All Forum Posts by: Michael Miller

Thanks, @Tim Johnson. I agree with your recommendation. I guess the real question is how much of the security deposit do I insist on retaining--if I'm totally in the wrong and I need to give it all back, so be it (though obviously the least favorable outcome). On the other hand, if it's totally within my rights to keep the whole deposit, given they are breaking a 12-month lease after 1 month and that I've done everything in my power to address their issues in a timely manner, that would be preferable. Or maybe I meet somewhere in between and keep a month of rent since they're at the beginning of the month. Any thoughts?

My tenants moved in late August and after about a week they found there were roaches in the unit. Previous tenants had seen some but we got pest control to treat it and it wasn't a major issue. The building has never had a real roach issue before.

I got pest control to treat the unit as soon as I heard about the issue. After a week, they were still having issues so I had pest control come back again, though they notified me it was likely a building issue. I raised it to the board of the HOA the following Monday (now 3 weeks into the lease) and we agreed to have our base pest control enhanced to take care of the issue. I offered my tenants a 50% rent reduction until the issue was resolved (rent was already WELL below market). They have been adversarial throughout the process and are now insisting they break the lease and move out by next week. Do I have any reason to return the security deposit / any defense if I choose not to? Tenants have threatened getting the county/property attorney's involved but frankly they don't strike me as very sophisticated so I have my doubts. FYI, the unit is in MN.

We need to essentially catch the criminal in the act and have evidence to evict on the basis of crime, unfortunately.

Greg Scott--do you then hire someone to watch the feed? That's another expense the condo owners have pushed back on. We also expect cameras to get destroyed.

Scott Mac--what kind of independent contractor cleans up needles? Have any recommendations or can you put me in the direction of any (maybe they're all local)?

Nathan G.--all good ideas. Unfortunately we've been pretty forthright with our accusations but folks don't seem to care because we have little authority to collect fines and we can't evict.

Thank each of you for your very high-quality responses!

I own a condo in a gentrifying neighborhood that has taken an ugly turn due to Covid and a high-profile police brutality case nearby (think BLM). I have excellent tenants in a complex of 12 units. It appears there's another tenant selling drugs, and as a result junkies come and go from the property and use drugs in the common areas. There are used syringes and condoms in the hallways and stairwells. We're working on getting who we suspect is the problem tenant out but it's challenging in the eviction moratorium environment without catching them dead-to-rights selling drugs. We don't have a doorman and owners are reluctant to shell out for security. The police precinct nearby was destroyed during a protest and it is challenging to get the cops to come if there isn't a crime in progress. My tenant sends me pictures of used needles in the hallway and short of working toward improving security and removing problem tenants, which are not quick or inexpensive processes, I'm at a loss. Any advice? 

Dave, to be clear, do you mean that, if you earn a total of $150K (rental income, "day job" income, etc.) you no longer qualify for the passive loss allowance? Or do you mean that the allowance disappears if you have a rental income of $150K?

Any chance you could point me to where this can be found in IRS code?

@Stanley E., right, but then I lose financing options as Fannie and Freddie do not allow banks to lend to LLCs. See my predicament?

I'm an aspiring rental property investor in the Minneapolis/St. Paul metro area. I'm targeting properties in the $100K - $200K price range, with the intention of using traditional mortgages for financing.

From the outset, I do not plan to set up an LLC; first, because I don't think most banks will lend to an LLC, and secondly because I don't think such relatively small investments will arouse the attention of ambulance-chaser lawyers. I should be covered through insurance.

So, finally, my question is: how do you limit your exposure to legal liabilities as you your real estate net worth grows, assuming traditional mortgages remain an essential part of your strategy (i.e., an LLC won't work)?

Also, would love to connect with any BP folks in the area!