the property cannot be legally renovated until it is deleaded by a licensed deleader. Ideally this would be done as part of the due diligence when buying the property so the results can be used in the negotiations. If the property has never been deleaded it’s safe to say that it will have to be done, so some or all of the cost of deleading should be negotiated off the purchase price.

The next step is to get a lead inspection done by a licensed deleader. We have one we like to work with, but we can work off of any lead inspection report. Once we have that report, we can put together a ballpark figure for the project. If you like the ballpark number, we then need to do a walk-through of the property before we can firm that number into an estimate.

Shoot me an email if you’re considering buying a property or if you already have a rental property you need deleaded. I’ll be glad to help in any way I can.

@Sean Doherty it's been 4 days and @Jillian Campayno still hasn't answered my question. How good can the course be?

@Gabriel Krut... investing IS a job. Managing that building will take as much time as a part time job. You need to be willing to do that on top of your 9-5 job in the beginning. Think of it like you're starting a business (because you are). Starting a business takes a lot of work and a lot of long hours that are often unpaid in the beginning. But, in the long run once you've learned the best way to do things, it gets simpler and starts to pay out. Don't think you're going to buy a property and that's it, money starts rolling in. It takes WORK. You're either going to have to do that work yourself, or pay someone else to do it. 

In the beginning, I strongly suggest doing it yourself as much as you can. Learn the basics of plumbing, electrical, and renovating. Learn the RRP laws. Learn the landlord/tenant laws in your state. Learn the lead paint laws in your state. 

Maybe you can go on Craigslist and offer to intern for some contractors or volunteer for Habitat for Humanity. Ask them questions on why they're doing what they're doing. Why are they using that material? Why are they running the wires that way? How do they make that angle cut? Why is that roofing material better then the other? Learn the basics of construction and no one will be able to rip you off. Remember that water heater replacement I mentioned? There's only about $250 worth of parts at Home Depot, the other $500-$750 would be material markup and labor. It's a 2 hour job to replace. Would you rather know how to do it yourself or pay someone an extra $300+ to do it for you? YouTube is your friend. Learn the basics and don't be afraid to do it. The best way to make money is to not spend it.

Once you get a few properties in your portfolio, you can hire someone on to maintain them for you. Get kids off craigslist to mow the lawn (or get a landscaper to cut you a deal for multi properties). But because you did it yourself first, you'll know what's involved and what you're willing to pay someone else to do it. Like carpets. I can do them, I have the tools, but I absolutely HATE doing it, so I don't. I'll sub that out. But I've done it, I know what's involved, so I know what I should be paying someone and I don't get ripped off. 

Always keep in mind, there are a LOT of shady contractors out there. Alcoholism and drug addiction runs rampant through the industry, so the cheapest bid isn't always the best. Find out why they're so cheap. If they don't have a good reason, they're probably cutting corners or underbidding just to get cash. 

I personally have always been the cheapest bid any of my clients got, but it's because I work alone. In lead abatement, the insurance costs is astronomical, and only goes up if there are employees. So by working alone, I only have to insure myself. Plus, it's hazardous work, so employees generally get paid twice what normal construction laborers do, which means I'd pay a lot more in taxes, too. By not having employees, I may take longer to get the job done, but I can charge about half of what the other deleaders do and still have the same profit margins they do. So it works, there's a legitimate reason for me being the cheapest. Get what I'm saying?

@Michael Healy I believe that paragraph of your lease would be illegal and for your sake, I hope it doesn't void the rest of your contract with the tenant. 

MA law states "landlord who directly or indirectly interferes with the quiet enjoyment of any residential premises by the occupant... shall be punished by a fine of not less than twenty-five dollars nor more than three hundred dollars, or by imprisonment for not more than six months. Any person who commits any act in violation of this section shall also be liable for actual and consequential damages or three month's rent, whichever is greater, and the costs of the action, including a reasonable attorney's fee..."

Professional tenants know these laws better than you do, and will be glad to sue you because, in MA, they win. They will get 3 months rent plus attorney's fees from you. In MA you can never underestimate the tenant, the landlord/tenant laws are all in favor of the tenant and they know it.

I would absolutely give her a credit for the week she couldn't live in her apartment (because it is HER apartment, that's her home). I wouldn't take the chance that she knows a lawyer. Do you have enough confidence that the paragraph you keep mentioning is legal? Do you want this to be a test case in court? That thought aside... is she a good tenant? If she is, you'll want to be a good landlord so she doesn't move out. A good landlord would absolutely credit her, a slumlord wouldn't... Which are you? 

I would also review that paragraph of your lease with a lawyer no matter what you decide.

