All Forum Posts by: Sharon Tzib

Sorry about the "?" marks before my list. Have no idea why BP inserted those :)

- What should I expect the buyer to provide? I expect leases, rent rolls , tax returns? The agent looks at me funny for some of these things. I would expect at least leases.

Did you mean what should you expect the seller to provide? A lot!! And if his or your agent is looking at you funny, too bad. Here's what I would want to see at a minimum:

?Rent Roll

?Leases

?Estoppels (near close of escrow)

?T-12 Operating Statement 2 years

?Balance Sheet 2 years

?Bank Statements

?Credit Card Statements

?2 years Tax Returns

?2 years Utility Bills

?Property Management Report

?Work Orders

?Service and advertising contracts (trash, HVAC, etc)

?Insurance Policy

?Get a list of FF&E (Furniture, Fixtures & Equipment)

?Invoices for recent capital expenditures

?Licenses, Permits & Certifications

You and your agent should go meet the tenants and have them sign an Estoppel Agreement, before close of escrow. There's a sample on in the BP Files section.

This may help alleviate some of your concerns, or you may find issues ahead of time you will want to deal with prior to close.

As JJ said, as long as they are paying tenants, you should be fine with them being there. What's your concern?

The insurance part shouldn't bother you - standard stuff.

Section 5.3 is an Indemnification Clause, and theirs is quite one sided. I owned a PM company in Belize, and the first part of my PM contract said,

"Owner agrees with the exception of fraud, theft or any other act that is a crime in the country of Belize, Owner agrees to indemnify, defend, and hold harmless Manager and all persons in Manager’s firm, regardless of responsibility, from all costs, expenses, suits, liabilities, damages, attorney’s fees, and claims of every type, including but not limited to, those arising out of injury or death of any person, employee, tenant or guest upon the premises or damage to any real or personal property of any person, employee, tenant, or guest upon the premises, including Owner, in any way relating to the management, rental, security deposits, or operations of the Premises by Manager, or any person in Manager’s firm, or the performance or exercise of any of the duties, powers, or authorities granted to the Manager. If either party commences a lawsuit against the other to enforce any provision of this Agreement, the successful party shall be awarded court costs from the other and reasonable attorney fees."

I would definitely ask them to revise their language so they are held accountable in certain circumstances. You may want to have an attorney review this contract and suggest appropriate and fair language for your state.

Hey Jerry! I'm an Oakland/Bay Area native myself. Welcome to BP. I really like a guy who can laugh at his mistakes and uses humor to help others learn some lessons. You have great writing skills - you should start a landlord blog - I bet you've got dozens of stories.

BTW, I just saw that Forbes list the other day - yep, Stockton was still on it lol! I think Oakland was right next to it :) Take care,

Sharon

This is hard to answer without more facts. Each property cash flows differently based on the purchase price, amount of down payment, average rents, average vacancy rates, whether the units are separately metered or not and you have to pick up some of the utility costs, etc. etc.

What you need to do is figure out, on average, how much cash flow per unit you can reasonably get in your investment area. Then take the total amount of cash flow you want to earn before you can quit your job and divide it by that amount - that will give you the number of doors you need to buy. For instance:

$5000/month cash flow desired / $200 average cash flow per unit = 25 doors

Now this is just a projection, of course, but it helps keep you on track.

On historic buildings, make sure there are no rules or regulations preventing you from doing certain things, like upgrades, or restricting property usage. Good luck!

@tracy royce is BP's resident short sale expert. Tagging feature doesn't seem to be working tho. Any help moderator?

You might want to head over the short sale forum and ask there too.

Hey Scott! You are definitely moving in the right direction. Good luck!

Congrats, Michael. Will you have to pay any utilities for the tenants? Some areas even in a home landlords must pay garbage and/or water. Make sure you know what is customary in your area.

You should probably factor in 5% for vacancy too. Still looks cash flow positive even so. Way to go!

Well deserved - congrats!