Do people you meet tend to get jealous, and assume you’re rich, or worse, do you worry that someone could try to perpetrate a scam or frivolous lawsuit on you? (I don’t mean people people that you know really well, or people you do deals with, obviously, but very casual acquaintances)
A landlord? You mean a “property manager”? What about just an “investor”.
Speculator, SFH rehabber, Part-time real estate dabbler, etc.
I tell tenants and others I meet that I am the property manager, which is true. Only my close friends know that I own any rentals. Landlords are a BIG TARGET for scumbags that want to win the landlord lottery. Keep a low profile. Keep your name off your properties. Never drive an expensive car to talk to tenants or applicants. Definitely have an unlisted home phone number and never give it to the tenants.
Good Luck,
Mike
yes, maybe landlord isn’t the only term that could be used… :smile
I use “I work for a property management company”
If you guys don’t tell people you own the places, do you sign the lease as a representative of the company and not make it look like you’re the owner?
Don’t volunteer information. If it comes up, tell them you have an ownership interest, but your primary function is property manager. Then, discuss it no further as it is private information and not relevant to the LL/tenant relationship.
If you guys don't tell people you own the places, do you sign the lease as a representative of the company and not make it look like you're the owner?
I do NOT own the properties. They are owned by my LLC, which is a separate legal entity. My association with my LLC is property manager. I do not tell the tenants that I own the property. I tell the tenants the truth, which is that I am the property manager.
Mike
I have never had anyone to ask what my role is? The leases we use, the signature line says “property manager” not “owner”
Here’s the way we’re doing it right now:
My wife and I are equal managers of our LLC. At the end of our lease on one side, I have:
Landlord:
then two signature lines (one for me and one for my wife with our names typed and our business name typed under the signature line)
on the other side I have:
Tenant:
I have a signature and date line and also a line under that for printed name.
So my wife and I sign as representatives of the LLC. Does this sound ok or is there some other way we should be doing it? Seems I could just refer to myself as the property manager as well because the property is held by the LLC.
Does this sound ok or is there some other way we should be doing it?
I think it sounds fine, except I wouldn’t set it up so that two signatures are required for your LLC. You certainly don’t want to both always need to sign just because you have a new renter. Either you or your wife signing is more than sufficient.
Mike
Because both of you are actively involved, it is possible a single incident can create a liability for the LLC and each of you personally. That can create a nexus to all assets held outside the LLC. If only one is a manager and the other is passive or engages only in activity that generates no liability, personal assets are better protected.
Another consideration is the LLC charging order is weaker because the only members are real people as opposed to entities. If both of you are involved in a non-LLC incident that generates a liability, the LLC can be liquidated since there is non-debtor member that would be harmed by liquidation.
Don’t hold yourself out as member or owner. The reality is you are a manager and you are acting on behalf of the LLC. You can use property manager or LLC manager, but don’t think of yourself as an owner/manager when conducting business on behalf of the LLC. Those are two separate roles, even though the same people assume them. When you think like an owner when conducting business, you may forget or ignore one of the formalities, which could cause the LLC to be pierced later. One way around this to have a passive member.
Since I’m the one doing repairs & rehab, is it best for me to be listed as the LLC manager and have my wife be the passive member? I understand it would be better for our asset protection if we were both be passive and hire everything out, but I’m going to do whatever work I can. Should I try to have our personal assets re-titled in just my wife’s name or would that be shady? We carry $1MM liability coverage on our current property and plan on carrying that much or more on our future properties.
I apologize for hi-jacking this thread.
All good questions. Unfortunately, the answer is it depends. It depends mainly on what you have outside of the real estate business. Re-titling may be sufficient or you may need some advanced planning. Children and retirement planning are also issues to consider.
As long as you completely trust your wife and your marriage is solid, having her own passively is not a bad strategy.
One million in coverage is usually sufficient. Very few lawsuits have the potential for multi-million dollar verdicts and those that do usually settle for the insurance limits. Plaintiff’s attorneys on contingency want to get paid, not fight.
I can’t remember anyone casually asking me what I do for a living. If they do, I say I am retired.
I have SFR, and each one of my tenants thinks that his house is the only one I own.