All Forum Posts by: Bill Hamilton

You need to find a competent contractor to walk through and to discuss what you want to do. Maybe @Anson Youngwould be interested or could give you a name. Otherwise you are walking into far too many variables.

Are you saying the "buyers" illegally changed the locks on a house they don't own?

Hard to say if it's really a deal. Even for Denver. What is PITI on it and more importantly, what are your HOA fees? I would tend to think this is not really a deal when it comes to cash flow but with all the figures you will have a better idea.

Primarily because appraisers only get in legal trouble for over valuing a property. So when they know the contract price, why push the value over that amount and risk issues? Although I recently purchased a house where the appraised value came in more the 10% higher than the contract price. But I admit, that is rare in my experience.

This will probably sound harsher than I mean it too so please keep in mind I am not trying to offend anyone. I talked about this in another thread some time ago but.... Once when I was renting, I had a slow leak in the shower that kept getting progressively worse. I called the property manager to let her know about it. She indicated that it was probably just a washer and could I change it on my own. Trying to be a good tenant I agreed (I have changed many a washer over my life so no big deal. That weekend I got out my tools and went for it. Keep in mind these townhomes were built in the early 1960's. The hot water side was not budging so I applied greater force. That was when the pipe twisted and split. Ultimately what should probably have been a $50-$100 charge to have a plumber of their own choosing come out and do things the right way, turned into an emergency, weekend, nighttime call to a plumber. I have no idea what the charge ended up being, but I guarantee it was many, many times what it could have been. Point being, I would never ask my tenants to do any maintenance beyond changing an air filter on the furnace or changing light bulbs. I would only want a repair done on my house by the person I trust and choose. If a tenant is responsible for doing these things, they may attempt to do so without sufficient expertise or they may hire someone incompetent. Either could be a path to disaster.

And that is all without there being a law in place that says you can't do that. I can't imagine going against that. What happens when a tenant rats you out. And then whatever agency is responsible decides they need to look at all your leases. And then maybe they decide to fine the heck out of you for each one that is written illegally. 

OK. I am not a lawyer but.....no. Your attorney is wrong. The buyers did not fulfill their side of the contract. You are not obligated to extend. Out of not wanting to prove that In court, I would probably return their earnest money but with a standard RE contract, you would be entitled to keep their EM. I could go into much greater detail but the fact is you are under no obligation to extend. You don't even have to do anything. Just don't sign the extension and put it back on the market. Check with your RE agent. In theory, they should be well aware of the requirements, by law, of how this needs to work. But I can pretty much assure you that the buyer did not meet the timelines laid out in the contract and therefore the contract becomes null and void after the close by date.

p.s. check with another lawyer. One who specializes in real estate (or at least in contract law). And once you confirm what I am saying, fire your lawyer and never use him again for anything. Or post back here if I am wrong so that  I can adjust my opinion. Either way, let us know.

p.s. the bank statement or asset depletion programs don't always require a business so they might be able to help you now.

You can probably average your income from investments over the last 2-3 years and use that as income. There are also bank statement programs that will take your total income over 3 to 24 months and average that out. Start an LLC or DBA, open a bank account in that name and start running income through it (talk to a CPA first about any tax implications). It won't help you this second but could down the road. If the income from investments is sufficient (and not declining) then you can probably qualify for a conventional mortgage through Fannie or Freddie. If you go bank statements or asset depletion based on a non Fannie/Freddie, rates will probably start in the 6% range and go up from there depending on LTV, loan amount etc., etc.

I think these may point you in the right direction.

Change Date March 1, 2011

4155.1 4.B.2.a

Definition:

Principal

Residence

A principal residence is a property that will be occupied by the borrower for

the majority of the calendar year.

4155.1 4.B.2.b

FHA

Requirement

for Establishing

Owner

Occupancy

At least one borrower must occupy the property and sign the security

instrument and the mortgage note in order for the property to be considered

owner-occupied.

FHA security instruments require a borrower to establish bona fide occupancy

in a home as the borrower’s principal residence within 60 days of signing the

security instrument, with continued occupancy for at least one year.

I think a timeline of how things occurred might help here. At this point I disagree with those saying the tenants signed the lease, end of subject. Consider this.....how were the tenants to know that the water bill was very high? In comparison to what? I have lived in the Denver Metro area most of my life but I couldn't predict a water bill for any of the dozen or more places I have lived in here. There are too many variables between cities and water districts. I have lived in 3,000 sq foot houses where the water bill (during the winter) ran $40 per month. I have also lived in 1200 sq. ft houses where it ran closer to $100 per month. And these places may only be separated by a few miles. So the tenants may not have really known what was the norm until they talked to their neighbors. What was the timeframe after that? How soon did they call the city? How soon after that did they inform you of the problem? I would also say/agree that the plumber may have been at fault here. I know someone else commented that they miss things sometimes. Honestly, at what I pay a plumber per hour, I am paying them to Not miss things like that. Especially when it is that simple to check for.