Posted: 4th January 2012 by Melissa in Uncategorized

Welcome to the FBS Rent Sense Blog. We will be posting weekly Rent Sense Articles written by Neil and Chris. These articles can also be seen in major publications such as the San Diego Union Tribune. Our goal is to bring quality information to help counsel those already in or interested in the industry. Check back each week to see what is new and exciting in the Property Management world.

“Nearly half of all the housing in San Diego is offered for rent. This condition has existed locally for decades and will continue for the foreseeable future. It is imperative that rental owners and rental residents respect the other for their important role in the essential segment of our local economy. The more informed each are about their respective rights and responsibilities as well as changes in the marketplace the more realistic are the expectations. That just makes good sense; Rent Sense.” – Neil,  2008

Where your home matters…


Last night we teamed up with our friends at Health Savings and spent time with the Urban Angels serving dinner to the less fortunate.

Urban Angels is a Nonprofit Organization formed to nourish and provide food for the homeless of San Diego.

From cooking to serving to cleaning, Urban Angels runs the entire kitchen at Connections Housing, a state of the art service center and residential community designed to reduce street homelessness. We provide food services to Connections residents 7 days a week, every day of the year.

Urban Angels also assists with feeding services every Wednesday at The Salvation Army.

Volunteer, donate, or simply spread the word about Urban Angels – anyone is welcome to join and contribute to the cause.

FBS committed to numerous volunteer events this year, this was our THIRD!!!! We look forward to supporting our communities throughout the year. This is what housing means to us.

Thank you Health Savings for participating with us!


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KTS Legal Questions April 2016

Posted: 4th April 2016 by Melissa in Legal Questions
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FBS Apartments, Condos and Homes For Rent in 69 zip codes throughout the S.D. Region

FBS operates Rental Properties for Independent Owners utilizing Industry Best Practices which creates direct benefits to our Rental Customers. We have provided Superior Housing Alternatives now in our 5th Decade. Our available rental inventory changes daily. www.fbs-pm.com

As professional managers we must stay on top of local, state and federal laws, regulations and housing codes that are imperative to our clients and rental customers. We review and update our contracts, policies, forms and routines with the help of KTS (Kimball, Tirey and St. John).

Here are some situations we have asked Ted Kimball to weigh in on -

1.    Question: Is a new owner subject to the pet policy of a previous owner with month-to-month agreements?
Yes, but the terms of a month-to-month agreement can be changed by properly serving a 30- day notice of change of terms of tenancy on the tenant.

2.    Question: What is the best way to handle the 31-day month? When a tenant moves in mid-month, is it best to prorate the remaining days until the 31st or is it best to ignore the 31st day and consider all months to be 30 days?
There is no specific law on point so if your lease doesn’t address this issue, most judges use a 30-day month to calculate daily rent notwithstanding the number of days in the month.

3.    Question: We have a tenant who has been incarcerated.  Her aunt is coming by to remove her personal belongings from the unit before the tenant’s 30-day notice expires.  Does the tenant still owe rent for the remainder of the days left on the notice to vacate even though the unit key has been returned to us?
Yes, unless you are able to relet the premises before then.

4.    Question: Can I require all overnight guests to register in the office?
Some judges may consider this an unreasonable invasion of the tenant’s right of privacy.  It is so far untested in our courts.

5.    Question: What should I do if I suspect drugs are being sold out of one of our apartments?
Call the police and report the incident.  Ask the police for further direction. Document all of the calls and what you said, did and observed. If you can prove illegal activity, commence an unlawful detainer action.

6.    Question: If a resident dies and we discover the body, should we call the police first or a family member?
Call the police and give them the names and addresses of the family members. Wait for further instructions from the police.

7.    Question: What happens if we rent to someone who is under 18 and is not an emancipated minor?

The lease is voidable because the tenant did not have legal capacity to legally enter into the agreement.

8.    Question: What if the first of the month falls on a weekend?
Answer:  Under California law, Sunday is automatically considered a holiday. So if the first is a Sunday, a notice to pay rent or quit can normally be served on the following Tuesday (unless Monday is also a holiday in which case you have to wait until Wednesday).  However, Saturday is not automatically treated as a holiday. It is only treated as a holiday if the tenant needs to access their bank in order to pay their rent and their bank is closed on Saturdays.  Unless the landlord knows the tenant’s bank is open on Saturdays, the safe approach is to treat Saturdays like a holiday and give the tenant through Monday to pay (unless Monday is a holiday).

