All Forum Posts by: Jesse Waters

I would give your closing attorney or the attorney setting up the LLC a call. I am not a lawyer, but I would say no. My understanding is since, the LLC is a legal entity, just like a person is, it would be like doing something in the name of a person who has yet to be born.

I would ask him why all that stuff is there.  Hopefully, you have something in the lease that covers not keeping junk in the yard.  If you are really suspicious, call the law.

Chance,

Welcome home.  I did my tour there in 07/08, Hooah!.

You definitely want to give the property curb appeal, pressure wash/landscape, but you don't want it to look like work to maintain.  Being that the tenants don't shouldn't have to spend all their free time trimming bushes, etc.  It might be worth leaving some of them in & having a landscape service come in once a year for a touch up.

I go with standard color's in each unit, if I have carpet, light tan.  Paint-Antique white, a few realtors I know call it "for-sale khaki."  I have bought this color from different stores & many different brands it always seems to look the same.

I would leave the privacy fence up, most of us do like privacy.

If you have to replace anything or make up grades, you want to go with more durable/indestructible features, but still want the place to look nice.  

Hope that helps.

I have one property out of state, it takes me a day to drive up to visit it.  It wasn't by choice to keep it as a rental, more out necessity,  I bought the property while I was on active duty at the height of the housing bubble, can't afford to sell it yet.  I like being close to my properties, however, if I lived in a high priced market I would consider going out of state to invest.  Fortunately, there are enough opportunities in South Carolina to keep me busy for a while.  If you do decide to go out of state I would echo what has already been mentioned, get good relationships in place.

Sarah,

Here's my take on the situation.  I'll try to answer your questions and number them how you have them.  Or atleast, I'll give you my opinion, take it for what its worth.

1. I tend to start marketing a place shortly before the old tenants move out, depending on time of year and how much work needs to be done to get it rent ready.  We only show after the old tenants have moved out.  We try and respect their privacy & want to avoid them trashing the place, plus we do our final inspection to determine what needs fixed, cleaned, repaired, updated etc.

2. Ask the tenant to remove the CL ad and remind them that they have no right to solicit new tenants or act on your behalf.   Tell them that you appreciate their efforts to get you a new tenant, but that is not their job & you will place an ad & look for new tenants once you have the place rent ready.

3. No.  Don't accept the first tenant that comes along.  Never lower your standards.  What ever quality of tenant that you have decided that you will accept, stick to that.  If you have to, lower your price, but not your standards.

Through out your post you are hinting at the fact that the tenants owe your the balance of the rent on the lease.   I ran into a situation a few years ago when a tenant threatened to break lease & move out.  She was upset that the roof got a leak after a tropical storm came through.  I had the contractor's & insurance folks out before it had even quit raining, so I asked her to re-read her lease, reminded her that she owed me the balance of the lease & I would see her in court if need be.  She decided to stay.  If she had moved, at most, I could only really go after her for rent until I found new tenants, or the difference if I had lowered the rent.  I didn't think it would really be worth my time.

Generally, when I have a tenant break lease, I just remind them that they will lose their security deposit & wish them good luck.  I try my best to stay out of court as it can get expensive & some tenants will start lying like a cheap rug just to get sympathy from a judge, even though our land lord tenant act is more landlord friendly.

4. If you ask for higher rent, then the only thing that should happen is you get it.  If you do pursue your old tenants in court, as has been explained to me by the lawyers, the best you can hope to get in judgement, is the lost time from the first tenants contract.  If the unit, under the old lease, was $2000/month and it sits empty of 2 weeks, the best you can hope to get would be $1000.

Enter security deposit.  When the lease is broken, the security deposit is forfeited.  You can take the other tact, offer them cash for keys, just be careful about how to use the security deposit, each state has different rule on how it can be used.

5. See #4.  Net tenant, new lease.  Unless the old tenant brings you a new qualified tenant to assume the lease.  

6. Lease broken, security deposit surrendered to you.

7. Not sure of the small claims court limit, varies state to state.  If you call a lawyers office their secretary should be able to answer that for you.  I think I hit most of your questions further up in other answers.  

Yes, this is a bad time of year for vacancies, you can be creative, offer to let them leave at the end of the year with no negative consequences, ie you will not take them to court, but still hold on to the security deposit.  Also, remind them that the security deposit doesn't count as the last month's rent.

Hope that answered your questions.  

JW

@Shaun Caldwell 

House hacking is a fairly simple concept. You get a duplex, tri or quad under owner-occupied financing, since banks consider 1-4 units residential. You will be subject to more lenient lending requirements, even down payments as low as 3.5%. Live in one of the units and rent the rest out. Especially if it is your first time owning investment property, you will get a good course in property management & being a landlord. I sort of did this. We bought our first property with a 0% down VA loan, lived there for a while then rented it out when we moved. This was not our original intention, however, we purchased the property about a week before the housing bubble popped & the market hasn't recovered enough for us to sell it yet. Hope that helps.

JW

@Joel G. How accurate do you find rentometer.com?

Caleb,

Based on nothing else that the fact that I just enjoy visiting these places, I would say Asheville, NC or Chattanooga, TN, not actually sure what those markets are like.

Right now I cover territory from Augusta, GA to Columbia, SC and I am based in Aiken, SC.  Aiken is a tough market since we have lots of small investor's (we have an above average amount of folks from up north that understand the value of owning real estate.)  So my local market is tough, which is why I cover such a large range.  

For the best place overall in the SE to invest.  Tough questions, depends on that particular market, your strategy & goals.  

I would say pick somewhere that is growing with multiple employers, not just govt jobs, or a single large employer.  Savannah, Charleston & Greenville, SC all seem to be on the upswing.

JW

@Brandon Hicks @Roy N. 

Hey Guys, thanks for the replys & questions.  Generally, the banks I have mortgages with generate my next month's payment slip as soon as they receive my current payment.  So, to make it easy, its now October 6th.  If I send in my payment due Nov 1 today, I should get back from the bank the statement for my payment due Dec somewhere before the end of October.  Then simply make that payment as soon as you can.  I started doing this when I bought my first house, before we had children, at one point I was about 4 month's ahead.

Also, depending on your bank, you should be able to do this online & make it a much quicker & simpler process.  You could also call the bank & tell them that you want to pay one month ahead.

Should something happen then you have your bufferzone.  Hope that makes sense, still working on my first cup of coffee.  

Kelly,

In my experiance, if you have the money for a DP (20%) the banks will go ahead and count the rent on a property towards your income, otherwise you will have to show some track record for that property's performance.  When I moved out of my first house, we didn't have a whole lot of equity in it so the bank didn't count that as part of our income, even though it was rented out.  By the time we applied for our new house it had only been rented for a few months.  Since that time 3+ years they now count it as income.

I now have two 4-plex's in addition to two rentals, we have put larger DP's on them and the banks count the expected rents as income when doing the loan paperwork.  However, when dealing with residential lending (4 or fewer units) the bank is more concerned with your ability to repay where as commercial, 5+ units, looks more at the property's ability to generate income.  

This is the point when I would suggest talking with a lending pro.  If you would like, I can get you in touch with my lender here in SC who can answer your questions more directly.  They write loans nation wide.  PM me and I'll give you his contact info.