All Forum Posts by: Tim R.

I believe you are referring to a Subject-To mortgage. If that's the case, there is the risk that the lender could call the note. 

Here are a few places to do some research on Subject-To mortgages.

https://www.thebalancemoney.co...

https://www.biggerpockets.com/...

I closed on my first investment property last week and found it on the MLS. It was listed for $200k, I initially offered $207,500 and renegotiated to $204,000 after reviewing the lease with the current tenant. The rent is currently $300 lower than market rate for the property condition and the lease status is being perceived differently by everyone that reads it. I feel as though the lease has been expired as of August 2021 but others are saying it auto-renews for another year indefinitely. To make it work, I asked for a reduction in price to offset the potential loss of revenue and the seller agreed. I am going to send a request for documents to be completed by the tenant along with a rent increase notice. If the tenant reads the lease as auto-renewing, I will implement the rent increase at the next lease renewal. If the tenant decides to leave, I plan to renovate the property and increase the rent to market rate for the area and condition of the property.

It means that the buyer paid too much for the property. For example, if the purchase price is $250,000 and it needs $50,000 in repairs and updating then the property needs to appraise for $300,000 at the very minimum. 

Hi Bob,

That's what I was thinking as well. A co-worker of my realtor seems to think it renews indefinitely. I'm leaning more towards the lease being expired and month-to-month. There is nothing in the lease that specifies it goes month-to-month after expiration.

Tim

I'm not exactly new to BiggerPockets, but I am new to posting and investing. I've been educating myself on real estate investing for several years and I finally pulled the trigger on an investment property. Here's a little background about me. I'm 42, and married to my amazing wife whom with I have a 2 year old son. He is my inspiration for getting over the analysis paralysis stage to actually taking action. We have been looking to move into a larger home with more land closer to my wife's family (about 45 minutes from where we currently live) so that our son can grow up with his cousin who is less than 3 weeks older than him. Unfortunately with the current market conditions and recent interest rate hikes, we have been priced out of a majority of properties that we are looking for. So we switched gears and decided to increase our income with rental properties. Here are some details about the deal along with lease question (I know that nobody can give legal advice, just trying to get a consensus opinion).

The property is currently rented for $1200/month, which is about $300 less than market for the condition of the property in the area it is in. Our offer was for $207,500 cash with a 30-day closing and our offer was accepted. Upon receiving a copy of the lease, it shows that there is a renewal term that reads:

STARTING AND END DATE OF LEASE(also called "Term"):

A. STARTING DATE:    This Lease starts on:          August 1, 2019     at 12 Noon.

B. ENDING DATE:       This Lease ends on:            July 31, 2020         at 12 Noon.

RENEWAL TERM:

This Lease will automatically renew for a term of One Year at the Ending Date unless:

A. Tenant gives Landlord 60 Days written notice before Ending Date or before the end of each Renewal Term

OR

B. Landlord gives Tenant 30 Days written notice before Ending Date or before the end of each Renewal Term.

With is being a gray area to me, I renegotiated the purchase price down to $204,000 to account for the possibility of lost rental income over the year. Once the tenant is out, I plan to renovate the property and increase rent to the market rate which is around $1750/month.

Tim

Hi Avery,  I'd definitely be interested in checking these out. 

Hello all BiggerPockets Members,

In October of 2016 I proposed to my, then girlfriend, in the Florida Keys. In September of 2017, I married that amazing woman in a massive cabin in Pigeon Forge. We heavily debated having our wedding in PF because of the destruction caused by the wildfires the year prior. We ultimately decided that we wanted to support the community rather than abandon it and we asked our families and friends to travel to the area from all across the country (80 guests from 13 different states). We love to travel and absolutely love the area and I would love to surprise my wife with a cabin for our anniversary this year. I've only been looking at deals on the MLS and I haven't gotten anywhere with that (not being quick enough, being outbid and over my MAO, and major structural issues). I'm turning to all investors in the Pigeon Forge/Gatlinburg area to see if anyone is interested in making a deal. I would love to buy a cabin that is already standing, but will absolutely entertain land where a cabin once stood. I would love to be part of the rebuild process for the area. My end result, whether it's build or buy would be:

3-4BR, 2-4BA

Incredible views from the property

Well-maintained if there is a cabin on the property

Close to PF, the spur, Gatlinburg, Dollywood, etc.

If you have something in mind, I'd be interested in taking a look at it and hopefully making a deal.

Tim

Without getting too much into the details, she's facing an issue with another tenant that I don't think is something that insurance would cover. The options given to her are to settle for a ridiculous sum of money, which she can't afford since she is retired, or sell her the property. If either of these happens, she could lose both properties because her house is mortgaged to pay for the rental property and is her main source of income. I'm trying to see if there is a way to protect both of her properties. 

My mother-in-law has a commercial retail rental property that is part of an association. The property is currently in her name and she has no encumbrances on the property. I suggested that she do something to either leverage the property or transfer it to an LLC, trust, series LLC or something of the like so the property is not a target for people who would try to take out a lawsuit against her.

With that being said, she is telling me that the condo association bylaws state that there can be no mortgages on the properties in the business complex where she owns the rental. Is this someone blowing smoke or is this something that is legally permitted?