9.    Question: Where do I get the lead paint pamphlets?
The California Apartment Association or one of its local affiliates, the office of HUD, or the Environmental Protection Services (EPA) has pamphlets available.
The Protect Your Family from Lead in Your Home pamphlet is available online at  www2.epa.gov/sites/production/files/documents/pyf_brochure_landscape_color_1-16-13_0.pdf. The disclosure form is available at  portal.hud.gov/hudportal/documents/huddoc?id=DOC_12345.pdf. A fact sheet regarding the lead disclosure requirements is available at  portal.hud.gov/hudportal/documents/huddoc?id=DOC_12351.pdf.

10.    Question: Can I serve both a 3-day notice to perform covenant and a 30-day notice at the same time?
Yes, so long as the 3-day notice provides that the tenant can either perform the broken covenant or quit possession of the premises within the three days.

11.    Question: What is a prejudgment claim? When should it be used?
A prejudgment claim is a document that can be filed along with the summons and complaint for unlawful detainer. It requires that all persons who are claiming a right of possession to the subject property to file a response and they will then be added as additional parties (defendants) to the eviction lawsuit.

12.    Question: What kinds of changes to the rental agreement require the “change of terms” notice?
Any material change to a month-to-month tenancy requires a written 30-Day Notice of Change o0f Terms of Tenancy.  It may be served personally, by post and mail, or substituted service and mail.

13.    Question: In our lease agreements we require tenant’s to pay their rent on the first of the month.  If the first falls on a holiday, such as Labor Day, do you have to give the tenant’s until midnight on the second to pay the rent before serving a notice to pay rent or quit?
Rent is not delinquent unless one non-holiday day has expired from the date the rent is due. So if the first is a weekend or holiday, the rent is not late until after one business day has expired.

Ms. Management April 2016

Posted: 3rd April 2016 by Melissa in Ms. Management
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Carol Levey, writer and creator of Ms. Management also appears as a guest blogger on Rent Sense. Her insights appear in dozens of other industry publications across the country. Carol is a regular presenter at the annual AAMD Education Conference, has served as MC Host for Award Events, and consistently over 35 years of volunteerism taught & authored curriculum for AAMD Education. She has been acknowledged for her outstanding contribution as an Industry Supplier becoming the recipient of the Jack Shapiro Award Winner twice; in 1987 & 1990.

Carol Levey is perhaps more recognized at the national level as an educator in the real estate industry. She served as one of the original team that produced the National Apartment Association coursework leading to the respected NALP designation. Her company Levey Enterprises has provided temporary leasing specialists, site managers and marketing offsite personnel to major apartment community operators throughout Colorado and across the U.S. Her business was founded on decades of experience in property management and executive leadership as a third-party leasing and corporate housing provider.

Read on for this month’s Ms. Management Q and A!

Q. I’m a newer leasing specialist at an apartment community that is currently getting a high level of leasing traffic. As a result there is a heightened urgency on the part of potential renters to have their application approved over others. One such applicant has a carpet cleaning service and offered to clean the apartment they are applying for to expedite their application. When I hesitated he indicated that he would also clean the carpet in my apartment. This episode has got me thinking that this kind of favor for favor might just be a perk of the job though it could cause other problems. Do you have any advice for me?

A. First let me compliment you for having some second thoughts. Thinking through such potential conflicts of interest will help you set good habits early in your industry career. Let me ask, what is your company’s policy on such matters? Ask your supervisor for direction. Pose the situation as you have here and use other examples as well to help you determine the difference between a perk and a conflict. Usually there are one or more characteristics surrounding a situation that could be a conflict of interest. One is that your personal benefit whether directly or indirectly, any rebate, fee, commission, discount or other benefit, monetary or otherwise could be perceived as conflicting with the interest of another not being represented at the time; customer, onsite team, employer or property owner. Timing is everything and so if your supervisor is first notified in writing of the activity or potential conflict and consents in writing (fairly simple email exchange especially if you’ve had discussion previously) you’re probably on solid ground. An additional step might include a suggestion to your supervisor that this topic be included in a team meeting.
Also, be aware that someone might offer you something with their expectation left unsaid at the time. Do not hesitate to let them know that disclosure and approval from your supervisor are necessary BEFORE you can move forward AND your supervisor is going to need you to clarify what is expected.