@Gabriel Krut the 10% management is strictly for them finding tenants and contractors. That doesn't cover any repairs. A landscaper alone will cost you $75-$100 a month, and chances are the management guy has nephew that he sends out to cut the grass. Also when the toilet clogs, the manager will just call a plumber, not caring about the cost. When that plumber says the toilet needs to be replaced, the manager will okay it without question, even though a $4 plunger would have fixed it. Often they will send a handyman off Craigslist, but charge you licensed plumber rates. You also don't seem to have money for changing carpets, cleaning the units, and painting the units for turnovers. Do you know what the turnover rate is in that area? If not, you should. When a tenant's water heater dies, it's going to cost you $700-$1000 to replace. Where's that money? 

Making an out of state investment for your first investment is foolish. You should invest locally and manage your own property until you know what those management costs should be, then you'll know if someone is trying to take advantage of you if you decide to invest out of state. 

Good luck no matter what you decide to do!!

Something to keep in mind in MA is the lead paint laws. It's illegal to rent to a family with a kid under 6 without a lead certificate on file with the state. However, if the house isn't deleaded yet, you can use that as a negotiation tool when buying it because you WILL have to do it. I have a client that negotiated $20,000 off the sale price, and then I only charged them $10K to delead it, so you can definitely use it to your advantage and make a deal more lucrative.

If you don't delead within 3 months of closing, you're actually responsible for any lawsuits that come from previous tenants that lived there. If you do it within 3 months of closing, you're no longer liable… and professional tenants know these laws and take advantage of them. 

It's also possible that an owner is dumping the property because of a threat of a lawsuit. Think of it like the building is getting sued, it doesn't matter who owns it... unless you get it deleaded within 90 days, then they have to go after the previous owner. It doesn't seem fair, but it was what the politicians came up with that they figured would get the most units deleaded. But again, this is to your advantage if they think they can avoid the lawsuit by selling before the suit is filed, you can negotiate a huge discount.

You also can't NOT rent to a family because of lead paint. That's discrimination and is against the anti-discrimination laws. Even though you want to protect their kid, the only legal way to do that is to have the unit deleaded. Even if a couple moves in and has a baby, you then have to get a lead cert, but then you have the added expense of putting the tenants up in a hotel. It's always best to do it when the units are empty. 

Another lead law the real estate agents don't tell you about is if there's even been a lead inspection done, you cannot do any remodeling until a licensed deleader does the deleading work to the building and you get a reinspection done and get the lead cert. You can then remodel to your hearts content as long as you or your contractor follows the EPA RRP rules.  If any of you find properties that you want me to run through the database, just let me know and I can check if it's been inspected, and if it has, I can see if the work was done or not. 

If you have any questions, feel free to message me. 

I can almost guarantee you that $100 month for misc expenses will be too low when you're using an out of state management company. 

@Eric Sullivan 

Congrats on your new house!

Chances are your real estate agent didn't inform you of the lead laws (they rarely do). In MA, if the property isn't deleaded when you buy it, you are responsible for the past tenants that may have been lead poisoned while living there unless you delead within 90 days of closing. The state is trying to get every rental property in MA lead safe, and they figured this was the best way to do it. 

You can use this in your negotiations on any new properties you look at. If it doesn't have a lead certificate on file, it IS going to cost you to delead, the state has pretty much made it mandatory at this point, at least if you want to avoid the liability of a lead paint lawsuit from a past tenant. Don't let that scare you though, I've had clients negotiate $20k off the selling price, and I only charged them $10k for the deleading, so it can actually work in your favor for it not to have been done yet.

You also cannot rent to someone with a child under 7 unless you have a lead certificate on file with the state. If you rent to a couple with no kids and they have a baby, you are then required to delead the unit with the added expense of putting the tenants up in a hotel during the process.

If a unit is a 2 or 3 bedroom, chances are you'll end up having a family apply. You cannot deny the family because of the lead paint either, that's considered discrimination (you're refusing them because they have a kid) and is against the anti-discrimination laws of the state. If there are kids under 6, you NEED to have the unit deleaded and have a lead certificate on file.

If the unit has been inspected, but not deleaded, you also cannot do any construction or remodeling in the unit, they consider that unauthorized deleading and it will prevent you from ever getting a lead cert. The best you would be able to get is a Letter of Environmental Protection, which tells everyone you did illegal work then hired a licensed deleader in to fix it. It generally increases your insurance rate and decreases your tenant pool (who wants to rent from a shady landlord that does illegal work?).

If you delead the property it will actually increase your tenant pool and the rent you'll be able to charge them. A deleaded unit is more valuable to a tenant then a non-deleaded unit, even if they don't have kids under 6, they still like to know they are safe from lead paint issues. Anyone can get high blood lead levels, the law only specifies under 6 because it affects the developing brain more severely then a it affects a fully developed brain. 

If you want to message me the address, I can check the database and see if there was ever an inspection done on the property for you. I'll be able to tell if there's a lead cert on file already too. Maybe you'll get lucky and it's already been done.

Good Luck on your investment!

@Avery Heilbron Didn't mean to leave you out. You are partially correct about encapsulation, but in MA it can only be done by a licensed lead abatement contractor as part of deleading after a lead inspection has been completed.