All Forum Posts by: Natalie Schanne

@Derek Smith - make sure your next lease includes the following clauses 1) that the one months rent (or more) of security deposit is a holding fee that becomes a refundable security deposit only after they move in at the start of the lease. (So if they never move in, it’s yours). 2) that you charge 1-2 months re-marketing fee to break the lease at any time plus rent is owed until the property is re-rented. (Some people do two months flat and no additional rent due if lease is broken).

I have noticed that most tenants will sign very landlord friendly leases especially if you send them in Docusign and it’s easy to click through initialing every page.

My friend had a real estate client who had just bought a fixer upper condo with plans to rent it. Listed it on mls. Another agent’s client applied and was accepted for a lease starting ASAP. The tenant then decided she didn’t like the property unless the owner was going to do some additional work to it like fully repainting it even though it was rented in as is condition. The owner decided to let the tenant walk away and refunded all of their money even though they didn’t have to and were advised against it. Neither agent got paid. The listing agent rented it through another agent several months later. Not repainting the condo and/or accepting the picky tenant cost the owner at least $3200 in missed rents through vacancy

@Jason Malabute - most people I meet who aren’t doing deals are too conservative with their underwriting. Or not trying to find any wholesale or soliciting off market deals (either driving for dollars, posting on Facebook pages, calling places for rent and seeing if they want to sell as is). Mainly, if you put in like 8% vacancy and 10% PM and 10% maintenance / capex and $$$ rehab, and very conservative rent, you can make any deal look bad. Is it really a bad deal or are you making it look like a bad deal? I blew my rent estimates out of the water because the rental market is so hot where I am right now.

@Amanda Schneider - Option A) You said you don’t want to cancel. Buy it anyway with the damage.

Option B) Option A plus see if you can get their insurance payout assigned to you.

Option C) Demand they fix it, have them cancel on you and try to guilt them into paying your inspection or appraisal expenses.

Option D) Eat the inspections cost, walk away, send “I want to buy your house without commissions” direct mail or drive for dollars or hook up with a wholesaler, find a better house for less that hasn’t flooded.

I like Option D when I have a stubborn seller. Maybe you can be more crateative and not pay $100k over asking. The market is cooling off.

@Ryan Copeland - I’m not affiliated with STS so it’s not self promotion for me to say in response to your question —-

check out Avery Carl - @Luke Carl - The Short Term Shop - BiggerPockets Podcast Episode 364

The Short Term Shop (STS) also has a great Youtube Channel and Facebook Group focusing on buying and operating Airbnb / VRBO in Smoky Mountains (like Pigeon Forge Tennessee / Seiverville) and Destin Florida areas.

One of my main takeaways following reading their guidance is that it’s OK to charge a premium price and take fewer customers. Like to be 50% occupied at $500/night than 100% occupied at $200/night. They also cultivate hundreds of amazing reviews so they appear to be one of the best houses available in their market (assuming you’d rather see 200+ 5 stars vs 5 5 stars on a listing).

@Barney Davis - Good news! Real estate market is so hot you can probably get $1500/mo for your unit today. I’ve been astounded by the demand for my rentals. Literally hundreds of calls.

I also have not had any success with discounted rate tenants staying the full term they promised, so I have a clause that accelerates the stated and accrued discount to immediately due upon termination, in addition to a 1-2 month termination/remarketing fee. (If you’re paying a PM or real estate agent a commission to place a tenant, they usually charge 1/2-1 months rent). Even if I do it myself, my time is still valuable.

I usually offer that they will continue living there and paying rent and I will, with their permission, post it as available for rent. They will bring people through themselves to show the rental (so I don’t have to go there every time), and after someone applies and is suitable, I will release them from the remainder of their lease obligation after the new person is in and paying rent.

I do not agree with month to month rentals only as a strategy. Turnover is our biggest expense / revenue loss in terms of vacancy and repairs. My rental market has strong and weak seasons. If I want to get top dollar for my rental, the lease should start sometime May-August. Anyone not rented by like September is usually cutting rental rate significantly. November-January is the worst in terms of rental rates because nobody wants to move in New Jersey.

