All Forum Posts by: Frank Martielli

I just don't understand, I really don't. If a tenant is really having a problem, generally speaking of course work with them especially if they have been honest and are communicating. 

I'm not in favor of forgiving rent, but deferring a mutually agreed upon portion and deciding on a mutually agreed upon repayment schedule. Sure.

If the tenant honors the agreement, waiving any late fees, not taking further action. Yes.

But why are so many tenants of the mindset that all of a sudden they don't have to pay their rent just because there are no consequences?

What happened to integrity? Honor? How about you said you would?

Again, I do believe in working with a tenant under these current circumstances. Working with a tenant doesn't mean a landlord tells the tenant, no breaks, no deals, I want my rent. That's not working with.

Working with also doesn't mean flat out refusing to pay the rent.

Working with is clearly in the middle somewhere.

I thought about the language to put in the next lease a little more. How do you all like this:

Since the original security deposit was used as payment for rent, both parties agree the replenishment of the security deposit will be considered due and payable as rent. "Due and payable as rent" is a very powerful clause and I've never had any push back from it.

For every 5 business days the security deposit is late, a late fee of $50 per week will accrue, due and payable as rent.

The security deposit must be paid in full for the late fee to stop accruing. 

@Joe P. Just wanted to comment that I love your first deal advice. Going from a renter to having tenants paying for your mortgage. A huge leap forward, while keeping things as simple as possible. That's a home run in my book for a first deal. Now you can catch your breath and start preparing for the next deal. 

I would just add that you will never be a first time buyer again with that golden ticket of a 3.5% down payment if you are eligible for FHA. Meaning I personally would not be looking at anything but 4 family units.

Using the security deposit for the rent is mandatory if the renter requests it. 

I've been thinking, if and when it comes time for the renters who renewed their existing lease to replenish the security deposit what is going to compel them to do so? The EO can't "make them" nor does it really seem a priority of the order, in the grand scheme of things. Surprise, Surprise.

I sure know what I would be including in my lease renewal if it applied to me. Something like:

Tenant understands and agrees that on X date they will be required to replenish their security deposit in full due to the fact that they.....blah blah blah. Tenant agrees to do so upon receipt of an invoice from LL. As a courtesy to the tenant, the invoice will be presented 30 days prior to the due date.

In my crystal ball, I see a lot of court dates.

@Paul Welden - Thank you Paul for your insights. I didn't know much of what you are posting. 

First question, can the lender require a consultant if one is not necessarily required in a specific case?

Second question, from where do the consultants obtain their pricing? Is there a standard? I would like to take a look at what they are using as a reference myself if at all possible since from what you are saying it plays a huge role.

Third question, how much input do I have on the selection of the consultant? Does the consultant "work" for me, or the lender?

I do favor the Homestyle just because of the extra flexibility it provides vs. the 203K. Just in terms of what I know what I'd be looking to do, Homestyle would be the better option for me. I don't mind the additional down payment requirements. After all, it's not like you are spending the extra money.

@John M Chludzinski  Thank you John, I appreciate that. However, I am looking to transition from plan to reality. At the moment I'm trying to zero in on some contractors. I've looked at a few in NJ that willingly do work under these circumstances, but to compensate their prices seem to be exorbitant. 

I don't mind paying a little more to a contractor to have to "deal" with this type of financing since I know it isn't exactly ideal, but not willing to pay what I seem to be encountering so far. I was hoping a contractor would respond to this post to be honest. Just because the renovation cost is going to be tacked onto the mortgage payment doesn't mean I want to be viewed as one big blank check. I am posting on biggerpockets, after all.

While this is going to be my forever home, I don't need the meticulousness of Michelangelo painting the Sistine Chapel necessarily with the accompanying rates that would go with it. If this was a good, better, best type of deal, I'd be looking for high good across the board, crossing into better with certain things that were specifically important to me. 

It is not a matter of if, it has gone through. Our governor signed the order.  

I worked very hard to get to the level of success I reached. In the beginning, while I was working 50-60 hour weeks, living way below our means, not buying the latest this or that, driving cars till the wheels fell off, not going on fancy vacations my friends and family were doing all of this and more while almost laughing at me that I wasn't. However, to this day most of them are still renters and still wonder aloud how I "did" it. Who is laughing now?

I would consult with an attorney at this point. I believe an attorney can still file the paperwork, it just won't be acted upon until the courts open up, but at least you could start the process. I think it's worth the $500 to make sure it is done correctly. You could also reach out to Turbo Evict. While I have never used them personally, I have read positive reviews about them. I would suggest you do some research and see what options are available to you, and start something. Your goal should be to rid yourself of this tenant, ASAP, as quickly and as inexpensively as possible. I would even try cash for keys if you think that would work. Best of luck.

@Vaughn Smith  That is true Vaughn, perhaps. The issue everyone has is that it is being mandated. A landlord HAS to do this. Prior to this there was nothing stopping a landlord from using the security deposit for rent if they decided to. Wouldn't you agree?

Now it is no longer a choice. I really believe there is a legal problem here, especially if I have it in my lease that the security deposit can not be used for rent, which I do.

Government has just decided they can go ahead and modify an existing private contract between two willing parties. Is that the government you want? I sure don't.

1) I would never rent to a tenant who is collecting unemployment if that is their only means of income.

2) My standard before this is rent can not exceed 30% of gross income. That is a good standard. If there are two tenants renting from me that aren't married, I try to make sure at least one of them meets that standard on their own for situations such  as this.

3) My lease states that all tenants are equally responsible for the entire rent, not that each tenant is responsible for half etc. While that is in legal language, I am simplifying it here. From our point of view that is a very valuable distinction and I've never had a tenant question it.

4) An eviction occurring now tells me a tenant had no problem staying somewhere they could no longer afford instead of leaving voluntarily, and for that matter, stayed until the last possible second. Why would you even consider renting to someone who you know has displayed such behavior?

Let's just say you would never be my property manager.