All Forum Posts by: Wade Sikkink

If you haven't made an offer yet then I wouldn't turn over the financials either.  Too much hassle for people that are just kicking the tires.  If the bank isn't pre-approving you then that's your problem, not the sellers. You need a better relationship with your banker or a better bank.

Make an offer, put up your earnest money, then ask for all the details.  Once a real offer is on the table then the owner will likely have no issue providing the financials.

@Don Konipol I think the context matters too.  My day job is for a large, publicly traded company.  Within the walls of that corporation, titles matter a lot.  If someone is a Vice President of such and such or a Director of so and so, that has meaning.  People generally know where that person falls in the structure and how much power and influence they are likely to have.

Once outside the confines of a corporate structure where people can give themselves titles then I don't think it matters much if at all.

I agree that the term gets used pretty loosely.  People use a wide array of titles to describe themselves.  That is one of the benefits of working for yourself, you can give yourself any title you want.  How about Chief Awesome Officer?

I once attended a start up business event and struck up a conversation with a gentleman that was the CEO of a company.  When I hear the term CEO, I think of some specific things.  I came to learn through our conversation that his "company" was just an idea and he was the only "employee".  However, he had business cards with CEO printed on them.

My experience has been that you can pretty quickly sort out the real deal when you interact with people.  Their title generally doesn't have much significance.  For example, how many posts end up on BP of people that have given themselves the title of "real estate investor" that go something like this...."I don't have any money and don't know anything, can someone tell me how to buy an apartment building because I really want to get into real estate investing."

I wouldn't fixate on titles too much.  You can usually figure out what people are about pretty quickly.

No.  The utility situation is not caused by you and not something you can control.  If the tenant is required to pay their own utilities and has this problem then they need to take it up with the utility company.  That's not a cause to break their lease.

Well, we'll agree to disagree.  I'm just glad we could have a civil discussion about it.

The bottom line advice I would give anyone is to discuss it with your attorney before making a decision.

@Jeff Rabinowitz sorry but I respectfully disagree. The argument that everyone on BP makes is that an LLC is unnecessary because you won't maintain it properly. If not maintained properly, then I agree, it's worthless. However, if properly maintained, it provides protection for the members other assets.

Just because you have been lucky and never had a major issue doesn't mean it's a bad idea.  The same is said of insurance.  Just because I don't use it doesn't mean having it is a waste.  Everyone also talks about $1M liability policies.  That's great unless your liability exceeds $1M.  If your personal assets aren't protected, they can come after those as well.

Here's the scenario, short in a light fixture starts a fire and burns the building to the ground killing the family inside. Victims family sues landlord for $10M in wrongful death suit, finds sympathetic jury and the end result is the landlord loses house and everything, moves into homeless shelter. With a properly maintained LLC all you lose is the LLC and it's assets. The purpose of the entity is to limit your liability to just the assets of the entity.

That's just my $0.02 and certainly doesn't constitute legal advice.  Everyone has to make their own decision about what's right for them.

No way that $800 is a single month.  I have a 5000 sqf house that's all electric and my biggest bill in the coldest winter ever in 10 years was about $450.  Leaky vents and the thermostat set wrong would never result in a bill that high.  There's more to the story.  I wouldn't pay the bill, but would investigate why it's high and get any real issues fixed.

@Jeff Rabinowitz brings up the right point for this discussion. What is the purpose of an LLC? LLC's have nothing to do with taxes and accountants. That's not their purpose. Their purpose is to limit the liability to the owners of a business from the operations of that business. In other words, if the front door of your rental comes off, falls on your tenant and kills them and the tenant's family sues you, you could have your personal assets at risk if you don't have an LLC. Many people don't have LLC's for their rental business, and they get along just fine. There's never a problem until there's a problem, right? Personally I would not rent out a unit until I had the LLC in place. It's quick, easy and cheap. Single member LLC's are pretty simple and you can use services like LegalZoom to do them without worry.

However, heed Jeff's advice above and make sure you know what you need to do to maintain your LLC correctly. If you don't maintain it, then you might as well not have it. The biggest issue people run into with LLC's is probably co-mingling funds, but I would talk with your attorney and accountant about what you need to do to properly maintain your LLC.

Good luck.

I agree with @JD Martin.  Buy the place and notify the tenant that the rent will be going up.  If they leave on their own because of the increased rent, then you get to renovate.  If they stay, then you are getting the rent you should.  Either way you win.

This is a really good reason why accepting a year of pre-paid rent is a bad idea.  Good luck untangling this one without losing money.