All Forum Posts by: Patricia Steiner

Here's another one:  Insurance Companies HATE to pay claims.  It's a "Premiums only" industry...

What are you trying to achieve? LLCs do not guarantee anonymity; only Land Trusts do that and with Land Trusts the owner relinquishes all transactions and filings to either an attorney or CPA. That's lost of control and added expense but it does completely hide your ownership. I don't recommend it unless you really need to hide and most of us just want to mitigate risk, build and preserve wealth. Please know that an Umbrella Policy only covers ONE property whereas a Multi-Property Policy - sometimes referred to as a Blanket Policy - covers more than one. I share this article almost daily with investors who are struggling with LLC versus Umbrella Policy: https://www.apartments.com/ren...

Bottom line: real estate investing is a risk based business. Some can be mitigated through insurance/titling but even more can be reduced by keeping your property well maintained, having a solid lease and enforcing it, and knowing the Fair Housing Act inside and out.  Hope this helps.

The cleaner is more important than a PM but if you're paying a PM to do the whole enchilada then know this:  the PM IS THE CLEANER.  THE PM IS RESPONSIBLE.  THE PM IS THE PROBLEM.  To blame the cleaner is pretty lowbrow.  Hold your PM accountable for it all.  And, to rent a property with broken furniture and stains, really?  That's one quick way to get reviews that will ruin your business.  Time to have a serious discussion with your PM and put some reporting standards in place to ensure that your property and reputation as a real estate investor is well represented and protected.

Best...

You have to decide what "protection" you're seeking and what options you have for achieving it. I recommend reading this article that compares an LLC to an Umbrella Policy and which is best based on specific scenarios:

https://www.apartments.com/ren...

Other ways to minimize risk as a landlord include:

Maintaining your property; if it's broken, fix it.  If it's aged out or on it's way out, replace it.  Trip hazards are expensive to cure so make sure there are none.  Have photos of your property that reflect its condition in case you have to defend it/or make a claim. 

A solid lease.  And, then there's this:  the AAOA cited that the #1 reason why most landlords fail is that they failed to manage to the lease. If there is a lease violation, address it.  Rent is late? Not okay...it's a wake-up call for all things not good to come.  And, here's a biggie:  know your lease - what's in it and what needs to be added to it.

Know the FAIR HOUSING ACT and comply with it - completely. Be careful what you ask on an application and what you deny tenancy. One of the hottest class action suits - and growing - is against landlords who refuse to rent to those with a criminal background. It has been successfully argued with consistent rulings against landlords based on the premise that once a sentence is served, that debt to society is paid and to deny housing is discriminatory. HUD has backed the rulings so just know that what you don't know can hurt you.

Protection is far more than getting the title or insurance in place...hope this helps.

Best.

As the landlord, you will need to engage a rent reporting service to do the actual reporting to those credit bureaus accepting rental histories.  Most of the rent reporting services only report to one or two the bureaus.  You can find these companies via an online search (Esusu, Levelcredit, Landlord Reporting, more). Transunion allows landlords to report rent history/payments but you have to sign up for their service.  A couple of recommendations:

1. Use the service companies disclosure in your lease package.  It's a big deal that it is done correctly.

2. Share it with the tenant as a benefit - such as "your monthly payments are reported to the credit bureau and can really help with strengthening your credit history for what you want to do in the future."  The tenant will know the downside so no need to share that but there is a risk that a quality candidate might bolt if this is viewed as an unearned punitive gesture or threat.  

Hope this helps...

I'm sure you know this now but never buy a property without knowing what the zoning restrictions are for renting it as well as the lender ones.  In my market, I've seen the aftermath of an investor getting caught running an illegal (by zoning) vacation rental...it was all over the papers and local news - and the worst part was that the guests were kicked out by the municipality immediately upon discovery...and that's not great for reviews or continuing as a host with any site. The owner was restricted by the municipality from renting it for any length of time and was called before a magistrate to determine remedy.  Costly and not fun...

I would recommend postponing the rehab and the furniture until such time that you can actually do something with the property.  No one can tell you to move forward with your plans without knowingly assisting you with mortgage fraud...sure like to be helpful but not going there.  

Punt.  

Each HOA is different in both its restrictions, fees, and management. A realtor or the property's management office can tell you what the fee is and what is included. An HOA disclosure is to be provided to you with your offer or before and you would be provided the HOA documents and budget prior to closing. Knowing all the facts on a HOA property BEFORE making an offer is critical.

Hope this helps...

You may not be on the mortgage - but you're on the title so congrats on your first home and first real estate investment. I have a recommendation for you: Don't buy a property type. Buy an opportunity. You might find that a SFH comes on market at a low price in a great rental market - and it could generate greater income than a duplex in a low price market. It's not the doors - its about ROI.

Again, congrats on your recent acquisition - I know many more will follow.

Best...

NOOOOOOOOO...BOLT. Everything you need to get started is available online and AirBnb/Vrbo - and others - have great resources for starting the business. Find a realtor who specializes in STR; it's a different animal than other properties and in this case, zoning is critical. And, buying from "a program" is never recommended...that's a whole conversation of its own.

Glad you posted...hope you've left that "investment group" behind.  The only thing they're investing in for $10k is themselves.

Best...

You bought it - someone else would too.  Sell it.  Post it on a Facebook site in your local market; there are all sorts of swaps and items posted for sale. If you know any flippers in your market - or realtors who cater to that buyer set - let them know that you have a ready inventory that you can't use and that you'll sell it at your cost.  

And, I don't see this as a mistake - it happens.  There's someone who needs it now...make their day.