All Forum Posts by: Troy Zsofka

I need to make an important correction to my original post because information has come to light that shows some of my initial presumptions to be false and potentially misleading.

Specifically, I went out of my way to refrain from passing judgement on Michael Quarles' ethics and integrity. I was sadly mistaken. Michael is unethical and dishonest, end of story.

Please see this thread to assuage any doubts as to this reality:

https://www.biggerpockets.com/...

Few things in this world upset me more than scammers, thieves, and liars; especially ones who flaunt their self-proclaimed piety to extent that Michael repeatedly has on his podcast.

Micahel is a con. Save yourself the financial loss and disappointment of doing business with his companies.

@Troy Martin - 

Any movement on potential litigation?

At this point, thanks to Detective @Jeff C., I think we can conclude with certainty that Michael Quarles is a scammer and a thief, and deserves some accountability.

@Troy Martin - 

I would be interested in joining as well. I was ripped off a year ago for a much smaller amount than some of you guys, and my multiple attempts to reach the company to address it were ignored. I think it's important to hold companies like this accountable so they think twice about simply re-branding and repeating the same behavior.

My post detailing my experience with various companies owned by Michael Quarles can be found here:
https://www.biggerpockets.com/forums/93/topics/759306-buysellfixflip-yellowletterscom-calltext?page=1#p5027187

@Youssef Fahmane - 

Looks like @Danny Johnson answered your questions. I would only add one thing: When they implement new features, they make sure they actually WORK dependably rather than focusing solely on adding more. The system will continue to become more robust based on feedback and requests from customers, but the most important thing is that it consistently functions.

@Darius Ogloza - 

Thank you for your candor. I couldn't agree more that many new investors get caught in analysis paralysis and should just go take part in a deal. I have purchased several dozen houses in my 11 years as a full-time investor and have built, managed, and am now in the disposition phase of a decent size rental portfolio, reinvesting the proceeds into a diverse array of PERE. I am only recently expanding into direct marketing for off-market properties because on-market opportunities in my area are being bid up beyond my acquisition parameters and no longer offer an acceptable ROI. To me, it makes sense to allocate resources, if available, to learning proven processes and implementing systems rather than reinventing the wheel. I can see from your posts and vote stats that you are a valuable contributor to the BP community, and I appreciate you chiming in with comments that I think a lot of people on the sidelines need to hear.

Happy investing,

Troy

@Youssef Fahmane - 

GoBig has been good so far. Their prices seem to be in line with everyone else, and the mail is getting delivered.

As far as a CRM, I've tried 3 now in total, and I've landed with FlipPilot. It's a really well thought out system and keep things simple; rather than trying to reel you in with a bunch of unneeded bells and whistles. Another awesome thing about FlipPilot is that they have weekly calls with any customers who want to attend, and the owner (Danny Johnson) is there to listen to feedback and brainstorm new features. They are constantly developing new stuff, but it's based on the requests that we, their customers, make to them. You really feel like part of the team, and everyone has the opportunity to provide input into where future development should take it. That's super cool because it's going to grow in features based on what we want, as opposed to other systems that force you to adapt to them.

Another fantastic thing about both FlipPilot and GoBig: they actually have customer service that answers the phone. Seems as though that's becoming more and more of a rarity these days, but I appreciate the ability to jump on the phone and deal with my questions quickly rather than spend endless time back and forth via chat or email.

This probably sounds like I work for these companies. I don't, I'm just super stoked to have finally found service providers that live up to expectations. I was getting really frustrated with the time and money I wasted on ones that didn't. The FlipPilot team deserves recognition for the way they're doing things.

Happy investing,

Troy

@Nick Gray - 

@Matthew Stanizzi provides great info.

The only thing that I would add is that if you can get a LOC on any of your properties, you can use that as your reserve so you are not tying up cash in liquid (and therefore low return) form. Just make sure that, if you draw on it, you leave enough room to cover the reserves you feel you need. As an example, I have a $200K LOC that is cross-collateralized by 2 SFR's. I do draw on it to purchase and renovate additional properties, but never past $150K; thereby ensuring that I always have $50K liquid in reserve.

In regards to how much you need, that is also highly dependent on how leveraged you are, as well as the condition of your properties. A vacancy on a property owned free & clear requires significantly less reserves to carry than a property with a mortgage payment. Similarly, a capital expenditure is much easier to pay for without tapping reserves (or much faster to replace the reserves you tapped) if you have significant cash flow from your rentals than if your NOI is mostly going to cover debt service. In other words, the faster your cash flow can replenish your reserves, the less reserves you theoretically need to carry.

Happy investing,

Troy

@Shelleman Paulin - 

I have been using GoBig Printing. 

So far so good. You can customize your mailers easily, but they have plenty pre-designed options to choose from. They also scrub your list so that can save a few bucks.

The customer service is helpful and responsive.

Most importantly, as compared to my experience with YellowLetters.com, they actually send the mail that you pay for; which is a big plus (sarcasm intended).

Happy investing,

Troy

@Troy Martin - 

I wrote extensively about my experience with Yellow Letters, BSFF, and CallText here: 

https://www.biggerpockets.com/forums/93/topics/759306-buysellfixflip-yellowletterscom-calltext

Multiple attempts to reach out to them to get what I paid for proved fruitless. I would steer clear.

While I refrained from making conclusions regarding Michael Quarles' integrity, I think the actions of him and his company speak for themselves.

Happy investing,

Troy

@Keith Annis

I'm not an attorney, but I don't think you need to prove anything to impose a fee that is a legitimate provision in your lease.

