All Forum Posts by: Robert Gilstrap

@Benjamen Propst Congrats on getting started in real estate. Even after 24 years I almost daily learn something new. Real estate is certainly complex. My areas of expertise are property management and entity structuring. If I can be of assistance let me know.

It's completely common for the PM to keep the late fee because the reality is that PM's couldn't possibly stay in business charging only 8% - 10% management fees. 

When I hear comments like @JD Martin about how little work is involved in managing property or @Levi T. where owners are "getting hosed" it demonstrates a complete lack of understanding about what professional management is and does. 

@Yaron H. not sure who your property manager is but they should be able to handle this for you pretty simply. We have a ton of Israeli investors and we've seen that need in a big way not only in Israel but worldwide. We handle LLC/Trust formation, EIN and even US bank accounts for our owners.

@Bob Collett those are two different tasks performed at different times right? Leasing up is a task that happens and may or may not be performed by someone in house. So once that task is completed it gets billed for. Then you have to manage the property for an entire month in return for that management fee and this is almost universally billed in advance. 

@Justin Webb Taxes and Insurance are easy for Subject to's once you understand how. Give me a shout and I can explain in a few minutes. I've got about 35 subject to's right now of my own and I'm closing on another in a few days. You can also easily sell one using a wrap but I would never allow the new buyer to make the payments direct. They pay you on the wrap, you pay the mortgage and remember; regardless of whether they pay you or not you are still obligated to make that underlying mortgage payment or your reputation will be trashed. You commit to buying it means you commit to paying for it.  Subject to's to me are the best thing ever invented and I would be retired by now if I had started buying them 10 years earlier.

@Michael Evans took the words out of my mouth and is spot on. Land trusts holding each property individually with a few LLC's spread out as beneficiaries works wonderfully since they are completely private. Once you get educated on trusts you will never use anything else (as your 1st level of ownership).

@Calvin Ruth what good is a million in umbrella coverage when you get sued for 6 million? Insurance without legal entity protection is worthless. 

@Brooks Everline@Jason Variano

Clearly I'm biased a little here but having a property manager in the mix from the jump is important for the very fact that they know the market, know what improvements need to be made to make a property competitive, know what rents can be achieved given a certain level of rehab thus they are able to make recommendations that achieve the best return on investment, etc. 

A manager has a ton of vetted contractors already in their fold and while very large projects certainly may warrant a full on project manager from what you describe you might can get away with just an experienced manager who can dedicate someone to that particular project.  

Happy to assist if you need someone. 

Yeah well the "gurus" are certainly well intentioned but don't always have a full picture nor is it their money they are spending to evict, rehab and re-rent. From what you describe, I would say let it alone, collect the extra money and move on down the road. Perhaps at lease renewal time your PM could put some pressure on the tenant by threatening to not renew if they don't get payments in on time but I question at what benefit since you are made whole and in fact profit from it each month. Tenants with poor money management skills have made me a LOT of money over the years so I happily oblige.

Also moving the due date is not a great idea either since you are making $$ by leaving it where it is. 

So @David D'Ambrosio you are getting all those filing / court fees 100% reimbursed whenever the tenant pays late each month correct? If so then just leave it be and take the money. If they ever default to the point where court is scheduled then you have to make a decision as to whether you want them long term or not. Since you have a PM it's not really costing you any of your time just theirs so sounds like you aren't out anything.

I have tenants who pay late every single month and I file eviction on them every single month and every month they pay all the extra fees (sometimes upwards of $300 extra) plus my fees for my trouble. Is it a pain in the ***? Yes, but as long as someone is compensating me for the pain then I'm ok with it. From my perspective I'm getting a $150/mo rent premium so I'm happy.

@William Pace cost is the main factor. PM's have tight marketing budgets and most 3rd party videographers charge more than makes sense for management. Now sales where the commissions are larger is another thing and it makes more sense there.