All Forum Posts by: Mike Wood

@Bill TylerCould you buy the tax certificate or tax lien from the city/county? That would give you a proper coarse of action.  There are BP member that buy these, I don't.

I doubt you have much recourse if you just pay the taxes and have no agreement in place prior.

@Mike KriegAre you working with a broker? If so, review the appraisal with them to see if its legit.  I have found that duplex appraisals are not very accurate, and greatly depend on the appraiser, as there are less comps for duplexs.  Alot of appraisers seem to be lazy in find good comps, or maybe there has been limited sales in your area.  

It would not take much to notice errors in appraiser's report to get you the extra $5k.

Otherwise, you can talk to the sellers and share the appraisal report. Given that it did not appraise for the price, that is likely a problem for most buyers, as it will usually cause problems with financing.

@Abhilash Joseph While I don't use an eviction service myself (they seem to be rare here in New Orleans LA, as the courts/system are very landlord friendly), I would use one if the process was more difficult.  And it save you from getting your hand "dirty" so to say.

@Joey D. That is a very hard question to answer. I have three (3) duplex houses (two units), and my time to manage the property is not much. Obviously the more you want to do, the more time it takes. And the condition of the property also affects things.  For my units, I do all the repairs/issues myself (except for yardwork).

I would say my older duplex I spend about 75-50hrs a year, but that is all maintance (everything from minor fixed to large items like roofing). If I dont have any major items that need to be done that year, then its likely 20hrs or so (just minor issues plus unit turnover).  In my newer duplex's, that number is very low.  I no longer do yardwork or other monthly items that I can effectively pay someone else.

I will say that turning a unit over take time, between cleaning, repairs, painting, etc, I spend about 5-15hrs on each unit. In multi-unit houses, your turn over will be higher than SFH.

Hope this helps.

@Craig Smith My properties are in marginal/good areas, and often get the question about taking Section 8 (which I don't), so I understand your situation.

I might add that your issues may be due to the rent prices.  In marginal areas, charging higher rent than the competition has lead to tenant problems in my case. Bad tenants are willing to pay more given their bad credit and bad references.  Even being $50 over market rate, I see a dramatic drop in tenant quality.

 I have changed to offer superior features at market rate, or slightly under market rate.  Consider how much you would be willing to discount if you had no vacancy. My units go for around $900-1200/month, so one month less of vacancy is totally worth getting $50 less per year if you get a quality tenant.

@Cameron Price those rates seem right. I closed two loans earlier this year, one was a refi with cash out (which is what yours sounds like) and the other was a purchase loan. Both non-occupant residential loans). Both only go to 75% LTV per Frannie/Freddie Mac rules, but one of them was a cash out, with a slightly higher rate (4.75% for the cash out, 4.5% for the purchase).

The issue really is there is not much of a market now for the banks or brokers to sell the loans to.  Thus most loans need to conform with Frannie/Freddie rules.

Local banks will likely charge less points than brokers, so that is what I use.

@Craig Smith  Run away, don't walk, run!

While you might be able to get past the fact that they are ditching on the lease given what you smelled in the current house, the fact that they gave you a number for a landlord reference that was not correct is a sure sign that they are liars and will continue to lie.  

I have personally found that no good comes to tenants that can move immediately (unless your house/units are near a university at the start of school or you can confirm they currently live with parents).  Every time I have had this, it lead to them leaving in the middle of the night breaking their lease, or in eviction.

Save yourself the future eviction and pass.

@Jeff C. I doubt that would work. Remember that banks want to be first in line in the event of a default.  What it appears you are asking is the banks share the total loan equally, which will not allow them both to be first lien.

Talk to your banker, but I doubt that they will like that idea.  It also might be hard to get a loan with your partnership, unless you go with a commerical loan (as opposed to a residential loan in your personal names).

@Abhilash Joseph this depends on your state laws for Eviction. In Louisiana where the bulk of my rentals are, we have to give them 5 day notice pay or leave, then we can file for an eviction, which takes about 2 weeks to get in front of a judge for the eviction ruling. Given that you have no paid since May, I would not take the tenant's word for anything, and start the eviction process today. That will likely mean given them a notice to pay or leave, then filing after that time frame has passed.

If you wait till Thanksgiving, I would bet that they will give you another excuse and ask till Christmas.  Start the eviction now, as it takes time. 

I agree with @Jay Hinrichs.  With house prices in the $75-90k range, there is likely anyone can built a house on that lot and sell it for cost. Its likely that $80/ft2 for a small house is the floor on construction costs (1200-1500ft2).  If the lots are in developed areas (house next to the lots), the electrical/water/sewage should not be an issue.

If you think there is some future potential for the area, like multifamily or revitalization. They you could offer little for the lots now and hold on to them. But you will incur costs during holding, not the least would be lawncare and taxes.