All Forum Posts by: Account Closed

I have a mobile home in a park. I owner financed the trailer. I am listed on the title as the lienholder. The occupants are 2 months behind on payments. I have sent them certified and first class letter warning them they are behind. I have two questions:

1) Since a mobile home is personal property in Missouri rather than real property, will I have to go through a formal foreclosure? I am thinking it would be more like repossession of a vehicle but complicated by the fact that it is occupied. Do I technically have to evict first even thought I technically don't have a rental agreement but rather a note/loan agreement.

2) If would to try to regain the title by telling the occupants that if they sign over the trailer to me that I would not take them to court over the missed payments. (similar to a cash for keys) If I were able to convince them of this, would they just sign on the sellers spot on the title? (I have the title and am listed as the lienholder)

Is there a better way to handle this situation?

Thanks in advance for the advice!

Sandy

In most jurisdictions in the U.S.A. if a person is unlawfully in a residence, mobile home or otherwise, you have to evict if you don't approve of them being there. In court you would argue they have violated the terms of agreement and are causing you damage and the remedy is for them to vacate the property. The court will probably order them to bring the amount current in 48 hours (or whatever time frame) with a stipulation that they must vacate if they don't.

The current state of eviction moratoriums are capricious and random by state, so no telling the judge's stance on that part and what will be ordered.

Ownership and foreclosure/repossession is a separate matter. That needs to be answered by a local attorney.

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Originally posted by @Gerald Pitts:

I try to focus on the Higher dollar / per hour tasks. Every hour I spend on the minutia of cleaning / repairing, I could be learning about how to raise money or partner with someone on another property. I even enjoy housepainting, but now if I even do that to save a few bucks, I kind of feel like I'm stepping over dollars to grab dimes. And i can leverage the expertise of others that have cleaned / repaired for 20 years, and then not be tempted to do it myself.

Software will be your best friend in Self Management. Your Porter / or IGMS for PMS. Pricing tool like Pricelabs. Hostfully for Guidebook / house manual.

What occupancy percentage do you plan for? Is 60% occupancy through the year realistic?

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Originally posted by @Chris Martin:

In short, I don't think so. If you don't agree, please provide some insight and fill me in on what I am missing.

There are two big clues that a foreclosure wave is not imminent. The first clue is in the first quarter 2021 10-Q filing from Fannie Mae, FNMA, one of the largest loan providers with $4.1 Trillion in assets. On page 16. under Single-Family Benefit (Provision) for Credit Losses, FNMA states:

The primary factors that contributed to our single-family benefit for credit losses in the first quarter of 2021 were:
Benefit from actual and expected home price growth (details on page 6)
Benefit from the redesignation of certain reperforming single-family loans from HFI to HFS (details in Note 4, page 89)
Benefit from changes in assumptions regarding COVID-19 forbearance and change in actual and expected loan delinquencies

The net effect was that their single-family allowance for loan losses, page 89, dropped in 2021Q1. Page 83 shows total single family delinquencies of $117 Billion on $3,354 Billion of loans, or 3.49%. Page 84 shows that 9.5% of their loans are collateralized with a LTV of 80% or more. A smaller total loan loss reserve does not indicate that a substantial wave of foreclosures is imminent. After this event-based recession, a majority of those in default hold better cards than after the Great Recession. Any time a loan is reperforming, that's a good sign for FNMA, borrowers, and the overall industry.

The second clue is summarized by the following graph, showing the post Great Recession trend in Foreclosure and Substitute Trustee filings. If you didn't know there was a pandemic, you probably couldn't identify where the foreclosure moratorium started and ended. I contend that Wake county data is a good enough proxy for a big enough chunk of the US hosing market. Yes, there will be local and regional deviations, but overall I see no sign of a substantial reversal of the long term trend. I would expect second half 2021 (2H2021) numbers to rise, but no where near the levels we saw a decade ago.

I don't think a wave of foreclosures is coming. The government will step in with some form of mandate, like they have with mortgage moratoriums and eviction moratoriums. But, it's like a balloon being squeezed, the squeeze pushes the balloon out in unpredictable and seemingly random ways.

I predict stagflation like in the 1970's. Very uncomforatable for people in a lot of ways. A lot of people will lose their jobs, (again) and not be able to pay rent & mortgages (again) and a lot of landlords will say "enough is enough" and walk away from a losing battle, leaving the properties vacant or to the bank if there is a mortgage, depressing values.