This is a subject that needs transparency at every turn. So, review existing company policy with your supervisor. In your discussions ask for specific examples so you can understand unspoken expectations and WRITTEN DISCLOSURE and APPROVAL BEFOREHAND.


On March 29th and 30th, Vice President Lucinda Lilley, and Director of Operations and Marketing Melissa De Marco represented the Rental Housing industry in Sacramento. The San Diego County Apartment association was well represented with over 20 attendees, including independent rental owners, property managers and suppliers!

We held over 15 meetings with Senators and Assembly-members. While providing our policy makers with general information about our industry goals and objectives we also went over 5 potential bills and our positions.

AB 2003- Transparency and Efficiency in Unlawful Detainer Actions. We support this bill, as it requires residents to provide notice to the landlord about any habitability issues or concerns. Allowing said owner to remedy the situation.

AB 2312- Unlawful Detainer- Payment- We support this bill because it stops abusive and frivolous litigation. This bill would have residents deposit future rent payments with their attorney until a decision can be made about habitability.

AB 2502- Land Use Zoning- Inclusionary Housing- We oppose this bill.

AB 2819- Unlawful Detainer Proceedings- This bill would allow UD’s to be hidden from a residents credit if a decision is not made within 60 days. There would be no record of the UD and other landlords would unknowingly rent to them.  We oppose this bill.

SB 1053- Housing Discrimination- This bill would force rental owners to participate in the section 8 housing program. While we support the section 8 housing program, we oppose this bill. The time and potential money loss from participating in the program is to great to require of an owner.


For more information please feel free to contact us!

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Did you miss the event? Not to worry below are some points discussed. Visit our FACEBOOK PAGE for Photos!

Thank you to our refreshment Sponsor, Generation Contracting.


Lucinda Lilley, VP, kicked us off with new laws and changes affecting Real Property Ownership –For example

Current Hot Topics  

Mold – is now illegal in rental housing in California! – 10 days to remediate once you are notified

Smoke Detectors – in each bedroom, on each story, and in each hallway that leads to sleeping area, must have non-removable and non-replaceable 10 year battery


Rent Control – Change.org petition

Service Animals – AB2760 – seeks to require a prescription for service/companion animal

Unlawful Detainer Masking – AB2819 – seeks to provide masking of UD records in some situations leaving future landlords without knowledge of current or prior eviction

Section 8 – SB1053 – would require that Section 8 be considered “source of income” and therefore must be accepted by all landlords

Occupancy Standards – AB2685 – seeks to define the number of people allowed to reside in housing


Chris De Marco then continued with some current issues to watch for and the most common maintenance requests:


Eviction system ‘allows itself to be gamed,’ frustrating landlords

As Miller tells it, the tenants at one of his properties, a house in Calabasas that rents for $5,225 a month, stopped making payments last summer. Miller began eviction proceedings in August.”Six months later,” he told me, “they’re still in the house.”

There are even services that specialize in buying extra time for renters who know that eviction is inevitable but want to stay put for as long as possible.

An L.A. company called 866-Eviction markets Eviction-delay services such as 866-Eviction specialize in preparing stacks of go-slow court motions for clients. Typically, the client simply has to sign his or her name to the documents.

Julian Moutan, 866-Eviction’s office manager, told me the company “is just helping the little guy.” He said a few months of rent-free housing isn’t much to ask of landlords, “considering how high the rents are in California.”

itself online as the “#1 eviction delay service” and says it can deliver for clients “2 to 7 months rent-free.”


El Cajon Families Protest ServPro

March 21, 2016

by Carlos Correa

EL CAJON – Families and neighbors impacted by a chemical contamination in El Cajon gathered for a peaceful rally.

“We want justice, we want justice,” the crowd yelled.

Protestors say they’re taking a stand against Servpro, a water mitigation company.

The Morena family hired Servpro in December.

During the process workers used a non-toxic substance called Sporicidin designed to kill mold and mildew.



