All Forum Posts by: Justin Summers

 Thanks Russell.. That is pretty much what I thought.

I deal with this on a regular basis on my foreclosure purchases.  They had to know the house was going to foreclosure..  Check the courthouse file and see if they were served by the sheriff, usually a mortgage foreclosure is required to serve the tenant.  They all try to "game" the system .. They will say they have a lease when they are squatters.  They will forge a lease,.  They will say they have a place to move but just need 60 days until it's available, ect.

This is my suggestion. 

Do NOT sign a new lease with them or tell them in writing or in person they can stay in the house. for ANY amount of rent. This will end badly .

Hire an attorney and start the process of notification and eviction immediately.  An eviction "mill" law office is fine- Should only cost $400-$800. Make sure you try and find out all the names of the people in the house for the eviction if you can't the attorney will list all occupants but it's MUCH better to have their real names. That way if they Stay in the property all the way up through the actual eviction date there will be a recorded judgement with their names on record and future landlords will be able to take this into consideration when they try to rent again. 

Send the a certified letter and request a copy of their current lease along with copies of their cancelled checks for their last 6 months of rent payments. 

Meet with them in person if possible.  Tell them you will be challenging their lease in court and you will both have to hire attorneys which will cost both of your money.  As an alternative to paying your attorney you will offer then $1000 if they can be out of the house within 30 days.. $1,500 if they can be out within 2 weeks.  This usually works. Make sure and DON"T pay them anything until they are fully out of the house.. Also, do a walk through before agreeing to the cash for keys and make sure and list all appliances and items that must stay and be undamaged for them to get paid upon leaving.  Also state in the agreement that there will be no trash left in the house / yard / or at the curb and the house will be broom clean.  

Even if they sign this agreement still proceed with the eviction process after your proper notification for a hold over tenant is given. 

in closing DON'T BELIEVE ANYTHING THEY SAY - Having a heart in these situations will cost to huge $$ loses. 

I purchased a one level 2 bedroom property and I plan to renovate the property and make it handicapped accessable  (Grab bars, lower countertop highth, wider doorways, ect.. I also plan to rent the property out under our county section 8 / voucher program. The housing authority pays 20% more if one of the occupants is disabled. So, since this is the perfect place for disabled or handicapped person. Can I market it directly to disabled/handicapped? Can I deny someone that qualifies but isn't disabled? I guess what I'm asking is it discrimatory if I'm only looking to rent to someone that is disabled?

@Gabriel G. Thanks for the reply Gabriel and also the concern, I do have other rentals and other investments I had just marked that $500k for retirement. I have been in real estate for 30 years investments and brokering. I am aware of the section 8 challenges and 2 section 8 properties in baltimore already. As far as paperwork as long as each of the LLC being owned by the 1 single main LLC are all considered disregarded entities by the IRS the paperwork /filling for taxes is really the same since it's all under the same EIN.

I have about 2 millions in other assets (Other than the $500k in Cash)   which is what I'm trying to insulate from any judgment.   

For those that don't know about the lead issue in Maryland the courts have really gotten out of hand with it.   Terrance Smith claimed he got lead paint from a row house he lived in 20 years ago and never completed high school and can't get a job now at 22 y/o.  He had higher than normal lead tests when he was a child ...  They never tested the house for lead and never proved that that lead poisoning came from that house but the jury still awarded him a 9.3 million judgment against the property owner.   Even though they never introduced anything showing that the lead poisoning came from the house or that the house even had lead based paint.. Only because it was built prior to 1978.   That and the Maryland Courts recently eliminated a cap to landlord liability in lead based paint cases.

I'm setting up a solo 401k.  You can set it up by year end and don't have to contribute until next year. 

Buy it with a contract for deed aka land contract.  Have the seller sign a power of attorney for you to sign any documents at the close with the new buyer.  You need a good title company in our area to structure the deal.   With regard to the lien Don't count on the fact that after you buy it they will negotiate with you.. After you buy it you are stuck with it.  That and They will probably add a ton of late fees, interest and attorney fees..  Get a payoff letter now and pay it off when you close and catch up her 2 back payments.

I'm looking at buying several properties (8-10) in a lower income area of Baltimore Maryland for cash as a retirement income plan. The area cash flows very well.  My concern is with litigation mainly from tenants.  

I was thinking about this senerio. I would create a single member llc for each property that I purchased for example 123 main st , llc then each LLC would be owned by another single member LLC let's call it MyMain, LLC.

I was also thinking about recording a large lein/mortgage/judgement against the mymain LLC to further judgement proof the rentals and myself

My thinking would be that if some sued 123 Main St , LLC worst case is they would get a judgement only against that LLC which only owns 1 house.. The prior recorded mortgage/lein against Mymain , llc would have priority since it was recorded at the purchase of the propery. So Mymain, llc would get paid on the sale of the property owned by 123 main LLC before any judgment would be paid.

My questions:

1. Does this seem like it would work for asset protection? 

2. Would I be okay recording a lien against the Main LLC (MyMain, LLC) or should I record a lein/mortgage against each property individually?

3. Since I would own My Main LLC as a single member and each of the 8-10 property's llcs would be single member llcs owned by MyMain, LLC would everything be considered disregarded entities in the eyes of the IRS for easier taxation and filling?

4. What ways would a plaintiffs attorney try to get at my other assets?  Basically what argument could they make?

I know this sounds like I'm going a bit overboard but I'm looking at investing the only $500,000 I have saved for retirement into these rentals and will be renting to section 8 tenants that like to "work" the system anyway.  That the all the houses were built in the 1920s and there have been quit a few huge lead paint lawsuits won by poor section 8 tenants against landlords in the area. 

Thanks for any input

Justin