All Forum Posts by: Michael Randle

Their original plans probably did not overlap with your property. But while they where digging (example) they found something that is affecting those plans, ie water coming onto your property while the original plans had it going somewhere else. Now they have to amend those original plans and possibly have the project delayed or shut down since it will affect your property. So instead they are trying to nip this in the butt when they submit the plans by saying, "Well now we have to pump our waste water into this property due to X, but we have bought that property so it will not affect anyone."

Lots of questions so lets just dive into them.

"I would like to feel like I knew what I was getting into if I did use private or hard money" - Very High interest rates, usually not as much concern for personal credit score etc (this will vary between lenders) and more looking into property and experience.

"Does failure count as experience" -Absolutely, as long as you learn from the failure and apply that knowledge to future endeavors. If you fail and say 'The gods are so cruel to curse me as such!' then it doesn't count as failure. (Sorry, just read Richest Man in Babylon and that writing style is stuck in my head).

"Does failure destroy your reputation and your credit" - Depends on the level of failure, if you get foreclosed on or have to declare bankruptcy then it is going to ruin your credit. If your failure is selling a house for a slight loss then no. All matters on the magnitude.

"What happens/what does it look like if you can't pay a private or hard money lender" - Well it isn't like the loan sharks of the mafia era so you can expect your kneecaps to remain in tact. But you can expect to lose any collateral and have your personal credit ruined.

"For that matter, what are the lasting personal effects of foreclosure" - Do not quote me on this but I believe it is on your credit report for 7 years and you cannot get a mortgage for at least 2 years.

Hope that helps you a little more. Good Luck!

I would second @Wayne Brooks about him not being able to pump directly onto your property. And I would have to disagree with your neighbor about not having any recourse. 

The idea that his bad engineering and planning would allow him to pump water onto your property is kind of stupid. It would be like you saying, "Well, I do not want to fix the sewer system, so I am just going to pump it onto the back of my property in such a way to guarantees it flows into your high rise area." Now that is the more common sense idea on the situation but we all know how well laws are written so talk to a local attorney. $300 for piece of mind isn't that bad.

I personally would not let the implied threat of him flooding you out affect your decision to sell. If you want to keep the property and you are worried talk to a lawyer and see if you have recourse if he does flood you. If not try to get an injunction to stop construction from a judge, up your flood insurance, there are a few different ways to deal with the situation or the blow back in this case.

To me is sounds like the builder made a error in his engineering plans, and he knows it. Due to that he is attempting to talk to both of you in an effort to avoid legal hassles. I might be cynical when I say this, but do you really think if this problem wasn't going to legally affect him down the road he wouldn't just be moving forward? He messed up, he knows it, and he is attempting to fix it so he doesn't get tied down in courts for (possibly) years on end.

That being said this sounds like a possibly amazing opportunity for you, its like your duplex just appreciated in value considerably faster than the entire city.

Bump, would be interested in hearing what some of the community says also.

@Jim K.,

Eh, no skin off my butt regardless of what you call it. "Left Coast Best Coast" guy here.

@Allison Panila,

What you see here is the difference between "Good LLs" and "Bad LLs". 

As @Russell Brazil stated, the basement unit is illegal to begin with. So therefore anything that comes out of a contract concerning the basement unit isn't enforceable in the court of law. Think for instance you go to your local drug dealer and sign a contract for 3 kilos of Cocaine at $50k a kilo and when it comes time to pick up your product he is selling for $55k. If you then take the dealer to court the judge is going dismiss because you contracted for an illegal service. (This is an extreme case I know but the logic applies).

So your original question of "can a LL change the contract", in this case yes he can. Simple because in a court of law the contract holds no weight due to it being an illegal service to begin with.

So the scorched earth response Jim K said he would do it not only impossible in this situation, but also illegal if he actually succeeded in get an 'eviction' on her record. And with all due respect to Jim K there is really no reason to imply insult the Highway State, assume she is entitled or to basically be a dick behind the keyboard. Allison has come here asking a legit, legal question and you seem to be taking out some personal issues on them.

