All Forum Posts by: Jeff Bridges

I think @Wayne Brooks is trying to say that a note is not collateral. A note (promissory note) is where one party promises another party to pay someone a set amount on agreed terms. It's an IOU. If someone were to be able to borrow against your note, then what would there be to foreclose upon if you did not return the money you borrowed. They have no recourse. Your note is already dependent on someone else paying you that cashflow so you could pay them their agreed terms. You can sell your note (aka future cashflow) at a discount or whatever you can negotiate on the open market but that about your only remaining option for extracting cash out of your note.

I have a single family unit available for sale for 120k on MLS. It has been lowered several times and is 90+ DOM. buyer presented lowball offer of 100k cash with buyer paying all closing costs to my agent. I countered with 110 buyer pays all closing costs. 110 with buyer paid closing gets me the same net as 120k with me paying the closing costs, so I get 110k net either way and thats fine with me. Seller then countered with 110k and split closing cost. That would put me at 106k net at settlement. I think we're 4k away, but I'm staying firm with needing 110k net. He has several rentals in the neighborhood and looking to grow his portfolio, so it appears hes definitely interested in this unit. I countered that i cant move from there. He came back at accepting the 110k plus all closing costs paid by buyer, BUT he wants me to place a tenant there first and he will take it occupied. That presents alot of work for me and liability of dealing with tenant if the deal doesnt go through. Somewhere between the 2 negotiations, he became worried about filling the vacancy presumably before the fall/winter. Any recommendations on countering and getting him to accept his offer and no tenant contingency? I'm motivated to get this sold and move on to a better performing rental. I would even accept seller finance for the 10k and take 100 of it in cash for a short term 12 month note if that helps him agree to the higher amount. thanks in advance!

so by those proposed rules, if a tenant deems it necessary to sue the landlord because they are unhappy with whatever bothers them, then the landlord shall foot the bill for tenant legal representation. That sure sounds nice for the tenant and like a raw deal for the landlord!!!! 

Yes it is frustrating how slow the approval and inspection process takes, but you've passed those hurdles and got your check. You need to be working on finding and vetting a contractor, getting estimates, and resubmitting them to insurance if they dont cover your costs in the check they supplied. thats currently on you and depends how many guys you find and schedule to come over to estimate and give a bid. You need to get at least 2 and evaluate availability to do it, and quality and creds. 

Now that you have submitted a claim with your homeowner policy, your ability to interact with the contractor insurance is low. they prefer to deal with your company adjuster as that is who they will have to negotiate with. Like in court, you can't get tried by 2 district attorneys at the same  for the same crime; they only want to deal with the DA that actually can negotiate who is responsible (your insurance company). You've agreed to let your own policy subrogate on behalf of you to recover the repair costs. You'll now have to get your answers from your own policy rep and ask for status updates, but ultimately regardless of who accepts liability, your only recourse is to be brought back to pre-loss condition financially. That check you got from homeowner most likely got you to that pre loss condition. You cant get pain and suffering damage from your contractor, so you might have to move on from wanting more legal recourse.

Your main job I think is to make sure your costs are being reimbursed based on contractor bids and to ask for more if needed (its all a negotiation with insurance).  2nd job is to make repairs and move on.  Let us know what your policy holder rep is saying and what action they are planning for recovering the repair funds from other policy. Just like with real estate investing, your primary job is to take action and not wait for something to happen. Just think if this were a rental and you cant get it rented without making repairs and getting rent ready. You and your neighbor need to move forward with repairs. Let us know what insurance rep says about all of this... They should have good feedback for you.

A couple of questions: Why is the contractors insurance dragging its feet? What did they say about their clients liability for the previous repair? Did they come to inspect the repairs yet? Did you take pictures of the installation before you demoed? Who identified that it was a improper repair job and did you share that report with the contractor insurance? Did they say that April is too far back to show its contractor was at fault?

From my understanding as someone who just went through a contractor liability claim, you have 2 options: go  through your homeowners insurance and they will then subrogate with their lawyers through the contractors policy. Or make a claim directly through contractor policy. You already made a claim with your homeowners policy and had a check cut for those repairs. You could possibly withdraw your claim if you dont cash the check, but you should check the details with your homeowners to see if still possible. But if the contractor policy wont accept liability, then your main option is to file through your insurance and let them handle the rest. You'll only pay your deductible if they are not able to recover the money from contractor insurance policy. You might be too far down the pike with your own homeowner claim.

What else are you waiting for with regards to legal action? You should be evaluating the insurance companies reason for not accepting liability and see if it has good merit and worth pursuing, but if you have all of the documentation showing that the contractor was unlicensed and a report from another inspector or the adjuster from contractor insurance policy showing improper installation or anyone, your insurance company should take it from there and recover your deductible from the contractor policy. This way you can begin repairs and your neighbor can also do their repairs while the insurance companies duke it out... it's ideal to avoid a loss on your own policy, but if contractor policy denies your claim, thats your only choice. Feel free to seek a lawyer anytime, just trying to offer some thoughts from my experience with the issue.

Be sure to start getting contractor quotes to make sure that their bids are under the amount you got for the insurance amount for repair.

good luck and hope this helps..

here is some info on reverse mortgages:

https://www.consumer.ftc.gov/articles/0192-reverse...

some key takeaways: There are fees and other costs to originate the loan that get added to the balance borrowed.  You owe more over time (interest gets added to the balance each month and your total amount owed grows and compounds). Interest rates may also change over time (most are variable). They might also require a set aside amount that is held to pay tax and insurance during the life of the loan. You can choose to pay off the loan at any time but it will be the future amount with interest that has compounded over the years and will not exceed the then (future) appraised value of the home.  It will likely be closer to market price if the owner has taken out most of the equity from the property over the duration of the reverse mortgage. Not much value for you unless you want to keep the house in the family and have the money to payoff in full.

purchase price for what end purpose? Your line of questioning has changed from what possibly could the condition of a townhouse that has been vacant for 8 years (dunno, you have to budget as if you have to rebuild from studs since you cant see inside and determine if that level of effort/cost is still worth your time) to what should be a good purchase price. It's like you are outsourcing your entire decision-making process to strangers on the internet:) We dont know your end goal or the neighborhood or HOA condition and financials. If I took a random stab for a flip that price would be would be 65% of ARV- cost of a full gut renovation to minimize risk and ensure there is some level of profit, but I am just a random investor and don't have to deal with a nightmare 8 year vacant property and the rehab headache that might follow.

Another thought: You could also purchase 2 (or as many as you need) used window AC units on craigslist to put in the key rooms, and then resell them on craigslist when you are done using them. The portable units are more expensive and actually less effective in cooling than most window units due to their design per consumer reports.

Don't call the insurance company to verify if they allow trampolines (that's asking for a premium increase). Assume they don't like them and will raise your premiums if you allow them or didnt report you had one and there was an injury on your property. I would notify your tenant that it is a lease violation and not permitted by your insurance company and have it uninstalled immediately. I always get asked if there are trampolines on my property when getting a new policy, so expect that it will be a factor in your premium and or is just not covered. People injured on your property will go after the biggest source of money, the landlord... don't give them more ways for them to do that..

Thanks for everyone's feedback.

Here is the before after with the kitchen:

New cabinet Hardware(hinges and handles), laminate counters, new plumbing fixtures, new appliances, LED lights and LED retrofit recessed lighting, laminate flooring.

Before:

After: