Property Q&A in Big Lake>Question Details

Shooter, Other/Just Looking in Big Lake, MN

what steps to take when renting a home?

Asked by Shooter, Big Lake, MN Fri Dec 4, 2009

I was looking into getting a home under a llc for liability and tax reasons but i do not have the money needed to do a commercial or investment loan. I have an investor who has more than plenty of monthly income to qualify to buy this home, and afford if house is vacant between tenants, what steps must I take and how do I handle renting this home out, I do understand I need to get different homeowners insurance than I would have if I were living there, also any steps to protect my liability if someone is injured on the property, thanks,

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The investor is actually a family member, doing this without anything in return, fully for the purpose of getting me started, an example of a home I am looking at is in the market for around 130k doesn't need any work besides maybe paint, this house was sold in 2005 for 295k, I am trying to rent this home out for 100-300 for than what mortgage payment is, and i've done research to back that finding tenants to pay 1300 a month for a 2500sf home shouldn't be difficult but I want to buy homes for the purpose of selling them when the market recovers not so much to expect extra income every month
0 votes Thank Flag Link Sat Dec 5, 2009
My understanding is that you want this scenario:
1. You get someone else to use his/her credit to buy this home;
2. You take on the responsibility for the home - finding tenants, creating rental agreements, collecting deposits, rents, other appropriate fees, maintaining the property, etc;
3. You manage all the details, making sure the investor's interest is protected...

What's wrong with this picture? You have no interest in the property and while you might be able to effect an agreement to handle all this for your investor, you would not profit, unless he/she was agreeing to pay you for your services. This creates a fiduciary responsibility and one you might not want to accept with no ownership or compensation. I don't see this scenario working out well unless I am in error and some other picture applies.
0 votes Thank Flag Link Sat Dec 5, 2009
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