All Forum Posts by: Patricia Steiner

@Sarp Ka

This isn't new.  My firm has several lenders who can seamlessly close in 15 days on 'traditional' mortgages at/below market rates and we've been doing so for a couple of years now.  It requires a solid FICO, that you get pre-approved with all current financials held in file beforehand, with the complete contract package submitted upon execution which starts the clock; insurance must be arranged within three days for lender underwriting. 

Since my firm is an investor private client boutique, I do not share resources outside of my client base. Lenders desperately need/want business especially in this interest rate environment (right now, the main source of mortgage loan business in Florida is rehab financing as a result of the hurricane damages) and one way the big players differentiate themselves is by streamlining the process. Those who have figured this out have earned my firm's business; I'm not willing to be held hostage by 'process.'

Best.  

Huh?

Not 'innovative' but definitely 'entertaining.'

It's a no. On many levels. 

What starts out crazy, ends crazier...

Got a whole lot of folks (they're not buyers) hovering over your property on a wing and prayer that they don't have to close.  And, yes, inspection deficiencies can hurt your valuation because once they are disclosed, you are required to disclose those to future buyers.  Buyers should always do an inspection; it's a requirement in my private client firm.  So my question:  do you have a buyer - or someone wasting your time?

Price cheaper with cash sale?  That ship has sailed and it was never at the discount you're suggesting.  My investors acquire with cash as a routine investment strategy to secure properties quickly and eliminate competing buyers using financing. It also negates the need for insurance - although that isn't our MO.  You're not in the position to be a cash buyer...as a former wealth manager, it's simply not a good play for you for many of the reasons stated above and more.  

My recommendation:  Punt.  Use financing but streamline contingencies and shorten contingency periods. Also find a lender who can move fast - we have several that can close in 15 days and less.  

Hope this helps.  Value your money more.

Bottom line: there is no cheap date in Florida.  My recommendation would be to increase your deductible to a level just below painful, have your properties 4-point clean, consider your FICO because providers will, and shop coverage.  And, don't buy properties that have a history of insurance claims and/or flooding...that history is known by the insurance providers and increase the premiums automatically.  There are companies out there who are touting 'inexpensive alternatives' but please spend time checking their BBB complaints and standing with the state - pretty ugly results.

If there is an upside, it is that our year-over-year rent prices continue to rise in almost every market as does appreciation.  

At some point - and I feel it's really late already - the state is going to have to step up in a larger way to entice reinsurance opportunities for providers. We're not an attractive market right now - and we're not alone:  
Oklahoma, Nebraska, Louisiana, Colorado, Kansas - and California is rumored to have providers fleeing altogether.

Fun, huh?

Yes. Absolutely. 

@Marcos Carbi

You're not looking at this situation realistically.  Brace for impact:  YOU DON'T WANT THEM TO STAY.  YOU WANT TO SCARE THEM OFF.  THEY ARE STEALING FROM YOU (remember your remark about him not even getting a fast food/entry level job?  He didn't have to do that...you're carrying him). The longer they stay, the greater your loss AND the greater the risk that you will never recoup YOUR loss.  You're not helping them either...you're allowing them to run a tab that is putting them financial ruin.  There are many ways to attempt to collect your loss:  file a small claims complaint against them; get a judgement so you can garnish future wages/bank accounts - and the judgement will be recorded in the credit bureau.  Assign it to a collection agency on a contingency basis.  Report it to the credit bureau as a loss - and they won't be driving a new car, getting a new phone, renting/buying home until they settle with you.  There is also a solid chance that when you act decisively as a business owner that the 'bank of mom and dad' might just kick-in and settle all.  And, this: you may never recoup this loss...this is why you must manage to the lease.  The first day a tenant is late, you give notice.  Again, you're running a business - not running scared.  Stop the bleed, get a tenant who is able and willing to pay you (some of us would work 10 jobs before not meeting our financial obligations!), and then go after collecting 'their tab.'

Please forgive the directness of my response. I choose not to contribute to your loss.

Best.

Whoa!  You're running a business...you are not a social services provider.  If they cannot afford to live there, they can't afford to stay there.  There are organizations that can provide the family with rental assistance; every municipality has one - and the assistance covers utilities as well.  Next steps:

1.  Send them a Notice to Quit for Unpaid Rent. It will give them a cure period to pay the rent in full. In my state, it's 3 days so check your state law.  Send it by US Mail with proof of delivery required and/or place it in an envelope with their name on it and post it on their door.  Failure to cure will result in eviction.  Again, you're running a business.  

2. Advise them of the rental assistance program and have them apply immediately. It most likely won't help them in this case but let's face it - they're not big on resolving their own problems especially when you're accommodating them.

The longer you allow them to live rent-free with no solution in place, the longer they will do just that. Chances are they are paying others who are not as accommodating as you (amazing how people will make those car payments while jeopardizing their homes) - and it's time for them to move on to housing they can afford and to a tenant that does not require you to subsidize them.  

Bottom line: you're not helping them by allowing them to keep digging the hole deeper AND you're cheating yourself. The #1 reason why landlords fail - according to the American Apartment Owners' Assn - is failure to manage to the lease.  Run your business as a business or risk it.  

Hope this helps...

What you have is noise...the tenant elected to stay in the property during the repairs which you made promptly. You are not responsible for his failure to secure his personal property. Advise him in writing that - email AND via US postal system with proof of delivery required that the lease remains in effect as is and that you, again, recommend that he file a claim with the provider of his renter's insurance for any losses he felt were sustained.  And, that's it.  Nothing more.  If he fails to pay the rent which is not a legal remedy, send him a Notice of Quit for Nonpayment advising that if not immediately cured, eviction proceedings will proceed.  

As soon as you act decisively, demonstrate no fear, do not coward to his threats, and make it clear that you are managing to the lease without concession, he will stop thumbing his chest and making crazy demands.  

Cowboy up.  

I think your starting point is off - way off.  My recommendation would be to engage an investment property focused realtor (not a general residential realtor) and let that person guide you through the process from pre-qualification to market/property valuation and selection.  You will want to interview at least a couple of realtors and determine what resources they have available for you in several arenas (lenders, contractors, more).  It's called building bench strength.  And, know this: what you don't know will hurt you.  Investing in real estate in actually starting, managing, and marketing a company.  It is not passive in any sense of the word.  

Get that bench strength first and then you'll be ready to move forward quickly and seamlessly.

Best...