All Forum Posts by: John Mireles

I live in the main house to which this unit is attached. My thinking is that I don't want to have a tenant in the back full time so using it as a vacation rental would provide the income without having to deal with a tenant right next to me all the time. I can also use it as a guest house I have outfitted the unit with everything necessary to live there - furniture, towels, utensils etc - and it looks really good. Spent about $2,500 getting it dialed in.

I do like the idea of a corporate rental. The house is close to the convention center so I see attendees as one of my target markets. Not sure how to directly tap into that market though...

I agree with Lynn. Everything needs to be documented and put into writing. If this goes to court, that letter will be exhibit A. Make sure that it's detailed, easy to follow - with bullet points highlighting important events - and unemotional. Just stick to the facts.

The fact that the landlord waiting until just a few days ago says a lot about the facts here. If your sister had just broken the lease on December 1, the landlord would have - should have - acted much much sooner. The fact that he's only acting now, more than a month later, confirms your sister's story. (Imagine a judge asking the landlord why he waited a month to go after the tenant if the tenant had in fact broken the lease. The judge just won't buy whatever answer the landlord manages to stumble through.)

And yes, your sister did have a lease, but the landlord agreed to end the lease because he had signed a new tenant. The fact that this new tenant didn't work out is not your sister's responsibility. He should have had her keep paying until he got the first month's rent and security deposit in hand. The fact that this guy is inexperienced or just dumb is not her fault. Same thing with the busted pipes.

At this point, I would respond with that detailed letter and politely tell the landlord to pound sand. The next move is his.

John

I have a triplex property where one of the units is a small one bedroom attached to the main house. I was originally going to lease this unit as a regular rental but instead I'm now thinking of going the www.airbnb.com or www.vrbo.com route and rent it out for a few days or a week to travelers coming to town. Living in a destination city as I do and near downtown makes me think that this might allow me to bring in more rent than I would just as a regular rental. I know it's more work but how much more I've yet to find out. Anyone have experience to share?

Sorry to say but you have a mold problem. Somehow, somewhere, there's mold creeping around in that house. Could be in a wall, under a cabinet, under a floorboard, behind a bathtub or even in the vent ducts. While there may be various ways to kill the odor once it's in the air, that's not enough if you're going to be renting this house out. All you need is to get some tenant in there who realizes that there's a mold problem and then the next thing you know you've got a sick plaintiff with a lawyer suing you for toxic mold. The risk is just not worth it.

I would bring in a mold/water damage remediation expert. Look in Yelp to find one who's recommended in your area. They'll be able to bring in their moisture detectors and their trained eyes (and nose) to figure out exactly where the problem is coming from and then tell you how to fix it. If it resulted from a specific incident, you may have an insurance claim on your hand.

Yes, it's going to cost more to go this route, but it will be cheaper over the long run.

Great tips that I've already taken to heart. I do have one thing to add that I haven't seen anyone address. The mistake that I see my fellow landlords make all the time is to treat their rental units as "it's only a rental" and then just put in cheap everything and make the property as bland as possible. Finding good tenants is much like finding good home buyers - you want them to fall in love with the place.

If all a landlord does is put in the bare minimum without any thought to aesthetics, he or she is going to get the bare minimum tenant - and the problems that result. It doesn't cost much more to do more either. Paint is the same cost no matter what color it is. Instead of bombing the whole house with Navajo white, try different (neutral) colors in the rooms. Don't be afraid that you won't appeal to every tenant because ultimately you want tenants who appreciate a higher level of detail.

Too many landlords treat the business from purely a spreadsheet keep-costs-low perspective. But creating an inviting experience for the tenant ultimately adds to the bottom line because you can charge more in rent and get more stable tenants. The next time you catch yourself saying "it's only a rental," think again.

I've got a mixed use commercial property that I bought in 2007 that I need to refi this coming March. The market's gone down since then and the banks are very conservative. The comps in my area are all terrible. It's a historical building (which means 1/2 off my taxes) with four well-maintained units that have been consistently occupied and I'm cash positive each month (about $900 before taxes etc). All the comps (of which there's only a few) are dumpy single occupancy commercial that don't even compare. But they are what they are and I have to deal with them as there's nothing else for the appraiser to go by.

Depending on how the appraisal goes, I may have anywhere from 20% equity to no equity in this property. (Value range is $700k to $530k.) The property is in an area that's about to blow up in value so I don't want to lose it. What options do I have besides conventional financing? Is hard money an option? Any suggestions for making this work with conventional financing?

Any help or suggestions would be much appreciated.

John

Thanks for the responses. I understand that debt forgiveness is going to be an issue for the borrower. I'm just wondering if anyone has actually been through the process or assisted anyone who has? In doing some research, I understand that after the short sale, there's generally a negotiated settlement on the remaining amount. I'm curious as to what percentage of the amount outstanding is actually paid.

Please... With all due respect, if corporate America has demonstrated anything over the past five years, it's that it's as American as apple pie to avoid the consequences of taking risk. If my money can go to bailing out giant banks that made outrageously stupid decisions, it can also go to someone who made an earnest decision that ultimately didn't work out.

John

Has anyone here ever defaulted on an SBA 504 loan. How is it dealing with Colson's Servicing? Did they attempt to enforce the personal guarantee? Was bankruptcy required?

How about a short sale? How was that handled? Did you have to stop making payments?

Any info on disposing of an SBA backed property that's underwater would be appreciated.

John