All Forum Posts by: Allen B.

There have been some policy changes by Fannie and Freddie to continue to let tenants pay the rent.

In my opinion this has been one of the most idiotic policies of the mortgage crisis. The banks foreclose on a house and have someone in it paying enough to cover the mortgage payment and then they evict them and then sell the house at a loss. (especially after it is vandalized while vacant).

All they had to do was let the tenant pay the rent and it would be performing for the bank. I have even seen banks foreclose on a duplex and evict both tenants and then the duplex is vandalized and they lose a ton of money.

I have also dealt with a number of tenants who have just put down a deposit and an option fee to see the house foreclosed a month or two later.

Definitely has been a problem.

One other problem not mention is that a quit claim deed will end your title insurance coverage. If you do transfer the property be sure to do use a warranty deed or get a closing agent to get a new title insurance policy.

Even though you may view yourself and the llc as the same, legally they are not. Just picture the scenario if you sold your property to someone else and use a Quit Claim Deed. Do the buyers have any recourse if there is a title flaw?

When the city owns the water department it is very common that they can place a lien on the property. In my area, several of the cities in North Mississippi require the water bill stay in the owners name PERIOD.

Through years of going through the motions you have described, I have found the best practice is to add the average water bill plus $10 onto the rent with a clause that tenants will have to pay for excessive water bills over average. It is still a pain as since it has to stay in the owner's name the owner has to forward the bill to us to verify.

I would happily manage a property for Noi. The catch is you give me $100,000 and I pick the property and manage it and you cash checks. Problem is most people bought properties too high or deferred maintenance.

The problem with proiperty management is that if everything works out perfect, then you are just doing your job. If a tenant is late, then you aren't living up to expectations. If a furnace breaks down at Friday night at 6 PM... etc.

I have found we have to screen the owners we work with just as much as tenants. I know there are bad property managers out there, but sometimes expecations are too high.

This is a complex situation and I would run this past an enrolled agent or tax attorney. I do know that a land trust or single member llc would be a definite no.

If I was in your situation I would look to form a joint venture with your cash partners where you are compensated your percentage when property is sold an they take title. Otherwise forming a c corporation that you both have shares. The IRS lien enforcement manual is here and you may want to review it.
http://www.irs.gov/irm/part5/irm_05-017-002-cont01.html

This is very common. I have helped investors buy 4 properties this month that the interior was not seen until after the contract was signed with a contingency inspection. 2 went perfect and 2 required additional negotiation with seller. If you are unsure how to proceed in a situation, then you may want to work with a buyers agent that will look out for your interest.

The only answer is to have someone who you can trust eyeball the property for you. You can trust what the seller says, but you always have to VERIFY.

Our real estate agency is based on doing everything that out of state investors need to do to invest in our market. We select a property and prepare a rough estimate of rehab cost and verifiy that with contractors once property is under contract during the inspection period. We then oversee the rehab process and then manage the property for the investor.

Typically, people come visit us and we show them similar deals and jobs and give a tour of Memphis, but there are other investors that I have never met and have sold them a lot of properties they have never seen.

Obviously, it is easy to get taken advantage of at a distance. We have many people call us once they have already bought the property and very often they paid twice as much as they should have and it is in a bad neighborhood.

Not really in MLS, but use the county data. If the mailing address for tax bill is different than the property that is a good lead. An even better one is if address is in another state.

It is possible that the Trust department at the bank is involved. For example they may be the trustee of an estate and selling it to invest the proceeds.

I would not assume the agent is lying. Just make an offer or move on.