All Forum Posts by: Justin B.

I'm not quite as strict as some of the people replying but here is what I would do (and have done in the past):

Ask if they are puppy sitting or if they got a dog.  If they are puppy sitting, just say ok and come back 30 days later for an inspection.  If you see evidence of an issue that looks like it came from the dog, ask them to repair it at their own cost (or do it and bill them) and inspect again when done.

If they got a dog, ask for a non refundable pet deposit of $250 (per pet) or higher depending on the home and raise rent 10% or $50/month whichever is higher.

With that said, I would say, there are certain classes of dogs you don't want to ever rent to (bulldogs for one).  I also wouldn't rent to someone with more than 2 dogs.  3+ is just too many.  I wont elaborate on why in this post.  There are plenty of posts about it and googling will get you answers too.  If they have a situation you won't accept, give them 30 days to get rid of and then evict if they don't.

I'm not a fan of these types of leases that say how much the tenant is responsible for or that give a period of time for them to notice problems.  As a landlord that doesn't do anything other than give you a reason to be a crappy landlord (I'm not calling you one btw).  I've fixed plenty of things I didn't have to according to the lease because in the end $30 is nothing compared to a happy tenant.

I don't see anything that's unusual in the requests.  I'd just suggest fixing it.  Unless it's an extravagant piece of equipment that you specifically say "if this breaks, I'm not fixing it, you just won't have use of it anymore", the tenant should have a reasonable expectation that everything that's in place when they move in should continue to work and stay in good health.  you can nitpick over what you do with a squeaky fan and at what point you come over to fix it versus asking them to do stuff.

With all that said, there are obviously extremes.  If she's calling you every week to come over, just don't renew the lease and get a new tenant.  If she's nit picking over every little thing and you no longer care if she's happy and would be ecstatic if she moved out, start pushing back and holding the letter of the lease.

I'll give my opinion.  I didn't read every reply so forgive me if I'm saying something that has been said a bunch already.

Tenants who usually only want to stay for a short period like a year, would not paint.  A tenant who wants to go through the trouble of painting is probably one who will be there for a few years.  There are always exceptions of course.

In my leases, I have the whole "no painting" clause without my permission.  I've had a few  renters want to paint.  They've all asked me and so far it's all been neutral low tone colors and never the whole house, just a room or 2.  I've said yes every time so far.  It's been a couple of years since I've gotten a request.  Everyone who has requested so far is still renting after multiple years so my experience is holding true to my second paragraph.

Also, if someone wanted to paint an ugly color like that (Let's be honest, that's horrific), but who cares.  If a tenant wanted to paint like that, I might say yes, but I would tell them, I need another year lease on top of what they have.  So if they have 6 months left on their lease, I'd require them to push out to 18 months.  If they say no, then I say no paint.

To the last point, they painted without asking you.  If you have no painting in your lease, take pictures (which you did), and craft a letter that says something to the affect of "If you move out in the next 12 months, your security deposit will be used to re-paint to neutral colors (100% of the cost).  If you stay 12-24 months, 50% of the cost.  If you stay 24+ months, no charge for re-painting on moving out.  Get them to sign.   If they won't sign, note it, you can still hold them to it, because they broke the lease and you can use their security deposit to "repair" their damage.  Of course you can word the letter to what your comfortable with, but based on your initial post, don't freak out.  It's really not that big of a deal.  Like above, there are easy ways to handle it.  If this is the worst that's happened to you so far, good for you :)

Actually, I have 10 properties, only 2 are turnkey (both with Memphis Invest).  I've been happy so far.  They aren't any better or worse than my other 8 which is saying more than it sounds like :)  All positive so far....

Guys, Real Estate isn't a real job.  It's not even a job period, if you do it right.  I don't want a job, I want a business.

