All Forum Posts by: Account Closed

I am looking at a few D-class rental properties in Northern Louisiana valued between $45k and $80k and am in need of a Insurer who can insure my rental properties. Any recommendations? Thanks! 

@David K. The most likely scenario is that the insurance company will pay out according to the terms in the contract. If you paid $54k cash and your insurance covers $94k in replacement value, you *should* be able to collect the $94k as well as the $8k in lost rental income and either rebuild or simply sell as is and let the Market figure out how much it is worth. You may end up selling it for only lot value. You will likely end up with more in your pocket if you go this route since rebuilding can get costly.

@Nasar Elarabi do you focus on your builds fulltime? Do you think this is something that can be done on the side while still working a W-2? Just curious, but what is your average cost per sqft on a build like this? Also, do you have a single builder you work with or are you the builder and you contract everything out individually (i.e. electric, plumbing, faming, etc)?

@Kyle Jean Thanks for sharing this info! I've been researching Non-Recourse Lenders and the low LTV/LTC is certainly a turn-off. Speaking to those of us starting out in MFH looking at 16-24 units with a price up to $1.5MM, what agency program would you believe to be the best? I'm thinking FHA/HUD.

@Mindy Jensen

A few things I ran into:

ALWAYS take before pictures of a rental property prior to a tenant moving in. It's tedious and time consuming, believe me I know, but it will deflate any argument they have if they ruin anything. Digital photos have a META stamp that contains forensic details such as date/time and, so long as they are not edited, can likely hold up pretty well as evidence. And take good, high resolution photos in the day time with all windows open and lights on. I had a tenant who moved out and she was burning oily candles all day everyday and all of the walls had a dark waxy coating on them, the carpet was in terrible shape, and her kids drew on the wall everywhere. She threatened to take me to court over me keeping 100% of her deposit. Once I took move-out photos, I uploaded all of the photos to two albums - 'Move In' and 'Move Out' - and shared them with her along with 3 quotes I had indicating the damage was far more than what her deposit would pay. Needless to say it took the wind out of her sails and I never heard from her again.

ALWAYS have the renter complete a 'Condition of Rental Property' form upon moving in. Be sure they sign it and sign it yourself. Make sure to send a copy to your tenant and stay on top of it. My wife and I moved into a rental temporarily when we moved to Austin a few years back and the landlord NEVER returned the form even though we signed it and sent it back to him. Since we are great tenants we figured everything would be fine. However, when we moved out, he wanted to dock our deposit considerably. When I showed him our copy of the 'Condition of Rental Property' form we completed, signed and dated upon move-in, he argued that it was not signed. Lucky for us, it was originally relayed through our agent and then to him so he dropped the issue since the agent was party to the original.

ALWAYS check on your property. We went 1.5 years without checking on our first rental and when we finally went in to check it, SEVERE settling occurred and the sheetrock joints along the ceiling and walls of the living room separated by 3 inches! it had been like that for 6 months according to the tenant who never bother reported it.

If you manage the property yourself, be sure to charge a nominal fee for any and all calls (may waive for major issues). This will prevent tenants from calling about little crap.

You may want to contact AirBNB and discuss your options with them. I would think they would step in or advise you in some capacity since letting this turn into a potential mess could really blow up in their face, publicly.

Go back and listen to Podcast Show 262. Jefferson Lilly is an expert in investing in MHPs and one of the key things he says is to stay away from Septic as much as possible. It will EAT your returns in the long run. Septic is not cheap to build out or maintain. If you must have this park, then be sure to negotiate it very very well and, as they say, 'hope for the best but plan for the worst.'

I'd like to switch to a local Credit Union in order to build a relationship to assist with future investments. A+ Credit Union in Central Texas seems like a good option. However, I'd like to hear first hand experiences before I pull the trigger. Thanks!

Who is Nick Bravo? Is he a member of Bigger Pockets?

Suppose a Checkbook SDIRA holder invests in a Syndicated LLC, which then purchases a piece of commercial property (i.e. Apartment Complex) using leverage that cash flows for 2-3 years before being sold due to appreciation and distributing the gains from the sale proportionately to the Syndicated LLC members.

In this case, and from my 'layman's' 30,00 foot view, it would appear that the SDIRA LLC is simply investing in another 'Company' and receives dividends. The SDIRA LLC is not directly investing in real estate and is not directly using non-recourse leverage. As such, it would seem that it is not expected to pay UBIT (pretty much a given) but UDFI is a bit more fuzzy. What are your thoughts? What are the IRS's thoughts?