All Forum Posts by: Bill B.

If you can’t get them out before you take ownership get a PM involved. Otherwise Be prepared for up to a few months of no rent and an introduction to the eviction system in your market. (Hence the PM). 

Hopefully you have a signed estoppel saying rent amount, amount paid, security deposit amounts, who owns appliances, and any outstanding “promises”. You don’t want to be the owner when the tenant says sure I’ll move out, I just need my $5,000 security deposit back so I can move out all my appliances. Don’t forget the previous owner said I get 6 months free rent at the end of my lease to look for a new place…etc. 

I too was going to ask about the buyer not paying the property taxes. He would have lost them just the same if he owned them and not paid the taxes. 

How long ago did you dad pass? I BELIEVE the estate can only be sued for a year, maybe 2?

find out if the signed buyer’s “contract” only had 1 parcel, if so, that’s what he bought. He did get 7 years of “free use” tell the buyer how much they can buy the two other parcels for and see if they want you to exercise the rights for them before the properties sr epermanently lost. Find out if there wa title insurance or errors and omissions insurance will cover the amount to buy them back. 

How do you know their name or credit score with no ID? Are you sure you don’t know the name and credit score of somebody they know?

Start the eviction process. Hire a PM with the provision their in-house legal team team or eviction lawyer they often works with helps you get this person out. Saving one month’s vacancy will pay for their fee for a year. Otherwise next month you’re still going to be wondering what to do. 

Do you have any equity in your primary home?

Do you have any credit left on your existing Heloc?

Home much do you need for how long? Little enough to sell a car? Short enough time to use a credit card? 

Any retirement accounts to draw against?

So if the average tenant pays every month, nothing breaks and they all stay a year. 10 out of 12 months you’ll be missing 1 rent and have turnover costs. So if your rent is $1,500 you’ll end up with $3,000/yr cashflow. Minus 10x turnover costs. If it costs $300 for each turnover (I’d expect $500) you’ll have cashflow of exactly ZERO. Again, assuming everyone pays and nothing breaks. :-)

Back when I got started (1999/2000) I used to get final approval on “questionable” tenants. (Lower credit score but based on medical debt. Shorter employment history but new to area, or recently divorced.). That all went away around 2005? 

I kinda liked being “involved” but the reasons I choose to use a PM are…

Know current market rent and keep up with increases

Charge late fees I might let slide

Have a list of contractors that want to keep them happy 24/7

Keep up with current law changes regarding notice periods, charges allowed

Keeping my screening/applications legal. 

With a dozen properties I work 30-60 minutes per month. 

So while real estate can be extremely boring, it’s one more thing the experts do for the amount we already agreed on. So more power to them. 

Did anyone go to jail or are you saying they stole $30M and had to payback $34M four years later? Like a 2% interest loan? 

@Mike Klarman gave you one heck of breakdown. The only thing I would add is you want to have access to another 20-50% in some sort of already approved credit line on another property or a credit card. 

Think of it this way. You do that deal and suddenly find out it needs a $10k sewer/main waterline or foundation work. You get a stop work order, or permits take longer, or your first contractor flakes on you. If you had exactly $50k. You either lose the whole deal back to the wholesaler when you can’t finish or try like crazy to fire sale it for $20-$30k off fair value IF you’re lucky. (The buyer may not be able to get a loan if certain things aren’t finished.)

I’m probably being overly safe but you won’t complain if you don’t have to use all your money. 

I’ve used Allstate in NV/MN for more than a decade. If you have more than 5-10 properties your local agent may need to convince All state to take them all. 

Ps. You get discounts on your personal insurance of up to 20% once you have a few policies with them. 

Check your local state and county laws/regulations. 

I sold a lake cabin with septic in MN 5 or 6 years ago.  I had to have it inspected. Not only did it have to pass, the inspecting company had to guarantee the system for 4-5 years.