I still have a "job" as real estate isn't to the point it can pay all the bills yet.  If I walked away for 2 months, I wouldn't have my "job" anymore.  Even though my real estate is still "on the side", if I walked away for 2 months (or longer), no one would likely even notice.  Hell, other than doing accounting each month (which I technically only really have to do once a year), sometimes I go 2 months or more without doing anything.  I've got systems and processes in place so it runs itself.

So when someone says, go and get a real job, tell them you don't want a job, you want a business.

You'll find tons of topics on this very thing, just search. Based on my experience, here is my opinion. I think putting each SFR in it's own LLC is just dumb. The administrative overhead alone would be nasty if you truly want to not "pierce the veil". Dave has his own brand of advice. Keep in mind, he's like a Suze Orman, his advice is for the average person, not people investing in real estate.

I think it's perfectly fine to have multiple SFR's in one LLC. It's even fine to not if you invest by yourself. I have all mine in 1 LLC because I invest with family. If I invested alone, I probably would have done in my name only.

A 20-unit apartment complex....yes, I'd put that in it's own LLC.

The simple answer to your question is probably that most (if not all loans) that you can get in your own name are not available to LLC's (or any entity). If buying through an LLC you usually have to get a business or in-house loan. It typically caries a higher interest rate (~2% more), a 5 or 7 year balloon, and a lower amortization.

I've bought 10 SFR's with my LLC and I pay about 2% more interest than I could get in my own name. They also carry 5 year balloons and are only amortized over 20 years. I invest with family so there are 3 of us and an LLC makes sense for what we do. If I was alone in this, I would have bought in my own name as much as I could and had appropriate insurance, etc.

I'm assuming all these comments come from folks who don't invest in real estate.  You wouldn't take swimming lessons from someone who has never been in the water.  You wouldn't get into an airplane with someone who isn't a pilot.  You shouldn't listen to anyone about real estate who has never done it.  Buying your own home doesn't count either.  If you start getting these comments from people who own real estate and invest, then maybe you pay a little bit of attention but they should also be able to put context around their comments too.

Of course it's not easy (although I think it's kind of easy and I own 10 properties), it involves more money than people normally invest at once, etc etc.

It's real simple.  Educate yourself as best you can and then jump in at a comfortable level.  I started with sub-$100k properties as the risk to me was low even in a worst case scenario.  I learned a LOT once I jumped in, but it's all been positive, even the "bad" situations like a foundation problem and a heater gone bust.

Keep your head up and don't listen to people with no experience.

I had this exact same situation with a turnkey company.  The appraisal came in below the agreed upon price.  I revised my offer for the appraisal value (I did think it was fair).  We weren't talking $10k, but it was a few K.  The turnkey company accepted and it's been great.  My personal opinion is just revise your offer to the appraisal value and let that be that.  If they don't want it, walk away.  When it comes to turnkey there are plenty of them out there and you'll get one.

The one caveat to that is if the appraisal is just ridiculously low.  I had this situation with a turnkey property as well.  I had an appraisal come in at like $15k below offering (which was ridiculous).  Sometimes you just get an appraiser who is scared (or bad at their job).  The bank who was going to lend me the money, threw the appraisal away and gave me an internal review and the price they would lend on.  I went back to the turnkey company, revised my offer to that level and they accepted.

The most important thing here is that my numbers worked at the final price in both scenarios.  If the numbers don't work, walk away no matter what.  There is no need to throw an additional $10k cash on top of the 15-20% you're probably already putting down.  Just my personal opinion.  The worst thing you can do is buy a bad deal just to get in the game.  You may not be perfect, but the mere fact that you posted this question here tells me the numbers probably aren't great and you're squeamish about putting down that extra $10k (I don't blame you as that could potentially get you a whole other property).

All, November would be a great time to come out and meet the group.  We're having a more informal meeting at a local restaurant before we go back to the normal format for December.  There is no cost to attend, just whatever food and beverage you buy.  If you haven't sent me your e-mail, please do so and I'll add you to the email list.