All Forum Posts by: Ken R.

My property manager in Tarrant County was at the court on Wednesday to initiate an eviction. Here is word-for-word what he told me:

"Really hard to evict right now. Judge pushing everyone to Texas Rent Relief program. He did not evict anyone yesterday. He gave all tenants a continuance until Monday. This time is supposed to be used for them to finalize assistance with Texas Rent Relief"

This doesn't answer Pete's question about lease extension (I don't know the answer to that). I do know that I have a tenant that is acting like Pete's tenant and we will move forward to evict if the situation with the tenant is not resolved tomorrow. 

In case it matters, Pete, our tenant's 1-year lease came to a natural conclusion a month ago. We choose to let it go month-to-month instead of giving them a new annual lease -- we wanted to preserve the right to give them proper notice to end the lease. Perhaps the Rent Relief program would override this, but it doesn't seem sensible. If we give them proper notice per their lease, we are not evicting them at that point.

Thanks Ronald. A couple of points increase in the interest rate is a material enough change in the economics to make many opportunities no longer viable to us.

Yes, loans under $1m. Mostly loans below $250k.

My wife and I have begun purchasing properties in Tarrant County (mostly Mansfield and Grand Prairie). We are looking for pointers to local banks (Tarrant County area) that are willing to develop a relationship with higher net worth investors. We are specifically interested in banks that will loan to LLCs at competitive rates for 30-year terms.

As I am sure many of you know, it is a hassle to get a loan in your own name, then general warranty deed the property over to an LLC. Not only does this risk the bank invoking the Due on Sale clause and calling the loan, the title insurance that was issued in the name of the individual does not transfer and cover the LLC. So, you would either have to get a new title insurance policy for the LLC or move forward knowing that the title policy you got at the purchase of the property didn't transfer coverage to the LLC.

Oh, and there is also the issue of the 1031 exchange. If the owner of the relinquished property is an LLC, and the purchaser of the replacement property is an individual, the IRS might decide to disallow the exchange if you can't demonstrate they are the same entity (we have worked with our CPA and 1031 exchange company to feel comfortable here). So, having the same LLC (with the same EIN) on both sides of the exchange would avoid this risk.

Overall, it would just be simpler to get the loan in the name of the LLC to begin with — which we would happily do if the rates were competitive and the term was 30 years. Hence the desire to establish a relationship with a local bank to whom we would then give all of our business. So, anyone have a bank to recommend?

$67k for a 474 sq ft condo. $2k of initial improvements. Was renting for less than $700 when we purchased it 6 years ago. Now rents for $1,300. Has appreciated to $185k.

We do something similar to what Andy described. We are in Colorado (and are now buying in Texas) and our lease specifically deals with this situation. We have the following language:

Early Termination. Should Tenant terminate the Lease before the expiration of the Term, then Tenant shall pay to Landlord an early termination fee of $200, plus $100/month for every month or part thereof that the Tenant occupied the property during the current Term.  

BTW, we rent condo for around $1300/month, so if someone departed 5 months early, that would be a $700 fee to them plus they own the lease payments until we find a new tenant (see below).

We also ask them to sign a document that states they are breaking their lease early and they are responsible for the lease payments for future months of the lease until we find a new tenant. It is our responsibility to diligently work to find a new tenant in a timely way.

We have executed on this model four times and every time so far it has worked out fine. Tenants were okay with it and we were compensated for the costs of an early termination.

I appreciate the response Teri.

Regards,

Ken

We own a number of rental properties in Boulder County, Colorado. All of our leases are for one year. Currently, 60 days before a tenant's lease term expires we decide if we would like to extend an offer to the tenant to sign a lease amendment to extend her lease for an additional year. Along with the offer to extend we might also inform the tenant what her new monthly rental fee will be (e.g., perhaps $25/month higher than it was during her initial one-year lease term). 

In reading some previous posts, it seemed that Colorado might require a 90-day notification period for raising rents. However, it wasn't clear if that was only for tenants on a month-to-month lease without a defined lease termination date (which is what our leases are based on).

I would certainly appreciate any insight on legal requirements surrounding notice period on raising rents in Colorado.