New to Real Estate · DFW · Member since 2021 · 14 posts · 3 votes
Hello bigger pockets universe! I first want to thank everyone that have responded to my other posts recently, as a noob investor, you guys have given me the courage to go for it and that's exactly what I'm doing with the intentions to pay it forward as I grow. Now, I'm in a bit of a predicament, with the cost of closing on a house here by the end of the month, I did not factor in the breaking of the lease. I was told $4500 as penalties so I figured I can squeeze that in the budget somehow. Now, after I've signed the forms to break they are telling me I owe $6700 because the first month was free only if I complete the leases full term. I can not afford it. I was told of programs for first time home buyers to assist with breaking leases but I just can not find that info anywhere. I'm afraid that I just might lose this deal as worse case scenario because I will not be able to afford closing nor immediate repairs on the property. Does anyone know of such assistance programs or have any good tips or solutions on how to overcome this horrible situation I got myself into? Thank you !
Lots of local codes regulate how much a lease breakage feee can be charged. We had to break a lease once and offered to pay two months rent (lease break fee in lease was 1 mo, plus security deposit) as well as find a new tenant. They agreed, but then started tacking on extra fees and such. Consulted lawyer who noted that city only allowed prorated rent to be charged for the time before it was re-rented. Found a tenant two weeks later so only wound up being out the security deposit. Check your local laws.
Real Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
4y
Hey @JoDaniel Vazquez, this is an awful situation without a doubt. Just my opinion and your comfort levels might be different. I would talk to your property manager and tell them you can't afford the break lease fee and see if they can negotiate on it. You never know. If that doesn't work, think about if you are ok with having that go to collections. Your home will close by the time that happens so you aren't risking your deal. As long as you aren't planning to use your credit score, it might make sense to take a hit for a couple of years while you pay that back.
Hey @JoDaniel Vazquez, this is an awful situation without a doubt. Just my opinion and your comfort levels might be different. I would talk to your property manager and tell them you can't afford the break lease fee and see if they can negotiate on it. You never know. If that doesn't work, think about if you are ok with having that go to collections. Your home will close by the time that happens so you aren't risking your deal. As long as you aren't planning to use your credit score, it might make sense to take a hit for a couple of years while you pay that back.
New to Real Estate · DFW · Member since 2021 · 14 posts · 3 votes
4y
@Brad Hammond , Never thought about going that route, probably because I've worked really hard on my credit for many years with absolutely no blemishes on my records and to go from that to having a default on my report, is cringing. I will add that into one of my options but most likely would be the absolute last resort as I do want to get this home and try out the BRRRR method and repeat this by the end of the year.
Lots of local codes regulate how much a lease breakage feee can be charged. We had to break a lease once and offered to pay two months rent (lease break fee in lease was 1 mo, plus security deposit) as well as find a new tenant. They agreed, but then started tacking on extra fees and such. Consulted lawyer who noted that city only allowed prorated rent to be charged for the time before it was re-rented. Found a tenant two weeks later so only wound up being out the security deposit. Check your local laws.
Lots of local codes regulate how much a lease breakage feee can be charged. We had to break a lease once and offered to pay two months rent (lease break fee in lease was 1 mo, plus security deposit) as well as find a new tenant. They agreed, but then started tacking on extra fees and such. Consulted lawyer who noted that city only allowed prorated rent to be charged for the time before it was re-rented. Found a tenant two weeks later so only wound up being out the security deposit. Check your local laws.