All Forum Posts by: Marc Winter

Trust but verify.  

The issues here are no ground rules in writing, no structure, no time benchmarks of progress, no weekly photos, no real oversight from you, the investor, and being far too patient with the con-tractor.

Other than that, it's a sweet deal.  

@Sylvia Castellanos

Your post is timely:  we are currently negotiating through a similar sale.  In PA, we call the land bank a "Tax Repository".  Property with past-due tax is auctioned off.  Those parcels that do not sell at the auction are placed into the Repository.

Title companies in PA don't underwrite insurance for lots purchased from Repository and being resold within 365 days of the date of purchase from the Repository.

We have found that closing this transaction is available through a closing organization or attorney. They will require an extensive waiver signed by the new purchaser, as well as a detailed title/abstract report for the buyer's review. 

These are all cash sales, so no mortgagee title insurance policy is needed.

The alternative:  in PA, to satisfy title insurance requirements, the seller must hold the property 365 days before selling again.

Hope this helps!

Has MIA removed all their personal property/possessions from the subject unit?  Has their mail been forwarded?  Do you have emergency contacts listed on your application and/or lease agreement?

One approach to this issue is to send a certified, return receipt letter to each individual tenant stating your terms: MIA needs to sign off on abandoning their portion of the agreement, etc.   

When the letter to MIA is returned as undeliverable, do not open it, keep it in your file for evidence in the event of court.  

Future reference: if it takes 3 unrelated persons to pay rent and security, and/or if these tenants are students or otherwise just starting out, having them jointly and severally responsible is just the start: get the parents/guardians or some other 'established' and related adult to co-sign the lease.

This info is based on my personal experience.  I am not an attorney, and this is not legal advice.  Speak with your legal professional.

It might depend on what type of trust the title is held in.  I've used inter-vivos revocable trusts dozens of times, and they are a great vehicle for what they are designed: estate planning, anonymity, and a "bit" of asset protection.

You'll need to shop for a lender that will allow your parents to close in a trust.  Some will allow, many will not.  

Your parents might have to take title out of the trust, put it into their name, close the loan, and transfer title back into the trust.

Also, be aware of any state transfer taxes that might apply when those title transfers occur.

Other than that, if your HELOC is an adjustable rate, your new 'mortgage payment' will be adjustable too. There are a few lenders that offer a fixed rate based on the actual draw time. I'd go for fixed rate every time.

Good luck!

Have the seller remove the basement tenant before closing.  Then you can decide lease or MTM for the legal tenants.

Remember, it's not only the basement tenant that can give you headaches; if either of the 2 legal rentals has a problem with you, they can withhold rent, contact the city, and make you wish you were a tenant yourself.

If you are counting on the rent from the basement to make this deal work, I'd move on to the next opportunity.  Just not worth the risk, imho.

@Brandon Archambault,

Love is a beautiful thing.  So is business, when conducted well.  Each one is simple, but not easy to grow.  Mix them together and seldom will either blossom.  

You have all the real estate expertise.  Your partner has a demanding job outside of real estate.  Who do you think will be doing most of the heavy lifting?

You want to make a 50/50 LLC partnership?

From personal experience I can tell you it's all fun and giggles until stuff goes sideways.  Then you not only have a business (partner) problem, you've also messed up your love life.

I'd think long and hard before trying to decide 'who brings what' to the table, or if you really want to sit at that table at all.

Not saying a life partnership and business partnership (as you are describing) can't ever succeed, but the odds are not in your favor. 

Hi @Ray Pantle

You can still make cash flow in Scranton, but the margins have been decreasing.  

Now it comes down to getting a great deal on the purchase side. Lots of folks have been going the BRRR route. Of course that takes a lot of local coordination with contractors.

I like the surrounding small towns around Scranton for long-term hold investment.

Answers to this post depend a lot on your jurisdiction.  We have dealt with the death of a single-occupant rental.  It was a bit hairy but manageable.  If in doubt, consult your state and local regulations or a legal professional.

Steps to take:

Secure the Property: You must ensure the property is secure, such as changing locks if necessary, to prevent unauthorized access while respecting the deceased tenant’s belongings.

Notify Relevant Parties: Contact the tenant’s next of kin, executor, or estate administrator. If an emergency contact was provided in the lease, they can be notified. However, the landlord is not typically responsible for locating heirs.

Lease:
In most jurisdictions, the death of a sole tenant terminates the lease, as the tenant’s estate is not obligated to continue paying rent unless specified otherwise (e.g., in a fixed-term lease). However, the estate may be liable for rent until the lease is legally terminated or the property is re-rented.

Notice Period: many states require the landlord to wait a certain period (e.g., 30 days) after the tenant’s death before terminating the lease, allowing the estate time to manage affairs.

Dealing with Belongings:
Do not immediately dispose of the tenant’s personal property. You must store (or secure) the belongings for the legally mandated period (e.g., 30–60 days, depending on the state) and notify the estate or next of kin to retrieve them.  You must know your state's l/t laws to stay out of trouble on this: If no one claims the property within the required timeframe, the landlord may be allowed to sell, donate, or dispose of the items, following local laws (e.g., holding a public sale in some states).

Cleaning and Re-renting: Once the lease is terminated and belongings are removed, the landlord can clean and prepare the unit for a new tenant. The estate may be responsible for cleaning costs if outlined in the lease.

Death-Related Issues: If the death occurred in the unit, some states may require disclosure to future tenants if the death was due to violent crime, suicide, or certain circumstances. 

We had to deal with this: biohazard cleanup when death was unattended or involved hazardous conditions, often at the estate’s expense.

Last thoughts: 
Document everything (condition of the unit, communications with the estate).
Avoid entering the unit or removing items without legal permission to prevent liability.

Consult an attorney or local landlord-tenant resources to ensure compliance with your state's laws.

The question should not be the 'price'.  I'd focus on the 'value'.  What is the cash flow?  Will it net you a decent return on your money?

Other than that, I would make ABSOLUTELY sure of the numbers, especially rental history, permits, utilities, etc.

Good luck with this one!

@Matt Tortora, now is a great time to start your investing.  Since you are brand new, the first thing to do is define the geographical area you are most interested in.  

Start locally--close to your home--you can always expand your net after you know what you are really looking at. Become an expert in your local market by going out and inspecting property. Look at listings, FSBO's, expired listings, and recent sales.

After seeing enough property, you'll have a good feel for what a property's market value is.  That's where you start.

Next, during this inspection period, speak with as many realtors, contractors, title people, lenders and (gulp) actual sellers.  Ask the right questions and develop good relationships.

I've found that over time when you are constantly moving and shaking the trees, deals will start to fall out.  

And by then, you'll be able to identify an opportunity, not just stumble over it because you previously were unaware that it was a great deal.

Best of luck!