The banks won't be able to sell their REOs and will be paid by the government to provide low income housing because there will be so many unemployed and unhoused. It will change smart investing (the kind you and I do) entirely, and investors will have to adapt or perish. The big question will be "adapt in which way?". That is to be determined in the next couple of years.

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Originally posted by @Daniel Kahler:

Currently live in San Diego county, bought a house with my VA home loan. My wife and I will be moving next year out of country for 3 years. Our initial plan was to rent the property but now I am not sure that's the best choice.

My question is, with the housing market being the way it is, should we sell, and make a 25-30% profit, or hold and rent?

I would sell since we are at the height of the market, having tenants is a hassle, if the tenants trash the house it's worse still, you can take advantage of the capital gains tax law, it frees up your VA eligibility, you don't know for sure what the future holds for you.

1 Vote

Originally posted by @Juan David Maldonado:

I want to increase the value of a property by 60k (currently at 65k) so I can use it for a HELOC. What areas of the house after remolding will bring more value after the appraiser does their inspection?

The appraiser is obligated to use 3 recently sold properties that are similar to yours for comps. If 3 similar sold for $67k (I have no clue about the market you are in so I don't know what comps he will use) then the most he will go if you make everything super snazzy will be about $70k. It has no bearing on how much you overbuild. You can't add value to just any house. The comps have to support the number.

You can go to Redfin.com and find three properties that have sold in the last 6 months that are within a mile, that are like your property (single floor or two story, approximate sq footage, approximate same lot size, built approximately same timeframe, add the sales prices together and divide by 3. That gives you an approiximate amount the appriaser will come in at. If all of your comps are $80,000 to $90,000 you won't get an appraisal anywhere near $125,000 so don't expect to hit your number. However, If you find 3 comps that are $140,000 - $150,000 then it's a slam dunk. Fix what needs to be fixed and proceed.

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Originally posted by @Turgut Oz:

As far as I know, South Carolina does have outrageously high property tax for out-of-state investors. Are there any other states to be aware of?

Are you sure? First I've heard of it. I would think that would be unconstitutional.

"Overview of South Carolina Taxes

South Carolina has some of the lowest property tax rates of any state in the country. The average effective property tax rate in South Carolina is just 0.55%, well below the national average of 1.07%."

You might mean this: "There are actually two different assessment ratios at which real estate can be taxed: a 4% primary residence rate and a 6% secondary residence or investment property rate."

It just means non-owner occupied properties pay the higher rate wherever the owner may actually live. You could live down the street or in California and you'd have the higher rate. They give a lower rate to people who occupy the home they own.

2 Votes

Originally posted by @Sawyer Martin:

Hello… a little about me so you can understand where i’m coming from.

I invest in Lancaster PA area.

I am 20 years old I bought my first single family rental 1 1/2 years ago. and i am settling on 3 townhouses at the end of this month. I was able to afford the town houses(400k) by paying off my first single family, and refinancing, with my job as a plumber making 60-70k. I am self managing and planning on doing that on all my rentals considering i am competent in construction and the business side.

I would like to BRRR my next property(and live in it) in the next year or 2, and continuing to BRRRR to build a portfolio. and i would like to find properties that need a good amount of rehab, doing what I can myself considering my job is flexible and again I am competent in construction.

I have been considering getting my real estate licenses online, but don't know if it would even be worth it for me to do that? would i be able to be the agent on my own deals? what kind of deals would i find on the MLS? or is it just better to find deals on the market? I am mostly looking for a better way to find deals in the future and i thought maybe getting my license now while i am not as busy might help me down the road.

Bear with me i am very much a beginner and i am open too any information you might have that could potentially help me, i would greatly appreciate that.

Thank you in advance! If there is anything i could do to benefit you let me know, i am very passionate about real estate and want to learn it all!

Looks like you're makin' the grade, man. I wouldn't change anything except join a REIA ($20 a month type group) where you can learn more and meet people. Don't pay big bucks for a guru, you don't need one. I've been at this for a long time. I am not a real estate agent. I always represent myself on my side of the sale. The only thing you would have access to is the local MLS. However, Redfin.com may be active in your area and if so, they cover most of the listings anyway.

