All Forum Posts by: Account Closed

I am partnering with a guy on some long term hold deals.  I need a partner due to some credit issues and lack of capital.  He is looking to partner for some cash flow with me as the management end of things.  However, he is very concerned about possible lawsuits from rental property tenants or other issues.  I was looking into a limited partnership entity, but wanted to see if you guys had any advice or had dealt with similar partners?

Somewhat different situation, but the realtor I use just lost a sale because of a sex-offender on the block.  The couple buying the property was finalizing an adoption and the adoption agency as part of their review checked for sex offenders in the area of the home and told them they could not live there and complete the adoption.

Hello Maria,

I like the idea of the "nuisance raise" which is a term I had heard a trailer park landlord use once.  Basically the idea is that every year you raise rent by some nuisance amount that is not significant enough for the tenant to leave over, say $15 or so.  This keeps your gross rents rising while minimizing turnover.

A lot of areas require home occupation approvals and industrial type uses are tough to get approvals on.  If you are considering allowing this improvement, I would suggest you also make him responsible for obtaining any zoning approvals and associated fees.

These tenants have "headache" written all over them.  Any one who brings this much difficulty before they have even moved in can't be good for the long term.  If possible to get a lease buy-out agreement then go with that, otherwise cut bait and run.

I couldn't figure out a good way to link to this so I just copied the text.  I believe I got this from a NOLO book.

Promissory Note (for an amortized loan)

1. For Value Received, ___[borrower name]___ ("Borrower") promises to pay to the order of___[lender name]___, of ___[city, state]___ ("Lender"), the sum, in United States dollars, of ___[amount of loan, spelled out]___dollars ($__________), plus interest accruing at an annual rate of ___[interest rate, spelled out]___ percent (___%) on the unpaid principal amount beginning on ___[loan start month/day/year]___ (the "Debt").

2. Transferability. Borrower understands that the Lender may transfer this Note. The Lender or anyone who takes this Note by Transfer and who is entitled to receive payments under this Note is called the "Note Holder" and will have the same rights and remedies as the Lender under this Note.

3. Payments. Payment of the Debt shall be made in [choose one: monthly/quarterly/annual] installments by [choose one]:

[ ] personal check sent to __________[address where check is to be mailed]____________

[ ] direct deposit to ____[institution and account number where deposit is to be made]____

[ ] ________________________[describe other form of payment]____________________

Payments shall include principal and interest, as follows:

Beginning on ___[loan start date]___ and continuing [choose one: monthly/quarterly/annually] on the ___[for example, 1st or 15th]___ of each [choose one: month/quarter/year] (the "Due Date") until ___[month/day/year of last payment]___ (the "Final Due Date"), Borrower shall pay to the Lender or Note Holder the sum of $________ each [choose one: month/quarter/year] (the "[choose one: Monthly/Quarterly/Annual] Payment"). On the Final Due Date, Borrower shall pay all amounts remaining due under the terms of this Note.

___[Name of schedule]___ lays out the payment schedule for this Note.

4. Grace Period and Late Fee.If the Borrower fails to make any payment in the full amount and within ___[number of days, spelled out]___ (___[number in figures]___) calendar days (the "Grace Period") after the date it is due, Borrower agrees to pay a late charge to the Lender or Note Holder in the amount of $__________ (the "Late Fee"). Borrower will pay this Late Fee promptly but only once on each late payment.

[Choose one of the following alternative clauses:]

[Alternative A:]

5. Security. This is an unsecured note.

[End Alternative A]

[Alternative B:]

5. Security. Borrower agrees that until this Note is paid in full (including principal and interest, if any), this Note will be secured by a separate security agreement (incorporated here as Attachment __[fill in]__) and, if applicable, a Uniform Commercial Code Financing Statement, giving Lender a security interest in the following property:

_________________________[describe asset]___________________________

[End Alternative B]

6. Default and Acceleration. If any installment payment due under this Note is not received by Lender within the Grace Period, the note will be in default and the entire amount of unpaid principal will become immediately due and payable at the option of Lender without prior notice of default to Borrower.

7. Prepayment. This Note may be prepaid in full at any time without cost or penalty to the Borrower.

8. Attorneys' Fees. If Lender prevails in a lawsuit to collect on this note, Borrower agrees to pay Lender's attorneys' fees in an amount the court finds to be just and reasonable.

9. Waiver. The undersigned and all other parties to this Note waive the following requirements:

• presentment of the Note for payment by Lender
• refusal of payment by Borrower after presentment of the Note by Lender, otherwise known as dishonor, and
• Lender's notification to Borrower of Borrower's refusal to pay.

10. Lender's Rights. Lender's decision not to exercise a right or remedy under this Note at a given time does not waive the Lender's ability to exercise that right or remedy at a later date.

11. Liability of Individual Borrowers. The term "Borrower" may refer to one or more borrowers. If there is more than one borrower, they agree to be jointly and severally liable.

12. Governing Law. This agreement will be governed by and construed in accordance with the laws of the state of __________________.

Borrower's signature: ________________________

Print name: ________________________________

Address: __________________________________

Date: _____________________________________

I realize that the thread is specific to not accepting section 8 renters, however if you dhave code to work with section 8 there is a book called the "section 8 Bible" is hat has really practical and interesting tips for making the program successful for you.  

One of the main themes I took from the book is to focus on providing clean, safe and affordable housing.  Remove luxury items such as garbage disposals and sliding screens to prevent maintenance requests.

On one of the recent podcasts a guy had a strategy of putting in an offer at 70% of the market value for homes as they hit the mls.  His strategy was basically to see if he could get a counter and then he would use the 2 day response time to check out the property more.  Idea seemed like a good one to me.

A few communities across the US have taken steps to address AirBnB rentals in their city limits to ensure that they follow similar zoning requirements to other hotels, and pay hotel/motel tax as well.  But these rules are typically in the form of municipal infractions that would result in fines.

Mostly the cities doing this are popular travel areas, which Nashville might be one of these.  I would put in a call to your local planning office to see if they have any ordinances for AirBnB rentals.

Hey Jonathan,

I work for a local government in the midwest in the city's development services department.  The zoning map will show you what the current zoning of a property is and what uses are allowed within that property.  If you are already zoned for multi-family, then adding an additional unit should be as simple as completing what some communities call a change of use form.  This is simple and is permitted by right.

Sometimes a city will require that the current titleholder make this request, so you may have to get the other seller to sign.

Also, make your purchase offer contingent on approval of the multi-family use.