Handymen Defy Contracting Law at CSLB Sting in San Diego

Working as a handyman is fine – as long as that person stays under the legal limit for construction that requires a California contractor license. A Contractors State License Board (CSLB) sting operation last week in Chula Vista showed, unfortunately, that too many fix-it types are crossing that $500 line. Four who advertised as handymen were among the 17 persons cited in the Feb. 24-25, 2016 sting.

“We’re finding that many persons who bill themselves as jack-of-all-trades are uninformed, or don’t care that there’s a cap of $500 on the construction services they may perform,” said CSLB Registrar Cindi Christenson. “They may be able to fix small things around the house, but we often see self-described handymen taking on projects that are beyond their skill or experience level, and that can be dangerous.”

The sting took place at a single-family home just east of State Route 805. Investigators with CSLB’s Statewide Investigative Fraud Team (SWIFT) posed as the homeowners seeking bids on improvement projects such as tile and concrete work, new stucco, tree removal, and painting. They created a contact list of persons suspected of unlicensed contracting through online advertising sites, flyers, vehicle advertisements, and internal case files.

Eight persons who came to the house and turned in bids were cited on illegal contracting charges on the sting’s first day. Nine received misdemeanor citations on the operation’s second day, Feb. 25. Sixteen of the 17 were cited for contracting without a state license (Business and Professions Code (BPC) section (§) 7028). Officers from the Chula Vista Police Department assisted in the sting.

Besides handymen acting as licensed contractors, investigators found that persons offering landscape and tree services were playing fast and loose with state contracting laws. Seven of those cited submitted bids for that work well in excess of the $500 state limit; the highest was $8,000.


Most common Maintenance items we are challenged with daily.

Maintenance trouble shooting to save money and TIME for our owners and our renters.

  • Garbage disposal does not work:
    • When you turn it on what does it do?  Does it hum or is it silent?
    • Average cost to replace these days is $225.
    • Refrigerator does not work:
      • When you open the door, does the light come on?
  • Electric oven or stove top does not work:
    • Do you have any power to the appliance?
  • Gas range or stove top does not work:
    • Does the appliance have a pilot light or do they hear a click when they light? (electronic ignition)
  • Washing machine not working:
    • When you turn it on what happens?
  • My sink is leaking:
    • Where is the leak coming from and how bad is it?
  • My bathtub is leaking:
    • Where is the leak and how bad is it?
      • As an aside, make sure there is no water damage to carpet or flooring or drywall as a result of this leak – if there is, please take pics
  • My air conditioning isn’t working:
    • Do you really HAVE air conditioning?  If so, what kind?  Is there a box in the wall that you turn on? Or is there a thermostat on the wall?
  • My heater isn’t working:
    •  What type of heating do you have?  Floor furnace? Wall heater?  Forced air? Gas? Electric?
  • I have no hot water:
  • I have no water:
    • Did you pay the bill? J
    • My electricity isn’t working:
      • Did you pay the bill? J
      • Do you have electricity in any part of your home?
  • My roof is leaking:
    • From where?
  • I have a flood!
    • Can you tell where the water is coming from?
    • The first thing to do in the event of a flood is to stop the flow of water.

rent sense

Click on the picture to view the full article!


lucinda ed

Click on the picture to read the full article!

Ms. Management March 2016

Posted: 3rd March 2016 by Melissa in Ms. Management
Tags: , ,

Carol Levey, writer and creator of Ms. Management also appears as a guest blogger on Rent Sense. Her insights appear in dozens of other industry publications across the country. Carol is a regular presenter at the annual AAMD Education Conference, has served as MC Host for Award Events, and consistently over 35 years of volunteerism taught & authored curriculum for AAMD Education. She has been acknowledged for her outstanding contribution as an Industry Supplier becoming the recipient of the Jack Shapiro Award Winner twice; in 1987 & 1990.

Carol Levey is perhaps more recognized at the national level as an educator in the real estate industry. She served as one of the original team that produced the National Apartment Association coursework leading to the respected NALP designation. Her company Levey Enterprises has provided temporary leasing specialists, site managers and marketing offsite personnel to major apartment community operators throughout Colorado and across the U.S. Her business was founded on decades of experience in property management and executive leadership as a third-party leasing and corporate housing provider.

Read on for this month’s Ms. Management Q and A!

