All Forum Posts by: Cam Coplin

I've got a TH rental in HB about 1.25 mi from beach.  Sid of MO classified units slightly differently.

Class A - higher dollar SFHs, townhouses, lofts or condos in very desirable neighborhoods or swanky "in" downtown areas.
Top notch school districts.
May have lots of hi-end amenities such as gated community, exclusive access pool / fitness / spa.
New construction and/or rehabbed extensively with top notch quality, design, and "fashion" in mind.
Attracts only the highest class of tenant who can a) afford it and b) wants only the best.
Very low / non-existent crime rates.

Class B - solid, desirable units for stable tenants who want a decent value but who are also willing to pay above average rates for above average amenities.
May be new construction or recently rehabbed, but no so much a fashion statement as just a really nice place to live.
Good neighborhood/area. Good schools. Low crime rates.

Class C - basic, functional housing at a reasonable price. Nothing fancy, but clean and everything works.
May or may not be recently renovated.
Okay schools and moderate crime rates.
Attracts people who cannot or don't want to spend more on housing than is necessary. 

I consider a Class A example to be an SFR or apt within 3 or 4 blocks from the beach or on the bluffs overlooking the wild life sanctuary which has top notch fashion up grades. If its actually in Surf City then crimes are usually theft not personal injury.

I consider a Class B or C example to be a surfer shack which looks like a converted garage, within 2 block from the beach with looping electric lines to its flat tar roof.

Hope you get the idea.

RootX poured down the drain about 1/mo poisons growing roots and will extend the time you have to rooto rooter the main out.  But the roots will still grow, but slowly.  If the main line has not collapsed or is not too disjointed, an epoxy sleeve main drain lining will permanently solve the problem.  And in at least my case was half the cost of a main drain section replacement.  But you'll thereafter have to hydrojet instead of rooting.  That typically costs about 4 times a normal rooto rooting.

As you found out, Ca is really expensive for LLC. Beside the minimum $800/yr state registration you've got all the other filing, legal & documentation expenses of an inc. Additionally the LLC will provide you little or no liability limitation to your other assets, since you have a participation incidence in the LLC operations. For you to have the LLC cap your liability you have to be totally "hands off" in dealing with you rentals. So you have to pay a management co to do it all, with no input from you. You'll just be an LLC stockholder. Then there's the challenge of changing title to the LLC. Changing title is simple but it's a sale hence fed & Ca tax considerations. And don't forget potential mortgage due on sale without the written mortgagor consent. With LLC ownership comes a more expensive commercial fire ins. cost, which your LLC attorney should be able to find & bill you for (remember your just a share holder, no operational involvement). Unless you've got a large number of rentals I don't think a LLC is beneficial.

For a small number of rentals I'd personally go with increased ins + a big umbrella.

Jesse Waters & Roy N have posted some good advise.Being a So. Ca. landlord perhaps I can emphasize and fill in a couple of items.

1)When should I start showing the place?

When you get a candidate who passes your phone screening and if your rental agreement allows it, and if the current tenant is cooperating and if the current tenant has it in rent ready condition. Otherwise only after you get possession and have put it into rent ready move in condition.

1A) I'm concerned that even if the tenant says they'll move out nine months early and I find a replacement, what happens if the tenant doesn't move out so early?

To encourage him you might try an early lease termination fee of 1.5 months rent.

Since he e-mail informed you he was moving out, write him a letter confirming the conversation, the move out date and offering him the opportunity to schedule a pre-move out inspection within 2 weeks of that date.

1B) To avoid that situation, should I market and show the place only after the tenant left? Or, will that violate the reasonable attempt principle?

Since he has not yet moved out, you have no damages to mitigate hence you are under no obligation to make a reasonable attempt at anything.

2)Tenant has already started to show the place. How do I respond?
Thank him for his efforts and remind him that any applicants have to pass your phone screening, fill out an application, pay an application fee, be credit checked, criminal background checked, be bad check checked, have documented verified income, be employment checked and meet all your rental criteria.Have the tenant tell the applicants to phone you to start the process.

3)Do I need to accept the first non-bankrupt, non-felon applicant?
Nope, you can accept an applicant who best qualifies, even if this means the place stays vacant.

4) What happens if I ask for higher rent from new tenant? 

You ask for what you consider market rate rent.Don’t worry about any argument of unreasonable rent.Tenants already acknowledged his current rent is unreasonable.

5) If I get higher rent, does tenant still have to pay for lost rent?

Assuming you sue for a money judgment and not just possession, the judge will probably grant you a maximum of 1 month rent.

Is there a sneaky reason why the tenant is advertising it for hundreds more each month? Sure, he wants you to be eager to accept someone willing to pay more rent than you are now getting.

6) For lost rent, do you take it from Security Deposit?  

If he moves out, doesn’t pay the rent and you get a judgment, that’s what you can deduct from the security deposit as well as repair costs to return the unit to the condition it was when he rented it.

7) What's upper limit for lost rent from Small Claims Court? $7500

How many months would the court give me for lost rent?

Probably a maximum of 1 month.

Don’t over think this, its not rocket science

I've several Ca rentals, all have SD.  Ca law is very specific about SDs.  Neither you nor tenant can agree to violate Ca SD laws.  This means you cannot agree to any proportionate SD proration.  The security deposit must be accounted for within 21 calendar days of your getting possession and all deduction items on it backed up with repair receipt copies or rental agreement/lease violation fee deductions.  If you prorate the SD you'll lose in court, the potential bad faith penalty is 3X the total SD.  You can get plenty creative with SD accounting so it's not worth it to mess with the SD when a structured ELT can achieve the same result.

I use a Fuijitsu  ScanSnap S1500.  It does about 1 pg/sec scanning both sides.  Fast, quiet but not cheap.  I think I paid about $400 for mine.  To date I scanned leases, refi escrow packages, tax returns, receipts etc.  I scan to pdf and only occasionally OCR the pdf to make it searchable.  I'm aiming for reduced paper storage.

You have a lot of power with your existing lease. Your lease should have a priority of which fees/items get paid first before payment is credited toward rent. Use it to subtract from the funds they pay due to the 3 Day Pay Or Quit, then re issue a new notice for the missing rent amount. When the 3 days are up, refuse to accept any money & turn it over to a flat fee attorney specializing in evictions.
Don't chase them for the money, just have them deposit it at the attornies office.

Since you don't know how to fill out and serve a 3 day pay or quit notice, turn your case over to a FLAT FEE EVICTION specializing attorney.  I'm in OC and get names from the Apartment Owner Association (AOA) & Apartment Association Of Orange County (AAOC).  So contact a San Diego equivalent association to get their list.  Alternatively google eviction attorneys in San Diego I found lots of them, & start calling.  Almost all these type of attorneys will have a 3 Day notice on their web site & will tell you in a short phone call how to fill it out & serve it.