All Forum Posts by: Mathew Pezon

Thanks Patti! In this case, it looks like the old PM probably did receive Section 8 funds but their bookkeeping was bad and they "lost" track. Funny how this happened as they were losing the business. There were various issues with this particular company prior to settlement and for that reason I am switching PMs. The new PM is on the ball and I hope this will be resolved shortly. Thanks, Mat

Thanks for the reply! The "interesting" part of this situation is that on August 30th I told this management company that I would be using another company as of 30 September when the current tenants move out. We agreed via email to have them manage the property through the end of the lease. But now the rent seems to not have been paid by Section 8, which doesn't seem right.

Hello BP, Here's a question for the Section 8 experts in the community: The management company is claiming they did not receive rent for the last month of the lease (section 8 tenants) and that the tenants probably are using the security deposit to pay for the last month. Does anyone know if there is a way for an owner to verify that Section-8 HUD housing program paid rent directly to a management company? Does anyone know if Section 8 Housing will let tenants use the security deposit to pay the last month's rent? Thank you!

I should clarify that I the ARV is provably 105-110 conservatively and the mortgage (if you shop around) could be 80LTV, so your mortgage would be 88K. I did a 2 unit Reno on Madison St a few years ago that appraised for 115.

Factor in carrying costs, then throw in some contingency, then a just in case fund, and pretty soon you'll convince yourself the bank couldn't give you the property for free! In my opinion if you get this property for $40K you should do that deal all day long. I've been in this property twice. $16K Reno may be low, especially since the old oil boiler is a wildcard and paint and flooring through are a must. You may want to convert to gas for heating the 2nd floor and upgrade the electric to accommodate baseboard heat on the first floor since I'm assuming you'll hold this property long term so you'll want to make heat the tenants responsibility. That being said, 90K ARV for a refi is also low in my opinion. You could probably refi for $100K down there, perhaps more with proper staging. Why are your closing costs $9K? That's a whopping 25% of your offer! With a more realistic 4K closing costs, assuming you're using hard money at 3pts, that leaves 9-4= 5K for carrying costs carrying costs and the refi. The inspector may even let you rent out the first unit when it's done, cutting down on carrying costs.

Thanks Deanna McCormick These are great points. Much appreciated!

Question for investors who also self-manage their properties: How do you handle tenant complaints that revolve around shared spaces? Just tell the tenants to work it out and if they can't to call the police? (I've taken this stance before per BP forums with nuisance noise complaints and it has worked successfully). For example, I have one tenant who is upset about the other forgetting to close the garage door in a shared 2 car garage after leaving for work, while tenant 2 claims they closed it before leaving. I have no pictures. Just tenant 1 vs tenant 2. Seems petty, and tenant 1 makes complaints like this often about noise, front door was open, etc to which other tenants reply "no I didn't do it." Tenant 1 has been in the building for 24 years and tenant 2 for 3 years, neither with issues paying. Any thoughts? Or just have tenant 1 call the cops if he's concerned or has a tenant complaint?

Thanks Wayne. I see what you're saying. The example Fannie Mae gives in their exceptions list is: "The borrower is purchasing a second home and is personally obligated on his or her principal residence mortgage. Additionally, the borrower owns four two-unit investment properties that are financed in the name of a limited liability company (LLC) of which he or she has a 50% ownership. Because the borrower is not personally obligated on the mortgages securing the investment properties, they would not be included in the property count and the result is only two financed properties." It seems like if there's a personal guarantee on the LLCs' mortgages then those properties count toward the 10 maximum in personal name. Thoughts? Thanks

Hi BP! If an investor already has 3 properties in their personal name and, say, 20 single family properties owned in LLCs all with commercial mortgages... is this investor then eligible to purchase a 4th property with a conforming mortgage in their personal name according to Fannie Mae guidelines? Or does the 10 property limit take effect and the investor would be ineligible? Here is the most recent information from Fannie Mae I was able to find. https://www.fanniemae.com/content/guide/selling/b2/2/03.html Thanks!

As a follow up, I did find more info on Fannie Mae's website. Perhaps this answers the question... It seems that even if someone owns 100 single family rentals in LLCs, the person could still qualify for a 4th mortgage in their personal name. Is anyone able to confirm this? Thanks! The following property types are not subject to these limitations, even if the borrower is personally obligated on a mortgage on the property: ****commercial real estate, multifamily property consisting of more than four units, ownership in a timeshare, ownership of a vacant lot (residential or commercial), or ownership of a manufactured home on a leasehold estate not titled as real property (chattel lien on the home). Examples — Counting Financed Properties The borrower is purchasing a second home and is personally obligated on his or her principal residence mortgage. Additionally, the borrower owns four two-unit investment properties that are financed in the name of a limited liability company (LLC) of which he or she has a 50% ownership. Because the borrower is not personally obligated on the mortgages securing the investment properties, they would not be included in the property count and the result is only two financed properties. https://www.fanniemae.com/content/guide/selling/b2/2/03.html