Q. I have been a regional inside a mid-size property management company for several years. I have also been active in AAMD, taking coursework for the CAM designation and serving on several committees. Now, some volunteer leadership opportunities are coming my way. I also look forward to other designations. However, my priorities and motives seem to be recently called into question by my employer. In my last evaluation at my company I was asked to defend my volunteer hours spent and value back to the company. My attitude and commitment about industry involvement has been consistent and fully supported by my company. What’s changed? Is it them or me that need to re-think the status quo?

A. Well I guess you know where I and many others stand about giving back to the industry that has given us so much. However, I have had to periodically re-evaluate my volunteer investment as a legitimate part of my professional and personal life. I would expect that you should as well. Do you value your employer’s opinion and believe they respect you? Why not ask for a transparent and direct conversation on this specific topic? It might be that the comments that you have mentioned originate because you have not put in the time and effort to have such an exchange.
Perhaps your company is re-evaluating the value of such involvement. Maybe someone has called it into question due to an employee lost to a competitor through introductions made at industry functions. Maybe a member company has utilized designated candidates as a backdrop for recruitment. If these concerns exist within your company it is because it happens and when a cost-benefit analysis is applied it could lead to negative conclusions. Don’t you want to contribute to these conversations by sharing how you think and feel? Perhaps you can round out the negative by sharing times and situations that your involvement has favorably introduced your company. Maybe, utilizing designated candidates as a qualifier for recruitment is valid because the education and the individual initiative needed to attend, participate and complete are that valuable? What if there are underlying problems that require addressing and/or safeguards put in place to preserve the value?

Here’s my point. Anything of real value benefits from re-thinking, fresh evaluation and thoughtful change by similar but divergent individuals and companies that continually want to improve. This is beneficial inside a company and an industry.

FBS Food Drive- Donate in Person or Online Today!

Posted: 29th February 2016 by Melissa in Rent Sense
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food drive


A recap of the January Education Open House

If you missed our first Open House of 2016 please remember that these programs are an additional FBS service to Educate Serious Real Estate Investors & Existing FBS clients in a convenient way.
It is also a gathering point for Our Network of Realtors & Industry Professionals. It’s good to meet face-to-face with the individuals that can help you achieve your goals.

This session emphasized the importance of including careful tax planning BEFORE any real estate transaction. We surround our clients with complete advisory services and ensure expected results with our management. However, whether a CPA or CFP or CPM you’re advised to reach out to let them know what you’re thinking beforehand instead of asking them to clean up the mess afterward.
Interesting story: the next day one of us was inspecting property with an existing client looking to acquire 3 apartment properties through an exchange. Now this is the way to utilize us best by bringing our management in to walk the subject properties together before finalizing the transaction. This way we can advise, so that realistic expectations are established and we’re ready to take over day-to-day property management at closing. During this time the client apologized for not attending the open house due to another commitment. Our representative indicated that he had missed an enjoyable time AND some great advice since we brought in a CPA that outlined Dos & Don’ts for 1031s. The conversation went on for a while then the client broke in. “Who was the CPA because I didn’t know what you’re sharing?” The answer was “Randy Goodsell”. He then exclaimed, “He’s my CPA. How come he never told me these things? Perhaps he did and I missed it” So you see that resources can be available but if unused aren’t very valuable.

We wanted to share some of the basic points in the presentation dialogue between Randy, Neil and Chris. Many of these points are included in a separate video session that we hope to introduce at a later time.

FBS Guidelines to Remember for 1031 Exchanges by Randy Goodsell, CPA

The reasons to participate in a 1031 exchange are numerous. There are specific timelines and procedures that must be followed to take advantage of the benefits of this program.

•Seller should have the contract specify that the sale may be structured as a 1031 exchange
•Seller cannot receive or control the net sale proceeds- the proceeds must be deposited in a qualified escrow.
•Replacement property must be like-kind to the relinquished property
•The replacement property must be identified within 45 days for the sale of the original property
•The replacement property must be acquired within 180 days from the sale of the original property.
•In a reverse exchange the taxpayer acquires the replacement property prior to the disposing of the relinquished property.
•Generally, the cash invested in the replacement property must be equal to or greater than the cash received from the sale of the relinquished property
•The debt placed or assumed on the replacement property must be equal to or greater than the debt relieved with regard to the relinquished property.


