All Forum Posts by: Nick Bolding

@Nathan Harden said it well. 

Step 1: Re-screen the person staying the house, get updated pay stubs and statements to ensure they can afford it. If not figure out if it's worth re-negotiating rent or getting them out of the house with the understanding that they are now terminating the lease, etc. 
Step 2: Have them sign a Change in Tenancy Agreement Amendment. Texas has one as part of their TREC forms, check with your local REA as they may have something. Typically in this form they have the person staying and acknowledging that the Security Deposit is staying with the property, then it has a slot where the person leaving signs as well. 
Step 3: Have the person moving out, sign a move out letter stating that they have all personal items removed from the property. Any and all personal items remaining at the property will be subject to being disposed of by Landlord, etc etc. 

That's how I've had to handle these situations in the past. Good luck!  

Tyreek, 

Such a painful topic with most investors. Working in Property Management for almost 6 years, yes I'd say it's incredibly important to set money aside for vacancy. As everybody has said previously, just make sure you have reserves set aside for any event that may happen. That may prevent you from enjoying cash flow, but will pay off better in the long run. 

In other words, like I have explained to hundreds of investors. Don't live off of the cash flow. Try not to use any of that cash and use it for personal expenses. Let it snowball so you can have the funds available for additional investments, additional repairs, or additional upgrades in the property. 

@Frank Geiger I will need to continue to network as you suggested. Thank you for your input sir. Much appreciated!

@Aaron K. Thank you for your input! I’ll take your advice and just hold the property for 6 months then do a cash out refi.

@Frank Geiger @Mike McCarthy & @Aaron K. Thank you for the answer. All are definitely consistent in regards to the why so thank you for that but in the other hand how does the BRRRR method work if Fannie Mae requires a deed/loan to be held/seasoned for 6 month before you can do a cash out refinance? Sorry if these questions are dumb I'm just getting into the investing world and an adoring investor and am really trying to get on the other side of property management.

I have a property that I am closing on and was originally going to BRRRR it but a couple of issues occurred in this...

1. My wife fell in love with the house and wanted to move into it.

2. The bank is telling me that I have to hold the deed in my name for 6 months before I can do a cash out refi.

I contacted a local mortgage bank and they were happy to refinance but they said due to their limitations as a small mortgage lender they don't have the ability to refi the 70% LTV of the appraisal but could refi the bridge/hard money loan used to acquire the property.

I was then recommended to speak with a regional bank to see if they had a better product that would fit my immediate needs and they stated the following:

120mth full pay out 4.45%

180mth full pay out 4.50%

5/1/30ARM 4.625%

7/1/30ARM 4.75%

10/1/30ARM 5.25%

If you do not intend to reside in the property as your primary residence, it will be considered an investment property

The main problem is that the house is being purchased with a hard money & the rehab is being done with a HELOC.

Is there a way where I can refinance without the seasoning deed? Both for primary and/or investment? Is doing an investment refi/cash out what exactly would happen if I did that option but lived there? I know these questions may sounds dumb, but I can’t say I was expecting this outcome on this deal...

@Nick Ferrari

Nope in Tennessee TREC rental agreement shows the resident is responsible for the remainder of their lease. It is also common law in the state of Tennessee which supersedes the lease if push comes to shove in a court room. I represent a property management company in court on a weekly basis, unfortunately.

@Jim Morris

I work in Property Managemebt and I hear these emails, texts and phone calls at least 20 times per day.

In my opinion $200 isn’t worth the head ache.... but on the other side, I like to stick to my guns (morally speaking).

So if I know I am in the right as long as you did all that was required of you by your state laws with the inspection, notice of repairs, property documentation of property condition before and after and you weren’t a slumlord while renting it out, then they don’t have any trucks up their sleeves and will be stuck paying your court costs when they lose.

It’s also very dependent on your state and if it’s a landlord friendly or tenant friendly state. Some states are pro tenant which makes general sessions cases a pain for owners.

My wife and I currently have a paid off house and I have been itching to invest in real estate but my wife has been hesitant. We have began the process to apply for HELOC with a Regional Bank. We are trying to make a good sized draw to find a renovation on a family property to move into. After moving into the other property we will rent out our current which will have the HELOC. However, my main question (which may sound dumb) is, "in this scenario would it be better to Refinance the house, or go through with HELOC?"

I know the capital/liquidity would be the same but I’m wanting to know the major advantages of one over the other.