All Forum Posts by: Jeff Copeland

 What else would you do with them?

As I stated in my previous post, this is complicated by the fact that you already accepted payment for April, May, June, and July. On this point, you need to talk to your attorney. If I were the tenant, I'd argue you already extended my tenancy through July 31st. You can't have it both ways. And the judge might very well agree.

First of all, Eviction and Termination or Non Renewal of a Month to Month Tenancy are two completely separate things. 

Having your month to month lease terminated by the landlord is not an eviction. 

An eviction is a lawsuit where you sue the tenant for possession of the rental unit because they refuse to pay and/or refuse to leave and/or are violating some other term or condition of the lease. 

Are you evicting the tenant for non-payment of rent? In this case, you'd normally serve the tenant a "pay or quit" notice (it's called different things in different states, but that's the gist of it: Pay us everything you owe before this notice expires, or move out, or we're going to evict you.) 

Here in Florida, once such as notice has been posted, you MUST accept payment in full prior to expiration of the notice. You don't have to accept a partial payment. IF you do accept a partial payment, the eviction notice becomes null and void (but you could take the partial payment and serve a new notice for the new amount owed and start over). Sometimes this is a tough call: Do you take the money, or do you preserve your right to move forward with the eviction and get it over with?

Or are you simply terminating their month to month tenancy? If this is the case, then you should expect to collect the rent as stated in the lease through the time the tenancy expires, which you stated is March 31st. Assuming you served a legally sufficient notice, if the tenant stays beyond March 31st, you could then evict them for holding over, commonly referred to as a holdover eviction.

But this is complicated by the fact that I think you are saying you already accepted payment for April, May, June, and July as well? On this point, you need to talk to your attorney. If I were the tenant, I'd argue you already extended my tenancy through July 31st, and you can't have it both ways. And the judge might very well agree. 

@Elise Bickel Tauber - You pretty much just outlined the reasons why wholesaling (as it is sometimes practiced, and often taught by guru courses) is actually illegal in most states. 

Any person who performs the following activities, for another person, for a fee, is practicing of real estate, which requires a real estate license:

"appraises, auctions, sells, exchanges, buys, rents, or offers, attempts or agrees to appraise, auction, or negotiate the sale, exchange, purchase, or rental of...any real property or any interest in or concerning the same" or advertises the fact that they are doing so. 

This definition is from Florida, but is presumably similar in other states. 

At their core, real estate licensing laws are about consumer protection, for all of the reasons you outlined. 

The original lease was not month to month, it was a one year lease. That lease has expired. 

Now the tenant is month to month. You can think of it as a one month lease (as opposed to one year) that resets every month, and can be terminated (or changed) by the landlord with 30 days notice. It can also be terminated (but not changed) by the tenant with 30 days notice. 

You do bring up a good point though, in that you still want to thoroughly review the original expired lease. I've seen old expired leases that had odd clauses in them such as a 60 day (instead of 30 in NC, or 15 here in FL) notice requirement, and a judge will normally defer to the old written lease if there is a conflict (for example, it you gave them a 30 day notice of termination, they might have a leg to stand on in court if they chose to argue that the lease, which was the basis of the tenancy, required 60 days notice, even though it has since expired). 

Even though the written lease has expired, you don't want something buried in it to catch you by surprise. 

But this situation is definitely not a deal killer. I would much rather take over a property with month to month tenants than have 6-12 months left on a lease with a tenant I know nothing about. It gives you maximum flexibility.

Great answer and suggestions from @Kevin Sobilo, but this should have also been part of your due diligence prior to buying the property. 

Does STR use conform to zoning for the parcel? This should have been one of the first questions asked before going under contract if this was your plan for the property. 

If it does (and sounds like perhaps it does as a conditional use - based on what conditions?), then it's more of a permitting issue and there are usually ways to navigate the red tape, as noted above. 

Rich Dad Poor Dad is a great book. Just don't get sucked into the Kiyosaki Training Empire with its $30k training seminars!

The answer to some of your questions above is you plan for these contingencies. If you go into a BRRRR deal needing to be 100% accurate on your rehab costs and ARV, you will fail every single time. Nothing ever comes in exactly on time, on budget, or on forecast.

It often makes more sense to prepare and analyze a range of outcomes on a spectrum from 

Worst Case to Probable to Best Case. 

If you do your due diligence and inspections correctly, your worst case scenario should be break even - Sell the property for what you paid for it, walk away, and let someone else take on the project. It should only look up from there. 

For more info on the "rent by the room" aka co-living strategy,see https://www.biggerpockets.com/... - We recently implemented this strategy on a 5 bedroom 3 bath home in St Petersburg FL, and we have indeed doubled the rent and dramatically reduced vacancy and turnover costs. 

@Anurag Pulla - What do you do for a living? Whatever it is, I'm sure it "can be easily done with enough knowledge". 

That is the key. Property Management is a profession, and you have to know a lot of stuff about a lot of stuff. So just go into it with your eyes wide open and don't be fooled into thinking it's easy just because your professional property manager makes it look easy.  

Can you learn property management? Sure! Is it a wise use of your time? That depends on your location, employment and financial situation, investing goals, and several other factors that only you can answer. 

For a great overview of the breadth and depth of information you'll need to integrate be an effective property manager, check out http://www.evicttv.com/all-vid... (no affiliation, just a great repository of info and training topics for PMs and landlords). But note that even this comprehensive list still does not even touch on the systems, software, and other tools you'll need to have in place.

You can also do your own taxes and file your own lawsuits. But that doesn't always mean you should. 

All of the above posts are spot on. 

How much would it cost you to rip out all of the unpermitted work after the unlicensed contractor finishes it and it is discovered later on by an appraiser, another City inspector coming to inspect a permit for something else, a future buyer, or your future listing agent?

Or worse, a plaintiff's attorney who gets electrocuted by the unlicensed electrical work you did (which your insurance company won't cover)?

You're saving $7k, but creating hundreds of thousands of dollars in potential liability.  

Whether, when, and how you can cancel (and what the penalties are) will be dictated by the language in your contract. Find the paragraph about the inspection contingency and read it, or discuss it with your agent and/or an attorney. 

Worst case scenario is usually the forfeiture of your earnest money deposit. 

If they are legit hardwood floors, they probably can be refinished, up to a point. It's hard to tell from the photo, but it looks like there may be some buckling and warping from water damage (which is not uncommon near exterior doors) in addition to the scratches. This is much more difficult to fix than scratches. 

If they are laminate or some other product, then no. They would have to be replaced. A water resistant laminate plank, or high end LVP, might actually make more sense here if people are coming in from the beach/pool and wetting the floors on a daily basis.