All Forum Posts by: Joe Norman

It sounds plausible to me, if PMs are required to be licensed real estate broker/salesperson in WA, that the Property Management Agreement may include an Exclusive Right to List. This is probably a good question to take to a local real estate broker.

Repair in damage likely did not increase the value of the home, this generally only happens through upgrades like adding finished square footage or major remodels of kitchens/bathrooms etc.

As Bruce said, you don't need a license to "represent" yourself, only to represent others in a transaction. Some pros of getting your licenses are access to the MLS and your local Board of Realtors (pros and cons with this too). Cons are the cost involved in (both time and money) and loosing out on having a professional to guide you through the process.

Setting up the LLC is very simple, just google "Maryland business express register your business" and the Maryland.gov page will be the first non-sponsored hit. Don't forget that once your LLC is registered you will also need to go to the IRS website and request an EIN. You'll also need to file a Personal Property return with the Maryland' Comptroller's office (and pay the $400 filing fee) in order for your LLC to stay in good standing.

All that said, you will never be truly anonymous from a tenant who really wants to find you. Owning in an LLC will also limit your financing/refinancing options. Good luck!

I couldn't imagine managing a property from out of state unless you had an extremely strong team of people in your market to help with showings, inspections, repairs, etc. In addition you'll need to be able to keep up with the ever changing local laws and regulations which is doable from out of state, but will require proactive effort.

To find a good reliable PMC I would start by finding 3-4 that are (1) members of NARPM and (2) licensed by the state Real Estate Commission (not required in all states, but always a plus). From there do your normal due diligence, and remember that cheaper is rarely better. Good luck!

We don't consider charges/fees as "rent", but our lease does say that any money received by the tenant is applied to those first, and any left over is applied to rent. That has been the workaround for us.

@Nathan Gesner you're absolutely right, the rules are stacked against us here in Maryland. Even the Baltimore City Sheriff (who is in charge of enforcing eviction orders) testified in Annapolis this past session for more tenant eviction protections. Shows you who's side he's on...

Awesome man! Baltimore gets a bad wrap sometimes, but from an REI perspective it can be great if approached correctly (which it sounds like you are doing!). Keep up the good work!

If you're only looking short term then this sounds like a decent situation. Not a home run, but nothing to walk away from. Note, of course, that this opinion is coming from a place of the very limited information you supplied in your original post but on the face of it living for $1500/mo in a decent neighborhood seems decent to me.

That said, I would encourage you to look at this more long term. In 2-3 years, once you've gone through turnover and have the units rented at market rate how does the picture look? How much equity have you built up through amortization of the mortgage and appreciation of the asset? How much did you save in taxes through depreciation of the building?

What will this deal look like in 20 years (or whatever your retirement timeline is)?

Not all deals are home runs. Take the singles and doubles and be happy for them.

If you simply want to "get involved in it" I would suggest seeking out local, licensed property managers who are hiring. A year or two as an onsite manager for a large complex will likely be a great education.

If you're looking for equity/ownership, but without "burning much money", you're likely out of luck. You could look into syndication, however even that will require a significant upfront investment in legal and marketing fees.

Good luck!

I love the forward looking approach, however you're probably over complicating it at this stage. For the flipping business I'd set up a simple LLC since you won't have to worry about refinancing those properties. For the rentals I would purchase in your personal name (to get preferential lending terms) and then transfer title to an LLC at a later date.

LLCs are simple to create so you don't need to plan this too far out in advance, IMO. That said I would definitely consult with both a lawyer and a CPA before making a decision.