All Forum Posts by: Joe Semifero

Justin - who was the broker? This looks like it might be a Trust Deed Resale deal. If so, I was trying to find some info and feedback on the company. Thanks.

Has anyone used the LLCsforLandlords referred from the Mr. Landlord website? The url for them is http://llcsforlandlords.wordpr... and they offer a LLC operating agreement specific to real estate investing. The web site says the OA is $995 - wondering if anyone has any experience with it.

Thanks. 

I have a condo in AA, on the west side of town about 2-3 miles from campus. It is on a bus line so it is easy to get to campus from there. (UM Students ride the bus for free with their student ID.) It is a 1Br 1 bath (750 sq ft) and I believe it would rent for about $850-$950 a month based on my research. 

Houses and condos in Ypsilanti are going to be cheaper, but they are further and a longer bus ride to school. Some kids live in apartments in that area. In AA, they are pretty strict about enforcing rental rules. (The city web site has a lot of the requirements for registration, inspection, etc.) You also have to contend with the condo association, which doesn't take kindly to rampant partying. 

That all being said, for the $260 or so I pay every month for association fees (includes water, sewer, garbage, landscaping, snow removal), about $250 a year for insurance, and about $1400 a year in taxes, my daughter has her own place. She could easily share the large bedroom with a roommate, and she has had people stay with her on occasion. It is MUCH cheaper than renting closer to campus in a house or apartment or paying for dorms. In addition, it has appreciated over the last few years, so I should make a profit when selling. The condo should sell in the $75K-$85K range, so around $100-$110 / sq ft.  You could rent it out. The taxes would be higher (there's an additional $18 per $1000 taxable value / $2000 market value) on non-owner occupied. 

These are lower priced condos. Condos in AA go up to $200K-$300K and more, in the area of $300/sq ft. I am not planning on renting the condo after she moves out (planned for next spring) as I do not want to deal with the AA bureaucracy surrounding rentals, much less deal with student rentals, although the area where our condo is located is not really student housing. 

Do you have any other specific areas of concern? 

In Michigan you can hold unpaid rent from security deposit. We never send back security deposit until the 30 day requirement for just such a situation. But, tenants are crafty and I'm sure we'll get bit one way or another on something like this eventually. Good luck. 

Most leases have some type of notice requirements included. Often they say something like 30 days notice to terminate is required and that it goes month to month afterwards. I am not a lawyer, but I would guess those types of things would require a 30 day notice to increase. We have updated our lease to say 60 days notice is required, since we generally want to get a new tenant lined up more than 30 days from lease end/move out date so the new tenant can give notice to their current landlord. 

Worst case scenario, you lose out on one month of the increase of you miss a 30 day notice. Definitely better to give at least that much notice than to risk having it be challenged or other difficulties. 

 We also use Cozy.co, but as a confirmation. It's sort of a three step process for us:

1) Real estate agent we use does verbal review with the potential tenant indicating minimum requirements, most importantly income 3x rent and no evictions, and that eventually we will do a credit/background check for which they will need to pay $40.

2) If minimums are met and they are interested, they get a paper application to complete and submit. If they return the application, we make an initial review of the qualifications. 

3) Once we get someone that qualifies and looks good, we request them to go to Cozy.co (after we send a link) and they pay the site for the report. (Personally I like MySmartMove report better, but Cozy.co works.) Then we make a final decision based on the report and application, along with follow up on previous landlords, etc. 

We have only had a couple of people not pass the Cozy check after the initial review. Most times the difficult tenants won't make their way through this process. They are looking for a landlord that doesn't check backgrounds, doesn't give them requirements, etc., and stay away from those that do. Be that landlord, and you'll save yourself a lot of trouble. Believe me, we have purchased rentals with tenants in place that took advantage of bad landlords that didn't check backgrounds, etc. Good luck!

I believe it still has to be in a savings type account, and there aren't going to be any of those with interest above a couple of percent. I wouldn't put the money in a personal account with rentals under an LLC, as that just seems tailor-made for piercing the veil of liability. Maybe a credit union locally might have a slightly higher rate of return?

It seems like you would have to have a HELOC on the entire property since an ADU wouldn't have it's own tax ID / parcel.

Generally you just write yourselves a distribution check, like a dividend. This is how we have always managed it. Leaves a paper trail, too.

I haven’t been able to figure it out - shows up in the cart at the normal price.