@Sonia Chopra - BiggerPockets (Real Estate) podcast 210 - on Apple podcasts app etc and also probably YouTube

@Kat P. - Yes, please call the police directly next time so you are not potentially physically harmed because of this. I would also send the tenant a noise violation or other lease clause with a x day notice to cure or quit. For me, this would be a function of restricting your quiet enjoyment of the premises, though I’m sure you can find one or more other things the tenant has violated. I have a clause in my leases now that has nuisance charges / fees for disturbances. Almost every problem I’ve had with a tenant has been caused in the first few weeks of their occupancy (overdose, stealing from others, inviting over guests who assaulted other members of the complex). All leading to police and/or ambulances at my property. I always post the notice to get them out immediately and/or offer termination of lease and make them go ASAP and the drama goes away. Also, set up a ring doorbell camera at your front entrance. You can turn off the ongoing noisy alerts to your phone and it will auto record activity for your future review (as needed).

@Jose Centeno - most company’s default buyer agency agreements say you will owe x% if the seller isn’t paying it. I’ve been working to help people find homes off market and I’m glad this clause exists to help me clarify that the buyer will pay me if my direct mail / calling / door knocking efforts result in a seller who isn’t willing to pay me out of the negotiated price.

That being said, in almost every market right now, there are 20+ buyers for every available property and I have a lot of potential buyer clients I can’t currently service because they can’t find anything they like that they can get under contract for at a price they’re willing to pay.

Additionally, my default is to set up the auto alert based on buyer criteria and have them send me addresses of properties they've reviewed the pictures of and like. On the MLS platform or Zillow. I try to send specific listings for their attention but buyers usually end up buying something different than what they said they wanted. (I only want an ugly duplex to house hack so I can get sweat equity and then they buy a freshly flipped SFH). So in general, my time spent there is wasted. They're browsing Zillow anyway if they WANT to buy a house. I'd rather spend my time on the flip side - helping determine a fair offer price based on comps, recommending contractors and a scope of work to fix it up, helping them plan an advertising and tenant screening strategy if they're renting it. Every agent has different skills. Some of those skills are mega confidence like I'm worth x so if you don't want to pay that (or to plus me up if the seller is paying less), I don't have time to work for you. For instance, my broker doesn't charge misc fees like $500 to the seller or buyer for transaction management services, but apparently many customers agree pay them.

Admittedly, all in all, if you have a great agent, that person is going to save you way more than their fees. I helped a guy recently negotiate $10,000 off a $180k foreclosure after under contract because of undiscovered items and I’m sure without my guidance he would have accepted it as is as per the contract.

@Michael Johnson - Oops. I'm really sorry they've taken advantage of you. I would try to appeal to his sensibilities like I've leased this unit to a single mom who needs to move in with her 2 kids. (Though he probably doesn't care). In PA, I was under contract to buy a house and the occupant was the former owner (had been bank owned for 9+ months) and ejectment (no lease) is much harder than eviction (with lease, not paying / breaking terms). I ended up dropping my contract to buy the 4/2 SFH for $132k in March 2018 (after being under contract since October 2017) and they resold it on auction com for $150k in May and the guy got her out by August 2018 and flipped it for like 255k by January 2019. I called and asked him in June 2018 how he got her out and he said I haven't.

@Rick Harmon - like they said, ask the buyers to clarify if they are trying to get some financing. If so, consider allowing the appraisal inspection with an addendum that also says earnest money is non refundable and will be forfeited if they do not close on X day (existing closing date). Then, proceed with the higher priced financing offer (or go back to active) asking for an appraisal waiver of $x so the minimum total is at least $25,000 over the previous cash offer. The purchase interest rates are much lower than cash out refi interest rates and over time that can save the buyer a lot of money and not cost you anything.

I use a technique of giving the appraiser a sheet with $$$ values of recent work done to the property and they bump up my value so it’s good enough for the contract. I’ve never had an appraisal come in low except my first sale ever and I told the buyer day 2 that we were going to come in at x price. It was listed for like 230k and we offered 215k (buyer’s suggestion so I wrote it up) and they accepted it. then I ran comps and the highest that model had ever sold for was $195k. So I said, hey buyer, this townhouse is only worth $195k and the listing agent said ok we will sell it for $210k, and the appraisal came in at $195k. The buyer had offered the $215k and I had just written it up. (This was in 2016, previous to all these current market shenanigans).

Anyway. Good luck with your sale. If you don’t want to let them back in, that seems to be your right. I once wrote a cash offer for a client planning to use a hard money lender as backup and then they sent 3-4 requests from different real estate agents for “BPO” type appraisal “inspections” without my knowledge and I was disappointed with the hard money company (dohardmoney) based on what I had discussed with the listing agent.