All Forum Posts by: Dmitry Semenov

Don't have recommendation in Miami (only in Seattle), but here is my couple lessons learned hard way.

1) Do not agree on 1 year term, or other "locked" management agreement. Negotiate 30 days notice to terminate with NO early termination fees. Reason: there are many things that could go wrong, and it is not possible to have all of them in contract; it would be much simpler if you can get out of contract.

2) Make sure you have ALL fees charged from you or tenant spelled out in contract; do not allow open ended list. Even better to have max allowed fee amount; everything out of that list / amount should have your written approval. Otherwise property manager could become really creative. My previous property manager loved to charge tenants left and right, giving me higher risk of vacancy.

3) Find references, other investors and talk to them. Just talking to property manager is not enough. They could be very nice people, but the company / systems could be not aligned with your interest.

My last eviction cost me about $300 (lawyer cost). Because tenant didn't go to court and moved out before hearing date, which happen pretty often. Especially if you explain tenant about eviction records and its effect on ability to rent.

Here are the references I got for lawyer:

1. LT Services
2. Dimensions Law Group
3. Loeffler Law Group
   

You can email them and they will send you price sheet, to get an idea.

Sound CU also does HELOCs on investment, as far as I know. Here is what I got from them:

"Our loans for non-owner occupied heloc’s are capped at $150K and interest rates are prime + 2%, 3% or 4%, based on credit, not to exceed 70% ltv.

Amounts offered over $150K are for primary residence.

2.99% for first year."

Sound Credit Union does HELOCs on investment properties, as far as I know.

Looks like Amana and Whirlpool built in the same factories and even using the same parts.

You can serve 10 day notice and request them to pay late fees. Or go to a small claims court. You can not evict them though if they are paying rents.

I suggest you to join RHAWA, they have resource desk and answer this kind of questions in 24 hours.

Pellego: 2 tiers, 100% commission, $85/mo + $550/transaction and $150/mo + $500/transaction. You'll get access to their software system that analyses deals to estimate flip profit.

AgencyOne: 100% commission, $50-100/mo + $10-200/transaction.

Other low monthly fee brokerages: HomeSmart, Better Properties, probably even more.

Disclosure: I am not affiliated with any of these, was just looking for the same.

BTW you don't need a license to manage your rentals.

@Nathan G. - thank you for a very good advice!

About #3 - here is my recent experience, just as a data point. I hired a property manager, we agreed about 8% of management rate and 50% or month rent for leasing. Right now I calculated effective management rate (including all fees, maintenance markup, fees from tenants) - and it is about 14%.

My takeaway - you should clearly understand and spell in management agreement not only all fees from owner, but also all fees manager could charge from the tenant.

Otherwise they could start charging fees from tenant left and right, snowball all fees and set the tenant to fail and you (the owner) for expensive eviction, turnover and vacancy (this is real life example BTW).

Here is my anecdotal experience with Seattle Housing Authority (SHA).

I had Section 8 inspection failed and for various problems with my property manager they couldn't do repairs in time. Unit became abated - which means that Housing Authority doesn't pay you. You (as an owner) can not request these payments from tenants as well. Basically all Section 8 payments during abatement period gone.

Now, in theory, SHA has to set termination date and move the tenant, because failed inspection for them means that unit is "uninhabitable".

In practice though, SHA didn't bother. Unit was in abatement 4 (four!) months, SHA was happily not paying and let tenant live in "uninhabitable" unit. Potential loss - about $6000. Only after I insisted that SHA should follow their own rules - they started to negotiate. This tenant still lives in the unit, by the way.

So, my takeaway - learn the rules and insist that Housing Authority should also follow their rules.

@Mike Giallanza @TIm Harstead Let me clarify. PM keeps late fees, that is expected because we agreed to.

Now I decided to terminate the management agreement due to various reasons (e.g. starting eviction and then accidentally accepting payment from tenant or doing maintenance for 3 months and lead unit into abatement and potential lost rent).

Now they demand that I have to pay the remaining late fees tenant owe to them.

As for applying rents to late fees first - WA state recently made a law that tenant monies should be applied to rents (and utilities) first, then to late and other non regular fees. But that is another topic.

@Kenny Dahill Thank you for advice, that is what I am considering right now.