All Forum Posts by: Max Gradowitz

Yes, that is definitely standard. What down payment would you expect?  Owner-occupied loans have lower down payment programs because they are less risky (you are more likely to pay your home mortgage than one for a rental property, if your finances go bad).  So for rental properties, "non-owner occupied" loans require a larger down payment.  Typically 20% down is the lowest you will find for a non-owner occupied loan from a "big box" lender.  25% is better because the terms will be better.  I have heard 15% down programs are available now but none of my clients get those, I imagine the terms (like interest rate) will be worse and therefore not worth it.

You should have your client contact an attorney for more specific information, because there are a lot of factors to consider.

But in general in California, if the tenant has 1) completely moved out, and 2) has had their lease legally terminated by eviction or vacating upon proper notice... THEN yes you may take the property out of the rental unit.

However, as @Aaron K. correctly mentioned, in CA the landlord must store the property somewhere secure.  The landlord should not sell or dispose of the tenant's property or they risk getting sued by the tenant. The landlord must notify the tenant with notice that describes the abandoned property and tells them where it is being stored and how to get it back.  If they do, you must give it back to them but you can charge them for the storage costs.  If they don't get their stuff, only then may you dispose of the property, in CA anyway.

As you can see, the state laws pertaining to tenant's abandoned property are complex, at least in tenant-friendly CA.  Give your client a referral to a good RE attorney.

You are a Realtor, use your Realtor thinking cap! You know how to figure out what the market price of a property is based on comps, right? Then figure out what the market terms are for owner financing. If you search on your MLS and check the owner financing options, you can oftentimes see what terms are most common for listed and sold properties. In my area, if I check that box, only a few listings pop up, but most of them say in the agent-only portion that the seller "will accept 30% down at 10% interest" or something like that.

Approach the seller with this data.  It only takes 10 minutes for you, and you can tell the seller "Based on my hours of  super extensive research, I've noticed that owner financing in this area tends to be 30% down at 10% interest for 15 year terms.  Would you take 30% at 10% interest, but with a 20 year term?" and go from there.

Also, here is a pro tip from an attorney's standpoint that I've seen from my clients that have done stuff like this.  They tell the seller they already have real estate attorney that will draft and file the loan documents (which in CA is a promissory note and deed of trust) for a small flat fee of X amount.  I know buyers that use this as a negotiation tool for a seller financing purchase because the seller knows they won't have to deal with finding a lawyer themselves, and it's basically a done deal once they sign the necessary loan paperwork.

Generally speaking, this is part of the practice of real estate: make the seller think you have done this a million times already and you have the people and paperwork in place to get everything done inexpensively and easily.  Make them think they don't have to do sh*t except sign over their property to you for a nice profit.

This is a question for your agent, not for BP.

Generally speaking, you have an appraisal contingency (at least the standard Realtor purchase agreements do), but only you and your agent would know if that contingency is in there (not BP - we don't know what contract you used).

And in many (probably most) state's standard purchase agreements, if you don't remove a specific contingency, it is not considered contractually removed even if the time frame is up, however only your agent would know if that's the case in your state and with your purchase agreement (not BP - we don't know which contract you used!).

And if you have not yet removed that appraisal contingency, then your deposit is not at risk and you shouldn't be worried, but guess what... Only you and your agent would know if you've removed that contingency yet (not BP).

Ask your agent.

There is no benefit in of itself.  If the agent is a particularly good business partner, you should partner with them because they are a good business partner, NOT because they are licensed.  You could use them as your agent, but I don't see a benefit to that.  I'd find a particularly investor-friendly agent to use as my actual property-hunting agent.  Chances are your potential partner is not (investor-friendly agents are a dime a dozen unfortunately, although most of them will not admit that).

I have a handful of clients that are partnered with licensed agents as business partners in a 50/50 partnership agreement, but none of them use their business partners as their active agent to represent them in the deal.  The agent should not have a financial interest in the transaction, in my opinion.  You don't want one partner making those decisions, you want an independent professional making those decisions and CONFIRMING it's ok with BOTH partners.

5-6 percent is most common in my area.  It does not matter whether it's a dual agency or not.

In fact, I've been asked by a seller to do a reduced commission amount AFTER contractually agreeing to 6 percent, because the accepted offer was a dual agency where I'd be representing the buyer.  What?  You want me to reduce the amount you've agreed to already give me, just to be nice?   I politely said no, and that I would certainly never ever ask them to reduce their fee if they were my doctor or lawyer.

I think it's important to note something here that non-agents may not understand: if your agent is doing dual agency (representing both buyer and seller) they are doing twice the work they would otherwise do because they have to act as both buyer and seller agent.  Normally they would split it with a buyer's agent brokerage because the buyer's agent has to deal with the headaches of representing the buyer (scheduling inspections, removing contingencies, giving the lender and escrow company everything they need, constantly advising them how to proceed, etc), which warrants half the commission amount.  The seller's agent always has the seller's portion of the work to do (showings, presenting/interpreting offers, communicating with the owner/tenants to make sure inspections/appraisal goes smoothly, making sure the title company has everything to close, etc) which warrants that half of the commission.  If they do both, should they not be paid for both?

Welcome!

Your vacant land is worth considerably more now. Many municipalities are choosing to refrain from zoning vacant land for cannabis cultivation (I guess they don't like money!). What this means is if you have land zoned for this, you suddenly now have land that is much more rare and valuable to cannabis business owners. 

I'd offload it now, right as cannabis biz owners are now applying for licenses for this. You CAN hold onto it and lease it, but you run the risks of federal preemption unless the federal laws change. I'd sell at top dollar right now and let others deal with any potential headaches in the future.  Pick an agent that has experience with this very type of thing. If you can't sell it then consider leasing it, but have a good attorney's business card in your pocket. 

Check smaller local credit unions. They are usually way more willing to do 75-80 LTV on a HELOC, and at better interest rates too.

Hello from SoCal!