All Forum Posts by: Steve Smith

I say rent it as a 3 br. It appears to meet the parameters, but that depends on the state/county as codes are pretty much local to a point. And I say BS to the insurance company not paying. You buy insurance for YOUR negligence, unless it's gross negligence.

And there's an argument to just not insure it, if the premiums are too high. But that depends on your risk tolerance. Personally, I don't like insurance, it's a loosing proposition.

Also, probably need a bit more info... is it a frame or block, is the a better than average home that is in excellent condition, remodeled and will attract a great tenant (not even close to slum stuff), and what is the value of the lot to the house?

First, I could argue to stay away from duplexes, too many negatives, with a few small exceptions.
And, BE CAREFUL WITH FAMILY! The last thing you want is a family fight. But you can make it work, but YOU have to work harder to be SURE it will work and never let your family member take the loss.
Now, if he's loaning you money, you get ALL of the ownership, profits, etc. If he is giving you the money (investing) they you split... and it could be an uneven split. For you, if he puts the money up and you do the work, that's a good deal for you, even if you make zero per month for awhile.
Now, there's many ways to divide the profits, depreciation, etc. Way too much for this thread, so you need to get educated, if you haven't yet. And, DO NOT DO A PARTNERSHIP!!!! Do a joint venture. You bring something to the table (work and management) and he brings something (money). And you split according to risk, work, etc.

I could argue to get a MacBook Pro. I've had them for years and they just work. Get 16g of ram and at least a 500g solid state hard drive. (If you have a ton of videos/pix, get a 1 or 2 terr hard drive, but you could also use an external.

Occasionally, you'll find a PC programs that you might want, so either get a cheap PC or get a Windows emulator like VMFusion for your Mac. I rarely use my PC anymore. The last software that was PC only was TimeValue (a GREAT amort program), but with 10bii Financial Calculator on Mac, don't need TimeValue. AND, off topic, but you'll want a GOOD cash flow/amort software.

And, a computer is NOT an investment, it's an expense.

If you have a PM, he should have properly check out the tenant prior to renting. It's his problem to fix and he should take care of it should the tenant violate the lease agreement. There's an argument for a month to month lease so that anytime you want someone out, easy to do.
Now, is the tenant a REAL problem and has he really violated the lease? If he's taking care of the property and paying the rent on time, keep him. This is assuming he's not doing something illegal, but that would be HARD to prove without a conviction.

I had a drug runner tenant. One of my best tenants, but I didn't know he was running drugs, as he claimed he was self employed and that checked out fine. Said because if his self employment he couldn't get a loan to purchase so wanted a long term rental agreement. He gave me $25k for that lease with option (in my favor) and great rent money.  He lasted a few years, build a screened in pool for me and I took the property back when he went to jail. Got kinda exciting when the neighbors called me and said the feds are in the bushes, guns drawn, waiting for him.

If you have a PM, he should have properly check out the tenant prior to renting. It's his problem to fix and he should take care of it should the tenant violate the lease agreement. There's an argument for a month to month lease so that anytime you want someone out, easy to do.
Now, is the tenant a REAL problem and has he really violated the lease? If he's taking care of the property and paying the rent on time, keep him. This is assuming he's not doing something illegal, but that would be HARD to prove without a conviction.

I had a drug runner tenant. One of my best tenants, but I didn't know he was running drugs, as he claimed he was self employed and that checked out fine. Said because if his self employment he couldn't get a loan to purchase so wanted a long term rental agreement. He gave me $25k for that lease with option (in my favor) and great rent money.  He lasted a few years, build a screened in pool for me and I took the property back when he went to jail. Got kinda exciting when the neighbors called me and said the feds are in the bushes, guns drawn, waiting for him.

Sent you a PM. As a rule, I don't like to post private info on an open internet forum.

Yes, John, a ton of us have done just that, and the single family home makes a great retirement income. Good return on your money, easy to own/manage and keeps up with inflation.
However, if you haven't, you need to get educated before you jump in. That's a MUST.

This is almost unbelievable. The guy really screwed up waiting 3 years. At the time he bought the house (or whatever he bought) and there were squatters on it, he should have legally evicted them on the spot. However, no down side in evicting them now, if he can prove to the court that he owns it.

But getting an attorney involved is probably a good ideas at this point.

Originally posted by @Cameron Lam:

In the trust you can control it however you want by simply directing the trustee to do whatever you want, including assiging the bene interests or part of them. And a trust for each house. Very easy to deal with.

Now, there is an argument to have your management company be an LLC. But, I'd have that LLC ONLY manage the property, not get involved with the finances of the home, mortgage, taxes, etc. Muddies the waters.

I like to keep it simple.

Thanks for the comment Steve. Should totally have a discussion like this in the financial section. Honestly, this is something I'm not very experienced in and just let the legal team guide me. What are your reasons for not having the land trust flow into a subseries into a series LLC?

Bill,

Just thought I'd comment and Cam may jump back in.
I could argue each property be in a land trust by itself. One can divide interests in the land trust as necessary if others are involved, and it's pretty safe.

I'd not have the bene be an LLC.

As for management, an LLC makes sense and certainly NOT the LLC above.

Personally I don't like LLCs. (have one for mgt). Trusts are much better and are totally anonymous (except for deed) and no annual reporting.

This would be a great thread for the financial section. Cam?