1 Vote

Originally posted by @Warren A.:

Our 3rd party Inspector recommended in May to update fuses to modern breakers and address aluminum wiring,

The electrician who reviewed the punch list, did not seem concerned,

Regretfully, I have already closed on this home back in mid May 2021 without coming to a full alignment with the seller.

My google searches and a post to a different sub forum strongly suggest change to breaker and aluminum wiring for the property in question (built 1940). Looking at our portfolio of rentals I just noticed today we have another property (built 1954) with fuses in sub panel also in a closet (our other LR rentals are modern breaker). A different electrician for this noted,

So my question to Little Rock BP community . It would seem most of the internet and broader BP community strongly suggest to change fuses to breakers and update aluminum wiring but in Little Rock, fuses are still legal and Aluminum wiring is legal? In your homes or rentals, do you have subpanel in closet with fuses and aluminum wiring similar to as shown above? And if yes... Given the risks, how have you handled this ? Thank you in advance!

It isn't so much whether they are legal but are your tenants and your property safe. I had all aluminum replaced with copper wire and a new service 200 AMP panel put in, in a 1630 sq ft property. The old panel was too small for the amount of power needed to run today's devices. I'm told that over time aluminum connections can become a bit loose and therein is the rub. That is what leads to fires. When making connections using aluminum, there is a special grease that is used to reduce the proplem. Over time that grease loses it usefulness.

There are a lot of new rules in the 2017 code. I don't know if Little Rock requires the 2017 code but it sure made sense to me to upgrade.

1 Vote

Little Rock, Arkansas

Originally posted by @Ryan Moyer:

Originally posted by @Account Closed:

Originally posted by @Jay Hinrichs:

Originally posted by @Don Konipol:

@Anand S.

Evidence of market “top”. Dumb money with nowhere else to invest. Too much money chasing too few goods.

Buy high, Sell low?

Don I had a conversation with a Hedge fund acquisition manager this week. I ran into them when I sold them one of my left overs.

In this particular market and what they are targeting is clearly low C which really means D class rentals its a market I started lending in 20 years ago.. I have never seen anyone other than locals who self manage be successful growing any kind of portfolio Myself included.. I asked him what are you guys doing just because you can buy a 20k house put 15k into it and rent it for 800 ya looks great on paper but do you understand the tenant base the crime the assets themselves given the age and abuse over the years they take.. I mean I want to sell you the last of my homes so I don't want to talk you out of it.. But really what is the long term play here. No one has been able to do it yet.

ANSWER:

WE rehab them better than most so tenants want to live in our houses and stay for years.. I said OK so does just about every other landlord Granite and stainless is standard these days in many of these rentals.. And they thought they could get market rent and not rely on HUD which in these areas NO LOCAL will do unless absolutely necessary. I am just wondering if I am missing something or its as you state too much money chasing too few deals and well that guy did not know what they were doing we are better so we can train this tenant base to pay on time every time without government payments.

We did not dig any deeper but the reality is in these zip codes unless the locals own the home ( and of course many do or their mom does). The average tenant will move 30 plus times in their lifetime in those same streets and blocks .. Not sure many understand this. And turnover kills rentals especially in areas were petty crime really hurts landlords.

OR I am missing something.. these guys re paying what i was lending on these assets 20 years ago.. numbers are basically all the same over all these years.

They are not looking for appreciation or cashflow. They are looking for tax write offs in the depreciation. They are glutted with money from "government stimulus", are aware that printing trillions of dollars with no production in the economy to back it up causes inflation and they need to get their money out of cash into a commodity. There isn't enough gold available to buy so they are sinking it into real estate and waiting. Cerberus Capital did that in Phoenix in 2012 and other places and fared very, very well.

In that case they should just buy $1.5bn worth of bitcoin :P

Lol. Bitcoin is slightly more volatile ;-( and doesn't have a capacity for depreciation on your taxes. $$$ ;-)

0 Votes

All Forum Posts by: Account Closed

Account Closed has started 141 posts and replied 4070 times.

Post: Which Entity to use for Short Term Rentals?

Post: How does a lienholder regain title after occupants default?

Post: STR operating expenses

Post: Is a big wave of foreclosures on the way?

Post: To hold and rent or sell in this market?

Post: What increases value of property

Post: Which states have higher non-resident property taxes?

"Overview of South Carolina Taxes

Post: Should I get my real estate license??

Post: Do you have subpanel in closet with fuses and aluminum wiring?

Post: ReAlpha plans to spend $1.5B to buy short-term rental homes