All Forum Posts by: Jason Quick

It is not that there is going to be an increase in rates, it is the velocity of the increase that is most important. Clearly, they are taking it slow. Additionally, if rates are increasing, that is presumably because the economy is growing, which would be a net positive for real estate. Unfortunately, it is really difficulty/impossible to try and time the market. The market could experience a large correction tomorrow, or 10 years from now. It will eventually, but it is impossible to know when. 

Call a lawyer and ask for an estimate for the eviction action, they should be able to tell you that for free. Ideally, you should negotiate it as a flat fee. As a lawyer, I strongly advise you NOT to take legal advice from non-lawyers. Some of the advice above is completely wrong. Someone else's anecdotal experience is completely irrelevant. 

I just completed the Master of Science in Real Estate program at the University of Florida and have been investing for a while. Never heard of the 2% rule until this website. I would say the 2% rule is overly simplistic, but if you can achieve that sort of return, then it is probably a good deal. 

To conduct a proper professional-level analysis, you need to determine what your holding period is going to be. Then, pro forma all of the forecast income and expenses and figure out what your return is going to be for the holding period. You also need to account for up front capex, capex, insurance, and an adjustment for post sale property taxes. You need to project what you will sell the property for after the holding period. Then you need to decide if that return is sufficient to compensate you for the risk you are incurring (levered IRR, unlevered IRR, and average cash on cash).

Leverage can increase your IRR significantly, but it also increases risk, a hard lesson that was reinforced from 2007-2009.

You will have to execute a deed that complies with all of the legal requirements for the transfer of real property in your jurisdiction. You generally would not use a warranty deed for this type of transaction, but rather a quitclaim deed. No one can give you proper advice without reviewing all of the documents and facts associated with your Property. You should find an attorney to handle this for a low flat rate. This is not legal advice, just general information. Good luck!

You should know that a rule of general applicability limiting the number of occupants per room has been deemed by HUD to be generally reasonable. Their interpretation is specifically discussed in a memo named the Keating Memo. HOWEVER, in the memo HUD goes on to say that the presumption of reasonableness is rebuttable and they will consider the following factors:

1. Size of the bedroom and unit 2. Age of the children 3. Configuration of the unit 4. Other physical limitations of housing (i.e. capacity of the septic, sewer, or other building systems) 5. State and local law 6. Other relevant factors, such as 7. if the landlord has made discriminatory statements 8. if the landlord has taken steps to discourage families with children from living in its housing 9. if the landlord has enforced its occupancy policies only against families with children

I am writing this because a lot of landlords wrongly believe they can just institute a 2-person per bedroom policy and be fine, but that is not the case. There is no bright line rule unfortunately. As always, this is just general information, not legal advice for any particular situation. 

Wholesaling:

(1) Enter into a purchase and sale contract or option to purchase a Property with a right of assignment

(2) Assign (aka sell) your rights to buy the house under the purchase contract or option to another investor

(3) Collect your payment for sale of the assignment at closing

(4) The other investor buys the house

Real estate agents (some are "realtors" members of the NAR):

(1) List a Property you do not own or represent a home purchaser

(2) Collect a commission based on the sale of the home

Wholesaling is simply selling an assignment, the same as any other contract assignment that can be sold. This one just happens to be for the right to purchase a house based on the purchase and sale agreement you already entered into. It usually requires no special license.

So, they are not related, but there can be some issues if the price you sell the assignment  for is based on the sale price of the home or somehow construed as a "commission." There can also be issues if you list your assignment payment as a "fee" in the closing documents. Generally, only licensed real estate agents can collect a commission on the sale of a Property they do not own. If you collect a fee based on the sale price of the Property, you are at risk for unlicensed sale of real estate. Good luck!

Disclaimer: This is not legal advice. It is general information on wholesaling and real estate agents. Contact an attorney licensed in your state for legal advice. 

Way to go Brandon. Getting your license is one of the first things any real estate investor should do. Getting a commission split in an acquisition is huge. The money in this business is made on the buy. 

It is also important to remember that it is every insurance company's mission in life to AVOID paying out any benefits at all costs. So, you are often times going to have battles. One with your own insurance company to get them to honor the policy and another with the actual litigation. Insurance should always be a last resort, not a primary defense. 

The commercial areas of practice described are far more complicated than residential, so she could probably handle it. However, you might want to look for an attorney that is working regularly on chain of title defects, title insurance, closings, landlord/tenant issues, etc. In Florida, many real estate attorneys also issue title insurance as agents and are equipped to handle closings. That type of lawyer might be a little more well versed in what you need as a new residential investor. Good luck!

I would also warn you to be skeptical of cap rates on specific deals. There are a ton of different to calculate and report them. For example, are we giving a cap rate on the pro forma year 1 cash flow, trailing 3 month NOI adjusted, trailing 12 month NOI adjusted, etc.? They are calculate many different ways and reported inconsistently. Definitely focus on overall market trends.