All Forum Posts by: Duane A. Snow

Alright everyone. We are looking to build a guest/STR house on our property. Has anyone ever used an HEA? pros, cons, and who would you go through?

Thank you for your help.

Duane (ANDY)

Engaging in any sort of "property management" tasks without a broker's license is tricky.  What seems like a lifetime ago I learned from the WI DOJ itself where the line falls 10 years ago. You can show properties HOWEVER you cannot negotiate different lease terms with the prospect than what is listed in the ad (rent, security deposit, utility split, etc). I.e. a prospect has a background check that under the owner's screening criteria says it may require an additional deposit, the owner must communicate with that prospect regarding that you may not do so.   

You cannot sign leases on behalf of the owner.  You cannot enter into any contracts for service on a recurring basis for the property (pest control, trash, etc).  The owner must negotiate directly with the company and sign the contract.  You cannot file an eviction or appear for them in court.  They would need to hire an attorney for that while they are gone. 

Any money you collect for rent or security deposit must be deposited into a bank account in the owner's name or their LLC.

That's really the main jist of it.  Now all that being said I would take a "retainer" that is based on the rent collected in a standard month.(Don't make it based on the rent collected the months you are in charge! If they ask to attempt to collect on past due you aren't likely going to get far with the tenants and if they are still overseeing that they may lax on it depending on what they are doing with their 2 months.)  That would cover tenant relations, showings and rent collection (if you empty a box or anything like that). I would charge hourly for overseeing emergency calls and the maintenance you do.  

Duane

Not exactly sure of what your situation is but if you're looking to get more into real estate this is AS GOOD AS IT GETS. An older couple wants some help with the day to day management? Talk about a hands on education. If it was me, I'd do the best job I possibly could while they're gone, and ask to help out more in the future if they were open to it.

For now, because you're not going to be able to predict the upcoming months, just decide on an hourly rate and track your time. Moving forward, work out a solution that works best for both of you. Who knows, maybe some day they'll toss you the keys for real on a seller financed note ?

Happy Investing !
Jaryn

Technically, believe you need a real estate brokers license in WI to legally accept compensation for managing a property you don't own.

That aside, given the short-term nature of your services, probably be best to do it with a retainer fee and hourly. Also build in a clause in case you have to handle an emergency time-suck situation.