All Forum Posts by: Account Closed

Hope this went well.  And, no, you didn't have to put them up in a hotel.  However, be aware, if this type of thing goes too long they can complain to the city and they might condemn the house for occupancy--then the tenant has to move.  But, I'm assuming your plumber got on this quicker than that.  (If a house has already been condemn, that might be cause to put a tenant up in a hotel until the repairs are made.  Also, if work is being done on a home whereby lead-based paint hazards might be created (like during window replacement, etc.) and there are children living there, it would also be a good idea to have them stay somewhere else until the work is done to avoid potential lead poisoning issues.  (Check RRP regulations for lead safe work practices.)

Straight from my attorney's mouth (not sure it answers your exact question though):

"You could technically accomplish this but I would expect the bank to be much less inclined to do so since they have already gone to the effort of foreclosing. The question is slightly deeper because the short sale could be frustrated by rights of any other redeeming parties (second liens) but I would assume the question already takes that into account. After the auction, the bank is owed the amount it bid at the sale which typically equals the total debt or the value of the property, whichever is less. Since the bid may already reflect, in the bank’s mind, the value of the property, that may be the lowest number that they would accept already via a short sale."

You'll need to be a loan originator (or use one) and become a licensed sales person/broker to do more than a couple of seller financed deals per year in Michigan.  You (or the originator) will also need to follow all the Dodd-Frank rules for determining the buyers credit worthiness, etc.

FYI:  The Poverty Law group in Michigan is pressuring law makers to enact new laws to seriously impede seller financing with land contracts, lease to own or leases with options to buy.  Our state lobbying group, which I'm part of, is fighting these draft bills...just be aware that the spotlight is on you.  The group's main concern is buyers being unaware of back taxes owed, liens and/or the condition of the property (per the housing code).  They claim the unsuspecting buyers are not sophisticated enough to understand the process of due diligence, and--even though they qualify for the $5,000 price tag of the home under Dodd-Frank--they are unaware of back taxes owed, outstanding liens, condemnations by the municipality and the how much work would be needed to bring the property up to code--not just remodel it to their standards as the homeowner.  So, in some cases, these buyers put down a chunk of change, start the remodeling process only to lose the property under the contract/lease for failure to comply with tax payments and/or commitments to remodeling and repairs conditions.  In these cases, the buyer is unable to recoup any equity since mortgage/note financing was not used.  (These land contracts/leases/lease with options are typically done without the involvement of a title company which would discover these issues on behalf of the buyer.)

To avoid future issues (and accusations about your intent), at the very least, if you're going to do these types of deals, I recommend following a best practice of:

• Qualifying the buyer using Dodd-Frank rules.
• Disclosing back taxes/utility bills to the buyer.
• Disclosing any known outstanding municipal notices/condemnations and where the buyer can find out how to get the property back into compliance.
• Using documents/contracts written for use in Michigan.
• Record the land contract/lease/lease with option.

This will come down to how a judge feels about it...and, most, will say that painting between tenants is a usual and customary part of doing the business--even if you have to use Kilz (some landlords simply tint Kilz the color that they wish the unit to be to avoid putting a coat of paint on).  

The previous landlord should have evicted the tenant for not complying with the non-smoking part of the lease.  When a landlord let's a tenant continue doing something in violation of the lease beyond the next rental payment, some judges will infer that the landlord has accepted the behavior.  It is always a good idea to respond quickly with a warning letter for lease violations and follow that up with an official eviction notice if the tenant fails to comply.  This goes for things like smoking, pets, long-staying guest, etc.

Here's a list of some:  https://rpoaonline.org/contractors-vendors-category/property-management/

Foremost Insurance is a great option for vacant property insurance.

I'd be happy to help.  Feel free to private message me.

@Jason Blain  I'd recommend David Hill for your attorney and Duane Culver for your accountant.

In Michigan, since this involves a rental, most police departments will say this is a "civil issue" and not something they will follow up on.  Otherwise, I'd call an attorney on this one...sometimes it's just best to use professional help...especially since this involves a purchase.

I would concur with @Matt Souza to a degree--except, maybe, the last part.  Those more up to speed on licensing law in Michigan have stated that anyone that is paid by someone else to show or close leases must be licensed, think leasing agents working for the owner, etc.  This, as far as I know, includes employees.  I'm not sure why a State of Michigan website would say such a thing--but mistakes are made.   Here's the actual law on who needs to be licensed for what:

Michigan’s occupational code, we find a very broad definition capturing any individual or entity that:

…who with intent to collect or receive a fee, compensation, or valuable consideration, sells or offers for sale, buys or offers to buy, provides or offers to provide market analyses, lists or offers or attempts to list, or negotiates the purchase or sale or exchange or mortgage of real estate, or negotiates for the construction of a building on real estate; who leases or offers or rents or offers for rent real estate or the improvements on the real estate for others, as a whole or partial vocation; who engages in property management as a whole or partial vocation; who sells or offers for sale, buys or offers to buy, leases or offers to lease, or negotiates the purchase or sale or exchange of a business, business opportunity, or the goodwill of an existing business for others; or who, as owner or otherwise, engages in the sale of real estate as a principal vocation.

Chatting with someone from the Michigan REALTORS would likely be a good place to get confirmation as they would be the ones most interested.

It's also important that whoever is doing the leasing is trained in all the laws around leases, RRP, fair housing, landlord-tenant law, tenant relationship act, HUD, lead disclosure law, eviction laws, etc. Owners can get into big trouble when their staff makes mistakes in these areas--especially fair housing and lead. Of course, owners should also know all of this in order to know whether or not their employees are doing things correctly.

Happy investing!