All Forum Posts by: Greg Powers

@Gina Nicolas, I would say your best move at this point is to send her a letter stating that you declined her application because of the collections. Don’t say anything more about the criminal history.

The fact is, you specifically did not deny her because of the criminal history, and the fact that you asked for more information suggests that you were willing to consider it.

But you should tread carefully here, and I would ignore any further questions or gripes from her or an attorney (if she really has one) about the criminal background. I heard rumblings about criminal background checks being discriminatory because of the concept of “disparate impact,” and a lawyer might try to use that angle against you.

I’m not an attorney, and this is not legal advice. Just my two cents.

@Mack Owens, I don't think any of us can decide for you whether it's worth the risk.

  The "risk" as I see it involves three factors: 1) How soon will the system, or any of its components, need to be replaced, which a good inspector should be able to counsel you on.  2) How much will the system or its components cost to replace?  If you find a septic designer in your area, they should be able to tell you if the system is adequate for current usage or whether, if any part needs to be replaced, it would need to be upgraded; then you could speak with a septic installer and get an idea of the cost for all or part of the system.  3) Can you control the behavior of the tenants to protect the system (can you prevent them from flushing personal products down the toilet, or pouring bleach down the drain, or washing paintbrushes in the sink)?  Maybe a corollary risk is being without a working system for a month while a new one is designed or installed--what do the tenants do in that case?  Do you lose them?  Do you have to pay for hotels in the interim?

Then look at what kind of return you can expect from the property.  Will that return be sufficient to deal with a worst-case scenario?  And are there any other opportunities you could invest in besides this one with less risk or a better return?  What is the anticipated lifespan of the system and how long do you plan to own it; and how will that condition affect your ability to sell down the road?

Good luck!

@Todd Rasmussen, I would also try to get a copy of the current septic plan from the town or state (here in NH the Dept. of Environmental Services has many plans on file) and ask whether, if the system needed to be replaced, it could be replaced with the same type of system. Rules around septic systems can change, and if the current system would have to be replaced by a different size or type, you’ll want to check with a septic installer regarding the cost for a new design AND installation. A new system for a single-family home here in NH can cost $12,000-$15,000. I’d guess a system for an 8-unit property would be quite a bit more.

It might also be wise to include some dos and don’ts in the leases, and not just as suggestions, perhaps with monetary charges for violating them (if allowed).

@Sean Ross, yes, you did.  Great info!  I'm glad I was browsing the forums today.  :)

@Dave Foster--very helpful!  And very inspiring...Yes, it gets cold here in New Hampshire, and having fallen in love with scuba diving and having visited the Palm Beach-to-Key Largo corridor, what you describe sounds incredibly tempting.  But selling one's primary residence would be tax free anyway, as long as your gains don't exceed the homestead exemption (I'm married and my house is far too modest to exceed it).  But trading a property or two here for something in Florida that we visit now and move into later seems pretty appealing.   Thanks!

@Sean Ross, just as a side question, is it possible to 1031 into a property that is not used exclusively as an investment? If the owner is using the property for, say, a month out of the year, does that cause any issues? Or would you hold the property in an LLC and "rent" it to yourself for that month?

@Abigail J Steinert, just because you are required to work under a broker doesn’t mean you can’t do your own thing. If you pick the right brokerage, you won’t have any quotas to fill for them, you won’t have to work “floor time” (a sort of mandatory phone answering), etc. You will be an independent contractor and can run your business as you see fit, within certain guidelines. You can do as many or as few deals as you want; you can just do your own deals without having to work with outside clients, etc.

As some have pointed out, you may pay fees to your office, the state, or nationally as an agent; but you will also have the ability to collect referral fees, which can be significant if you’re purposeful about it.

In my opinion, being an agent gives you options. I feel it opens more doors than it shuts.

Good luck!

@Nathan G.

My kids, who are in their 20s and very progressive, almost fell over backwards with shock and shame when I told them I was planning to become a landlord. I said, “Well, consider a world without landlords. You’d either be living at home forever or under a bridge.” I suspect they would choose the bridge. :)

Congratulations Ryan!  That's a great approach, asking about off-market deals.  Well done.

If you don’t have an attorney involved, I recommend it.  The five or six conditions you have to meet are kind of vague, but an experienced attorney will know how to craft an answer to them that will a) answer them the way the Zoning Board wants, and b) make you look professional and credible.  You can view minutes from previous meetings online and see which attorneys show up before the Board frequently.