All Forum Posts by: Ross Y.

Hi @Anne Caldwell

Have her sign a real ease from the deposit/lease.

If he is financially qualified, I’d simply write an addendum to the lease stating that it will convert to month to month with an uptick in rent (market value if it’s risen), and solely to him.

Rental markets are hot right now and you’re in a strong position to add cash flow here.

If he balks and he’s qualified, maybe offer a 6 month that auto converts to month to month with the same raise in rent.

Addendum can be written by you fairly easily here.

@Nathan Gesner

Nathan,

I dont feel I"m being raked over the coals... i didnt get the damn keys and those things mentioned in your post were all requested... rent.. deposit... lease (there wasn't a lease), etc. I am frustrated they didnt follow the contract. However there is only 10 days or so left and I'm trying to mitigate risk and not start a legal battle if all will just be well at the 30 day mark.

My question pertains to the back tenant and the deposit i already have on hand from the sellers and if i can use it to pay the back tenant deposit back.... they haven't responded yet but i asked the renter if they used their deposit for last months rent from previous owner... Trying to take path of least resistance and secure the property on the 30th. Thoughts?

Hi Everyone,

@Dan H., @Randy E., @Nathan Gesner, @David Avetisyan, @Bryan O., @Thomas S. @Bob B., @Jan H.

Thank you for the advice, it was VERY helpful in my decision and I'm maturing as a landlord because of it. @Dan H., I noticed you invest in Escondido and this property is in Old Escondido, I love this town and I'd like to treat you to coffee one of these days... I'm working on Mills act approval now!  I'll PM you if you're open to it.

I've owned property for quite a few years and I've never experienced a tenant that wanted to be almost as difficult as the law will let them. Especially since this previous owner made over 200K off of me with the purchase price.... ungrateful punks! 

I decided to hold on to the full deposit, get PODS delivered at my house, and go stay with my brother for a week or so until i can get in there after the 30th and assess what i need to use the deposit on; well within the law of course. If they do not return keys, I'll change the locks. They had 3 dogs, so I will clean the property, then get them the hell out of my life and continue on my RE journey! 5 properties in 3 years so far with quite a bit of equity!! Cash flowing enough to almost pay for this entire mortgage, not too shabby. Looking for Multi's now :) Thanks again team!

ONE MORE PIECE OF ADVICE NEEDED :)

I had the back tenant fill out an estoppel agreement that stated she paid an 800 deposit to the previous owners. My home closed on the 3rd of march and the previous owners collected full rent of 825 on the first from the tenant; previous owners did not give me a cent of pro-rated rent. I was going to chalk it up to "whatever" because i'm tired of dealing w/ crap and this is almost over... but now i see the deposit could potentially be owed by me since i bought the tenant. basically.. there is not a lease agreement. I was thinking of  using the $3000 deposit collected by escrow at closing to fund that if necessary and use the deposit as kind of a cash for keys strategy.. saying i'll pay your deposit back the day after I inspect and it's all clean, etc.   What are your guys thoughts??

Thanks @David Sussman I was traveling on business when everything actually funded and closed. It was understood that they were going to give us keys at closing but they have gone dark on us... I was thinking of just changing the locks and then providing them a key if they ask for it.... we only have 13 days left until they have to be out...

FHA is good due to the low down payment but the up front MI is very expensive.... in addition, you have to add .8 to your rate which is going to be your monthly MI so it will eat into your monthly profits; you cannot drop the MI, you would have to refinance to get rid of it. make sure you properly calculate the payment with all escrows and re-run you numbers... FHA wqould be a good option if you need the additional DP money a conventional loan would require to perform rehab.

Hope that helps... -Ross

Elaborate story here.. quite a nightmare. Please read through and help.

Setting the Table:

Property is in San Diego, California

Just purchased and closed on a nice primary home with a granny flat in the back that is rented. Due to the low offer and seller counter, i agreed to a 1 month leaseback for the sellers because they are moving into a new construction home and it may go over schedule. They stated they probably wouldnt need the full month and I woudl most likely be able to move in early. I required a $3000 deposit and a $250 per day fee if they go over the 30 day leaseback. The renters in the granny submitted a signed notice to vacate by the end of the 30 days as well. In the purchase contract, it stated that i was supposed to receive a copy of the keys to the property at close of escrow...