Standards for Serious RE Investors by Neil Fjellestad and Chris DeMarco

Real Estate as an investment remains a mystery to many. There are raving fans that believe or would like you to believe that real estate is a sure bet. There are also rash critics that see nothing but risk and loss every time real estate is mentioned as an investment alternative.

If we think about it both must be right to some degree. The purpose of this discussion is to illustrate that there are some realities that are ignored or misunderstood by both. Take a closer look to discover that there are standards for investment success. Whether followed or not, the outcome is reasonably predictable.

Standard #1- All successful investment begins with deliberate strategy and a plan. What are your personal objectives? Security against principal loss; potential or predictable growth appreciation; durability of future income; tax-favored investment return; inflation hedge and liquidity access are possible objectives to consider.

Standard #2- Successful investment strategy is more than one or two transactions: execution requires patience and allocation of resources. Performance can be measured and improved with “best practices” applied by trusted advisors and professional business managers.

Standard #3- Develop a philosophy of an independent investor. Real estate should be acquired and held long term (not sold) in order to qualify as part of a working strategy. Eventually, independent ownership without partners that is debt-free enjoys the highest investor rewards and pride of ownership. Many mistakenly think real estate is to buy and sell. This approach is dependent upon external conditions and the results are reduced substantially by costs surrounding these events. Transactional real estate is by definition speculative, not strategic.

Standard #4- Strategically held real estate is a long-term investment and must be operated as a business. To accomplish, a long-term hold ownership should include as many “silent benefactors” as possible. Silent benefactors provide investors with key business advantages. These benefactors include: lenders; renters; government taxing agencies; professional advisors and comprehensive property management. In all cases they sustain the real estate ownership as an operating business. Here are the primary advantages they provide:

I.Appropriate leverage (generally a minimum of 30% equity at all times) is the foundational principle that makes RE returns on invested capital the best in smart financial circles. Mortgage lenders have confidence in RE Investment. Don’t kill the golden goose.

II.Reasonable financing on balance with terms that are competitive and affordable are available for qualified borrowers. It is important to avoid and/or have plans to resolve: principal due dates, negative amortization and adjustable interest rates.

III.The real estate or a portion thereof should be rentable. Such capability enlists tenant(s) to provide an income stream, an interested party onsite, enhances the tax-favored nature of income and the deductibility of expenditures. Rented property also enjoys favored access to borrowed funds with better terms. Tenants provide the investor with long term staying power.

IV.Taxing agencies consider your investment a rental business whether one condo or an apartment high-rise because rentals are essential in the marketplace representing about half the households. Though government might provide health care, roads, water and energy rental housing must be provided by rewarding investors.

V.Real estate equity grows with every mortgage payment. These rental contributions to your forced savings plan will grow substantially over time. There are simple methods to accelerate this key strategy. Potential appreciation is an investment bonus.

VI.While spec build-outs and fix and flip schemes can have merit these are speculative in nature and normally not included in a personal investment plan. However, physical improvements to expand floorplan, reduce energy footprint or re-design landscaping are prudent methods to expand long term rental business profit.

Standard #5- Some rentable real estate is more conducive to an individual investment plan:

I.Property that is local is more easily understood and convenient for oversight. An exception can be a distant location with personal benefits. Example: Southern California property makes economic sense no matter where you live. In addition, such holdings might allow enjoyable tax deductible family visits.

II.Rent ability generally favors residential lease(s) of one year staggered to be renewed when leasing traffic is at a substantial level.

III.Rent should be readily comparable – floorplan, age, condition, neighborhood.

IV.Comparable properties demonstrate history of increase – rents, prices, value-added improvements.

V.Every rental should have an improvement plan that fits the neighborhood, has a payback horizon, and increases rental income.
Standard #6- Surround yourself with a team of real estate savvy advisors and hire complete property management. Expect transparent accountability; inspect operations; and receive monthly financial reporting. Annually align actual outcomes with financial expectations.

Standard #7- Keep your property investment appropriately maintained; improve to enhance rental value; accelerate pay down on loan(s); keep it simple; keep it in the family; just keep it. Avoid equity leaks from unnecessary transaction costs. Examples include: loan fees, sales closing costs, income taxes, and capital gains.

Standard #8- Be transparent with your heirs by updating your estate plan together. Enhanced results will be experienced when heirs are educated in the details of the investment strategy, the workings of the rental business that supports the investment performance, and introduction to your advisory team.