Now if we can get into theory craft of your question as to if the LL can change the contract, usually that is a no. But then the question come down to the undefined wording of "three times". Generally accepted contract (look at the lease people sign daily with apartments) "three times" means overnight stays. One would also argue the term is too vague to be properly interpreted in a legal sense. Does the pizza delivery guy dropping off dinner count as a visitor? What about the UPS guy who is delivering school books from amazon? If her car pool driver needs to use the bathroom before heading to school does that count? How about someone coming over to pick up a book needed to study? What about 3 students that come over to do a study session, does each person count as a 1 time visitor or the the group as a whole counted as 1 time? What if the BF comes over Friday morning and doesn't leave until Monday Morning, is that just 1 time? You can see where this is going I assume.

Reasonably I would assume (see the word assume and know that it makes an *** out of u and me) that any judge or arbitration would side on the fact that "three times" would refer to three individual times spending the night.

Reality is the contract is poorly written, or perhaps you have not given enough detail since you didn't want to get into the weeds here, and is illegal given the way it is written. 

That said she should just pay the $50 and tell the guy to shove it, not worth the hassle.

Hello Bill!

With the knowledge I have no idea where this Duplex is located, and therefore I am not an expert on this I will say the following.

Pros+ I like how you have 10% for CapEx, Management, Repairs. That is a good rule and has you on the right path.

Cons- I would like to see vacancy at a 10% vs 8% but that doesn't seem like it would affect your numbers too much. I would also take issue with the after repair value but it looks like that 'really' doesn't affect any of your actual monthly numbers since your loan amount is still 80% of your purchase price of 75k.

Wildcards -/+ Can you get a 4.5% interest rate on an investment property? That seems extremely low to me. Also does this market demand a $1k a month lease, per side? Again I do not know exactly where this is but you should double check you are not shooting yourself in the foot with over estimating what you think you are going to get per-month.

Hope that helps a little for you!

@Taylor Hudgins,

Welcome to the community. I am currently in the process of closing out my small investment portfolio in CO and looking to start actively down in your area come January. If you still have the desire and the bug to learn hit me up and we can pick each others brain.

Seth

Bad wording above on my part. I meant to point out how Brunner set the standard to discharge the student loans. Since everyone (or at least most of the people) where stating that student loans cannot be discharged due to Bankruptcy.

Just to be clear, student loans can be discharged in Bankruptcy, it is almost impossible.

@Scott Trench,  Student loans can already be discharged in bankruptcy court, just the standard is higher/harder to achieve.

Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987)

I was debating how to answer the broader questions you bring up in this thread. Cost of education, debt taken on with 'bad' degrees, public interest in education etc.

If I where dictator for life, I would have every STEM degree 100% paid for by the government, or if that is too much Bernie for you 100% qualified for low interest student loans. As a country we need highly educated and trained individuals to remain competitive and to have a robust economy. 

I would then allow the Education Secretary to dictate specific degree programs that qualify for federal student loans. This would allow a re-certification process every 4 years, and every Right-Left swing, to decide the new direction the administration (hence population as a whole) wish to take the education system. Trump might have wanted to concentrate on Business so he appoints someone that would focus on that. Hillary might have gone the direction of a more Liberal arts field. But in 4-8 years a NEW direction would be dictated by the president and they wouldn't have to carry on the policies of the last. Or if a shortage popped up that can be address by dictating that degree or program would qualify for the benefits.  

This would also have a 'free' market aspect to it since at any one time certain degrees would have to be paid for out of pocket, or with higher interest loans, schools would have to keep prices down to compete. MIT, CalTech etc would most likely be expensive since they focus on STEM. But Colorado State and University of Colorado, who vast majority of graduates are not in the STEM field, will need to keep prices down in order to be competitive.