All Forum Posts by: Peter M.

I've never been in your exact situation and this must be a pretty big duplex for 3 tenants to be living in the other side but in the future I would require all rent to be paid in one payment. One deposit also and if returned, made out to all tenants on the lease. If they can't come up with the rent together then they all have to go. You can have something in your lease if a situation arises where one wants to leave but this way the other tenants would have to pick up the slack. I know Austin and other college towns can be tough because of these exact situations. 

My process is pretty close to your second variation. Open house style showing. I go through applications as they are received and they pay smartmove for the credit/background. They have 24 hrs to get it done or I move onto the next applicant. This way nobody pays an application fee for one I don't get to. I put it on zillow which populates trulia and other websites and I usually have 15-30 people show up on the weekend. 

Yes the high value ones usually get removed prior to the sale. If they do make it to the sale, the price will be bid up very high-sometimes all the way to market price. If the sale goes through and gets redeemed by the owner, they have to pay 25% interest on the price paid at the auction, not just what was owed in taxes. HOA dues are not a tax sale though and do not wipe out liens like the tax auction does.

Sounds to me like you have grounds to file a complaint with the state board of realtors against this broker especially if this somehow kills the deal. But I agree that you shouldn't let the issue stop it from going through. Thanks for sharing. Hope it works out. 

I agree with everything @Brian Eastman said. It is way too complicated and important to trust to generic forms. I don't care if you are the smartest man in the world, if you don't have experience in the legal asset protection world, you will miss things you don't even know you are missing. 

On a practical level, when you set up the LLC through legal zoom you will also have to find a pay for a registered agent each year. Most lawyers will do this free of charge if they structure it for you.

Ryan is right on the money with all of his comments. The only correction I will add is that in Texas the interest jumps to 50% after the first year. As for homes with mortgages, they almost never go to tax auction because the banks have systems in place to alert them if the taxes are delinquent and they either foreclose on the home first or pay the taxes and the property gets pulled from the sale. That is why most banks require you to keep an escrow account so they can make sure they get paid. I have heard of rare cases when lenders and owners drop the ball in which case they will redeem it and you make 25% (in Texas). 

@Rita Lo I suggest going to a tax and/or foreclosure sale just to watch and observe. It won't cost you anything besides your time. The biggest con to buying properties this way is that you usually do not get to go into the property before you buy so you could have some nasty surprises when you do get in so your rehab budget has to have a lot of wiggle room. 

I own a property across the street from a row of 4-plexes (probably 24-36 units in total) that some out of state lawyers bought years ago. They turned the whole thing into an assisted living compound for people with neurological problems. They have buses that take the patients back and forth from the hospital that is close by. I have no idea about the financials but I would be willing to bet it makes them a killing. How't that for out of the box?

I like Venmo and Google pay and Zelle but the only problem is that (right now) they only work with personal accounts. If you are trying to use a business account it either won't work or if it does you risk them closing your account for violating the terms. If you don't mind commingling personal and business expenses it is fine but if you have LLCs set up you risk losing that extra layer of liability protection. Checks, deposits or credit cards accepted through quickbooks or some other software are my main go tos but it just depends on the contractor. 

Whatever you do just get it in writing. You may not be able to touch his deposit unless he damages something or stops paying but if he agrees for you to keep a certain dollar amount, he won't have a leg to stand on. The clock starts ticking once you get the keys. If it were me, since you are selling it, I would just make him pay prorated rent until the day he gets the keys. I also would not have told him you were selling it because if you do deduct things from his security deposit he will complain that, "you were going to improve that, or fix that anyway to get it to sell." Not that he has a case but it will just be less hassle you have to deal with. 

Thank you for the information @Jim Cummings. I went back and read 91.006 and it is good to know that it is interpreted that way. From the way it is worded I always thought it was only referring to physical damages. I would want my unit rented as quickly as I could so I would never find myself in violation of this clause but it just goes to show that you don't know what you don't know. I copied the actual wording below if you are interested. Thanks again.

Sec. 91.006. LANDLORD'S DUTY TO MITIGATE DAMAGES. (a) A

landlord has a duty to mitigate damages if a tenant abandons the

leased premises in violation of the lease.

(b) A provision of a lease that purports to waive a right or to

exempt a landlord from a liability or duty under this section is

void.