All Forum Posts by: Chris Taylor

@Bob B.

Yeah!? What were you thinking?

@Scott P.

I guess I won’t know until I’m put into this situation but as of now I’d do cash for keys over the eviction process any day.

Maybe I should blame the bank because my property lost $60k in value between 2006 and 2008. I could have simply stopped paying my mortgage, which may have been a better business decision, and got out from a mortgage that was under water. Or maybe I should just be a responsible individual and pay my debts because that’s what I agreed to when I signed up.

To put it in perspective... my mortgage has a two week window for payment. I can pay anytime between the 1st and the 15th without being charged a late fee. But you have to keep in mind that I placed a down payment at purchase, I’m responsible for all taxes, utilities, and insurance. And if something breaks I have to pay for the repair costs. A renter has none of these responsibilities but in a lot of cases have the same rights.

@Igor T.

You’re right. It does apply is some cases. The article mentions it’s more prevalent with big corporate property managers. I don’t think that is the mindset of you’re typical rental investor though. Article seems to be one sided too. They don’t mention the small time landlord who gets screwed over with eviction costs, damage to the property, and vacancy until finding another tenant.

Some people have been sharing news articles on the forums and I came across one today that I thought I'd share.  Basically, the author is stating that landlords are using late fees and evictions as a source of income much like banks use fees for income streams.  I have yet to purchase my first rental, but in my opinion, this is a bunch of crap.  My understanding is, and this may differ from state to state depending on laws, but the eviction process is very lengthy and expensive.  I would say the late fees hardly make evictions worth the time and hassle not to mention the legal expense.  I assume that is why some landlords do cash for keys.  I don't know about you but I would personally try to avoid the eviction process at all costs.  After all wouldn't you rather collect rent checks consistently instead of having turnover?  And whether you rent or own there is always someone looking to get their money ON TIME.  Link to article below.

The eviction crisis is starting to look a lot like the subprime mortgage crisis.

@Michael Wilson

It sounds like The Denver Home Ownership organization extended an incentive given to owner occupants. Many times in my area HUD homes that have been foreclosed (HUD REO) are offered to owner occupants for a certain number of days before investors can offer. In your case it sounds like this time period was extended and if your offer is accepted by the bank then you would only put $100 down. I don't think this property has when to auction since it is still being offered exclusively to owner occupants. Additionally it sounds like you'd be eligible for a 203k rehab loan which is basically getting a single FHA loan for both the purchase and rehab. Only caveat is that you cannot self perform the rehab. It must be done by a professional contractor. Good deal nonetheless if you qualify and plan on staying for a year or more. You'll just have to make sure how long you are required to occupy the property. This is just my interpretation of the information you provided so I could be incorrect.

I would say any correction, downturn, or crash is bad for flippers. And I’m no expert but if the market does dip, I’m willing to bet it will go back up again eventually. Money is still cheap right now. Rates are still below what they were pre-crash (2008 +\-). I actually read mortgage rates dropped last week. That being said, buy and hold investors should be fine assuming you do your due diligence.

@Nathan Asher Robson

I don’t think anyone can time the real estate market. I’m a newbie but I’d say that your property/investment analysis should factor in market conditions and you mitigate your risk the best you can. Meaning you can find a deal in any market as long as you do your due diligence. I would also say that buy and hold investors (rentals) are impacted less in a down turn than people who flip. Generally speaking your mortgage payments on rentals are fixed and won’t change no matter what the market does. And people who rent from you are just as likely to rent in a downturn.

I have read that historically the overall real estate market goes through 16 year cycles. Things crashed around 2008 so using that metric there’s another 5 years plus or minus before another downturn. How accurate is this? Who knows.

Real estate markets can be very localized so this may not apply in your market. I know that my home lost $60k in value between 2006 and 2008. I recently got an appraisal and it is worth about $5k more than what I bought it for. So if it was over valued in 2006 then maybe at this point the market is where it should be.

@Brad Swaney

I guess you’d be foolish if you don’t consider an extra $9600 a year for allowing pets. Just ask yourself “would I rent to them if they didn’t have pets?” and “can they feasibly afford the additional $800 per month based on income and credit report?”. I’d just be curious why they can’t afford to buy a home if they can afford an extra $800 on top of their rent. Seems like a high premium for pets or school district but I guess it’s probably cheaper than private school. Depending on the types of pets and if their financials and background checks come back okay I’d probably do it.