All Forum Posts by: David Oberlander

I've heard of many reasons to decline funding a mortgage over the years but this one is a new one to me.

From a HARD MONEY LENDER not a bank. You'll recognize the name when I post it (not now) as they advertise here on BP. When I pull up the list of HMLs for Florida they pay to be near the top of every page. Their reason for declining was "The subject property is a legal non-conforming use that cannot be rebuilt to it's current configuration and density." The property is not a true duplex, it's 2 separate houses built on the same lot in the 1950s. It's always been used as rentals with only 2 years out of the past 25 being homesteaded (That requires owner-occupancy). It's a total of 3 beds and 3 baths. The present mortgage balance is 25% of the value and we wanted to re-finance to 50% and use the excess cash on another property. It would also be our 4th loan thru this HML. It presently NETS $500 a door (that's no typo).

Now, let's go over their excuse. Rebuilding the property requires it to be 85% destroyed by fire or flood. We have both insurances and if it was destroyed the insurance would pay off the morgage and leave us with $50K.  but if the larger house was destroyed that would only be 66% (and the smaller house 33%). So they would be paid off if the property was destroyed.

 But if I wanted to rebuild the property I could put up a 5 bed/ 5 bath house worth over $400K. Three houses like that went up this year on the next block and 6 more are under construction one block north or south of the is property (same neighborhood).

They won't be the first HML to lose my business. I just don't like the idea of hitting up family and friends for private money. So fellow BPers what do you think? Do you have a bigger BS excuse for having a loan declined?

@Brian Ploszay  Issues? And what do you consider NEWER construction?  Is only less than 2 years old new enough? Because there's one huge national homebuilder that would rather face lawsuits than build houses properly.  Hundreds of lawsuits in Florida, California, Texas, etc even after signing class actions agreements to fix homeowners' problems.  Their business model is to cut corners and wait for the lawsuits because most people will end up walking away

@Nicholas Hamblen     There are many properties owned by landlords who don't care and many tenants who don't care.  Just remember the name of that **** landlord and never do business with him again.

On the application form you took from her.

You did verify before renting, right?

@Jeff Caravalho

Did you take applications and verbally agreed to rent the property to one of them?

Are you a licensed Property Manager? Are you a licensed real estate agent working under a broker? Better call your broker right now and the firm's attorney on Monday.

You should know the rents in the neighborhood before you even place an ad.

Horrible people? No.

Unqualifiable tenants? Yes

What are your Property Manager's written standards for tenants?  (Probably nothing)  Are you paying him the usual rate? One month's rent plus 10% of every month after?  Well then, of course, he wants to rent it to them, he's worked threee whole months FOR NO MONEY (/sarcasm).  "They seem like nice people" is an unacceptable reason to rent to them.  Why the nicest people I meet are the ones trying to rent from me when I have an opening.

I think you need a better PM if your property has sat vacant for 3 months.  I don't care if it's your sibling/cousin-FIRE him.(If the PM is your mother you can keep her.  Just make her do a better job.)

Here's how I rent property.  After I place an ad on Zillow I'm swamped with calls (30 first day last June) I set 6 appointments in a 3 hour window and call back starting 1 hour before the first appointment.  People who fill out the app before leaving (4) get processed.  The ones who want to email it back to me? Yeah, I'm still waiting for those 2. LOL  The first applicants(2 guys in their 20s) met my requirements and therefor got the house(1st in line). And they are my youngest and slowest paying tenants.  (Despite having 4.5X the monthy rent in income. Verified in writing.) If they're late in February (sort of like betting on the Patriots to make the playoffs.), they are getting a non-renewal notice for May 31st.  They will then be someone else's problem.

And the property will be re-rented out within one week.

Landording is only as hard as you make it. Find the way to make yours easier.

Just did a quick price/availability check on Home Depot's website.  My local store has 8 200 amp load centers priced cheaper than the cheapest 150 amp one.  Indoor or outdoor and up to 64 circuits. So it's not the parts cost that's a concern, just the labor.  Most panels don't have enough wire to be moved 2 feet further away. Running new wire is expensive.  I'd find a way to move the refrigerator if that's possible.

If you use a licensed contractor, get permitted, and have it inspected your insurance company will be much happier.They'll have 2 people with deeper pockets to go after when someone gets fried playing with the panel while standing in water.  LOL

Outdoor panels were the standard down here in Florida until about 15 years ago.

@Sunny Burns  The first thing you should have asked is "Why do you want this vanity replaced?"  I see 3 answers-the vanity is too small, the sink is too small, or I want some drawers.  The first reason you can't do anything about because of the toilet and heater locations.  The second can be solved by a new top with a larger, deeper basin for under $100 in materials and the third for a minimum cost of $230 in materials.  (Your labor cost is different from mine no matter what.)

If you decide to do this & have them pay some cost you need to remind them that the vanity becomes a fixture (permanent part of house) and stays when they move out.  And this deserves a small rent increase at next lease renewal.  More if you go with something other than Glacial Bay.  Like Nancy said "There is a price for happiness" and I add "How much do you (the tenant) wish to pay?"

One of my duplexes is stuck with 18" vanities so some extra shelves and towel bars helped me there.

First off, the numbers from Brandon are useless UNLESS you are buying in Indiana.

Carlos, are you buying property with a building on it in Florida?  Then here are some of the catagories you will be paying for.

1. Title company/attorney fees.  You need one or the other on your side, not the sellers. (And they can give you exact figures on everything.)

2. Government recording fees on the deed and mortgage.

3. State/county/city transfer taxes on the deed and mortgage.  Your bank's name is Joe Seller.  Federal banks always claim exemption from paying their share so you may have to pay all of these.

4. Owner's title insurance.  To protect you.

5. Homeowner's insurance.  If I was Joe Seller I'd want proof of this.

6. Survey.  Again, to protect you.

7. Home inspection and termite inspections are good to have done but you'll generally pay them when they are done.  Not at the settlement.  Did you account for them?

I've seen other "nickel and dime fees" added on so again the best thing you can do is contact your title company or attorney and get the numbers from them.

There is no St Petersburg Craiglist as you already know because you're a smart real estate investor like myself.  You have to go to Tampa Craiglist and subdivide by county.  But I need to warn my fellow landlords about the latest(? LOL it's not that new) scam because  it affects YOU.

There is a St Petersburg RUSSIA Craiglist and if you look at it in the Apts/Housing for rent section you will find only listings for apts/housing in FLORIDA.  There are 23 ads from scum trying to steal money from people there today.  (Until I go back and flag every ad)  Most of course ask for money upfront by Western Union (or similar).

They took the photos used from your ad somewhere else.  They got mine from Postlets which I found out after one applicant called back and told about the ad (for less money of course).  The scammer had sent her a long sob story about his charity work and need to leave the state quickly for his job.  Then 3 other people found our office phone number and called me after talking to this scum.  I did not like being bothered this way.  

Neither Postlets or Craigslist will help attempt to stop them so it's up to us.  I've flagged ads there before and I will do that again in a few days.  You can look there for a few laughs today.  Please help out and look there occasionally and flag any ad you see.  If it's not in Russian it's a fake.

Thanks, David

Only net leases, if possible.  I have one multi-family which only has one water meter so that I pay (and keep an eye on).  All the others, the tenants pay for water/sewage, electric, cable, etc.  Trash is the only exception.  I don't want that being "missed" but it is usually included in the tax bill.  Let them pay for what they use and they'll waste less. 

And you don't have to spend your time paying their bills, too.  Another benefit.