I think it would be on the tenant to challenge the validity of it in court as a defense to the eviction you file for nonpayment of the fee, and the judge would then make a judgement based on both sides of the story (your explanation as to why you believed it to be occurring, and the tenant's explanation that it was not). However, the thing to keep in mind is that if you impose the fee, and she refuses to pay it, all you can do is allow it to accrue along with the late fees that are caused by the ongoing balance, and then serve eviction for nonpayment once the moratorium is lifted. Imposing a fee is one thing; collecting it is another entirely. @Sean McKenna makes an important point that this may result in her not paying you at all. If you choose to wait to impose the fee in order to mitigate this risk, I would be wary of including prior months in arrears; so you may be forgoing the fee until the month you choose to actually impose it. Again, I'm not an attorney, I'm just speculating based on my opinion, so consult with your legal counsel. One last thing on this: if you invite legal process by moving forward, are you absolutely certain that you are not violating any laws by setting up a camera on a premises that you have leased to someone? When you lease a property, you pass on some of the rights that you had as owner (for example, you can not just enter the house without permission or valid notice unless in the case of an emergency). I would personally never even consider violating my tenants' privacy in this manner, but I am ignorant in regards to any potential legal implications. I do wonder how a judge might feel about this though.

In regards to the name on the mailbox or vehicle registration, a couple things:

1) My lease provision regarding unauthorized residents does not require someone to make it their legal domicile, or to move in permanently or semi-permanently to be in violation thereof. Staying there for more than 2 weeks is enough to trigger it; as it is intended to prevent additional burden on the systems (septic, for example) and utilities. I imagine your lease is similar in that regard.

2) Someone who is couch surfing at a friend's house is, in my estimation, unlikely to spend the time and money necessary to change their vehicle registration, driver's license, and legal domicile; especially since their intention is likely only to stay there for a short period of time. I don't think that should be the threshold.

Happy investing,

Troy

@David A Muise -

Just to clarify on @Shawn Ackerman's point:
I think there is some confusion regarding the duration of the NH State of Emergency and eviction moratorium.

I believe that the 2020-08 in the document is not a reference to August, but is the the Exec Order number. The attachment lays out that the Exec Orders are to remain in effect for an additional 21 days. It is my understanding that the NH Governor only has the authority to issue declarations of this sort in 21 day increments (although I am not an attorney so I could be mistaken). Now, does that mean that you'll be able to serve notices to vacate 21 days from April 24th (when this extension was executed)? Not necessarily, because there is nothing preventing another 21 day extension. However, to the best of my knowledge, it has not been, and can not be per the constitutional authority of the Governor, extended to August until the expiration of the latest extension preceding August by 21 days. Furthermore, who knows what's going to happen when all the evictions start pouring in from the backlog that has been building. It's likely going to be a slow process simply due to stressed resources.

In regards to your situation with this particular tenant:

Why do you care that they are hoarders? Does it affect you personally, financially, or legally? Is it a lease violation? If they are paying their rent, aren't they free to keep their residence as they see fit; so long as it does not cause damage to the unit or infringe upon other tenants' rightful enjoyment of their individual units? I had an acquaintance approach me some years ago for advice because he was having difficulty retaining tenants (he was a new landlord with 1 unit). I reviewed his lease and noticed that it had provisions prohibiting consumption of alcohol on the premises, as well as guests past 8pm, and he was routinely showing up to check on his tenants' compliance. I told him that once he got more units under his belt, the problem would be solved because he'd have better things to do than mind his tenants' business. Being a landlord does not give anyone the right or authority to dictate how others should live. I'm not suggesting that you are in any way similar to him, but one perspective that goes a long way in this business is to live and let live, and not concern yourself with things that do not affect you or pose a risk to your interests. Again, I am not an attorney, but I have difficulty believing, even in this absurdly litigious society, that you can be held liable for dangers caused to a person, by that person, in regards to fire hazards or whatnot stemming from their housekeeping or actions. On that note, if you don't require renter's insurance naming you and your company as additional insureds on the liability portion, start.

That said, as far as the smoking in the unit, that is entirely unacceptable. It is a clear lease violation (assuming there is a legal provision in the lease), and allowed to continue will set a precedent and only embolden a tenant who is dismissive of the rules. When I was new to the game, I considered smoking to be none of my business if the tenant was taking care of the property and paying rent. I was then reminded on a few occasions how much it cost to clean, prime, and repaint every surface in the place, and now my lease is clear that smoking is not permitted inside and there is a $200 fee per occurrence of evidence that smoking has occurred. I have not had a problem since.

Lastly, once the moratorium is lifted, if you choose to relieve yourself of this tenant by issuing a 30-day notice to vacate, that decision may result in more problems, and you may find yourself left with all of their unwanted belongings once all is said and done. Don't assume that just because you want someone out, even though it may be your property and your right, that they will magically have someplace to go, and will comply without resistance. It may be better simply to raise rent to a level that you find acceptable to mitigate what you perceive to be their drawbacks as tenants; although in a multifamily, you may have to watch out for the appearance that you are treating them differently than their neighbors. Furthermore, if they are TAW, nothing is stopping you from issuing new lease terms to go in effect in 30 days (consult your attorney blah blah blah), imposing penalties for continued smoking inside the property, prohibited leaving belongings in common areas (if they are doing so), etc. It is important to enforce the rules if you want them to remain enforceable; so you should absolutely address the smoking to retain your credibility, if nothing else. If they've been smoking inside for a while, the damage is done already, and it needs to be cleaned, primed, and repainted; not to mention if any of it is carpeted. Knowing the expense that you are up against anyway, the wiser business decision may be to allow them to stay so you continue to receive income from the unit and then deal with it later, unless part of your near-term plan was to force equity through renovation and raising rents. Never forget the concept of TVM...

Happy investing,

Troy