All seemed well and i felt like i covered my basis.. this is where it goes haywire:

15 days after close of escrow I still have not received the Keys; i've noticed them multiple times that i want to enter the property (24 hour notice) and they do not respond. They did respond one time and when i went there, nobody answered the door; while i was there i noticed the property was 95% empty with some trash laying around and and end table here and there. I reach out to the sellers in a nice manor via text and stated that i noticed the property was empty, i want my keys and i wish to move in early because i have tenants lined up to move into my current home and i dont want to live in a hotel with my kids for a week.

They responded to my real estate agent that they woudl give me the keys the following day and i could move in on a specific date if i released the full deposit now. We responded and stated that upon inspection, if the property was in clean order, i would release half of it the next day; i explained that the back tenant is not communicating with me and will not let me enter the granny flat so I'm concerned i may need the deposit to evict her. 

They responded to that with stating they will not give me the keys now and i cannot move in early; even though there is nothing in the home.

Back Tenant:

I notified the back tenant that was going to come by and take pictures of the property and that i needed to enter the residence. They responded that it does not work for them and i should contact them during normal business hours. I know i can legally just enter if i want to with proper notice but i dont want to ruffle more feathers. I responded with, What time works for you on Monday or Tuesday, and she will not respond.

What to do??

Main Home: My thoughts were that they have breached the contract by not providing the keys or allowing entry to the property with proper notice. My plan is to change the locks and post a letter on the door 24 hours prior stating due to lack of communication, failure to provide the keys, failure to allow entry, and perceived abandonment. I will do it based on the original date they provided in text that the property would be ready; IE, they originally stated that would receive the keys on the 16th and i could move in on the 20th if I agreed to release the deposit.

Granny Flat:

Not sure what to do there... help me out :)

Conclusion:

I guess i could just wait it out and get a hotel until they are out but it would be expensive and a real pain in the rear. I still have the 3000 deposit i will use to change the locks and apply towards a hefty cleaning bill.  I want the thoughts of the community. Please let me know!!

Thanks Everyone, I love this community!!

@Tony Castronovo- THanks for the reply 1. I could hold off 6 months, but i'd like to get it ASAP. I have some private money that has been pledged my way to invest with and i'd like to show some of my own skin in the game with it. 2. HELOC fee's to my understanding are fairly limited.. maybe a few hundred bucks... I haven't specifically looked at them but i have a saved forum from here with a list of credit unions that will offer HELOC's nation wide up to 90% LTV.

@Wayne Brooks- Thanks Wayne. I believe it is 79% within the first two... and QCD because it would eliminate the majority any issues during escrow. 

Looking at those numbers, what would you do in this situation? Looking for a few people's opinion so i can modify or solidify mine.

Team!

I"m in the middle of rehab and I"m questioning myself pretty hard on what to do. Your input would be great. Please review my numbers and provide thoughts.

Property is in A- Neighborhood in San Diego, California originally purchased for rental (would like to keep)

Purchase Price: 224K

DP: 25K

Rehab Cost: 15K

ARV: 250K

Gross Difference: $11K

Mortgage Incl HOA/MI/PITI: $1520

Rental Market supports: $1995

Gross CF: $475

After appraisel going to drop MI, gross CF goes to $555

Everything brand new, not a lot of maintenance

I'm using my own cash here (borrowed 19K against retirement funds, i'm just paying myself back @ 5.5% interest so i'm not too worried about the 325 it's costing me per month). I want to free up the money I've put into it so i can move onto a different investment but i don't want to necessarily give up the property. Please confirm/deny my thinking. Since it's listed as primary, After dropping MI, get a HELOC up to 95% LTV to get out my DP and rehab money. OR quit claim it to my corp, flip it and keep the money in the corp to use on another project? Any other thoughts on how to free up the 35K invested?

Thanks BP

Hi Everyone,

I'm a current investor and have only used conventional financing for my properties but my father is in an interesting situation and I wanted to run my thoughts by the community to get some sound advice. Please let me know your thoughts here.

My father is currently tying up his VA loan limits with a condo he currently rents out, he has 70% LTV on that prop and just got into a contingent contract on a new house (he did this without telling me). The condo is amazing with a killer view of downtown San Diego and will continue to gain equity IMHO, plus he's positive cashflow on the rental. I told him to keep the condo, refi the VA into a conventional, and then purchase his primary with his VA loan; what i'm not sure about is if he does a conv refi, will that prevent him from getting the VA loan for 6 months or so? I couldnt find any time limits on that but just wanted to know. We're trying to keep it in the family but he wants to close on his new place asap.

I look forward to responses. Thanks BP.

ok, thanks guys