All Forum Posts by: Reed Kelly

Ha! Good response Ronald! In all seriousness Chris, these are good questions and important indicators/info to look into when moving into a new market. Would you mind positing your analysis and answers to each of these questions for each sub-market? Give us a jumping off point and lead the conversation! And in the process of doing the initial research you’ll gain some great market knowledge!

This sounds like an awful, frustrating and unfortunate experience. From your original post and replies above, it sounds like you’re on the right track though: let your attorney flex some muscle with the seller/flipper/contractor, and continue to raise hell with the building department, city complaint line, or even local politicians and news outlets. Good luck!

Many standard leases have blanks to fill in with bank account info (including a blank form I got from BP). When I was a tenant, some of my landlords didn’t require us to fill out these sections of the form (they didn’t need to know our account balance and account numbers!). They were able to run a credit check without this information so everything worked out. That being said, I do understand the scenario where a landlord has an awful tenant and needs to evict or take them to court. Having as much knowledge about the person on the other side of the courtroom would be helpful!

Wow! Tammy and Ryan those are great ideas! Using both together would quickly “train” your tenants to pay on time. I’ll be incorporating these ideas!into my business too!

Using a buyers broker may be valuable because it allows you to tap into their existing relationships and network. If you don’t use a buyers broker, then you’re probably looking more at on-market deals. Many quality multi family properties never make it to the open market (hence the occasional jokes about Loopnet only having bad deals). Good brokers have cultivated relationships with property owners in their market, often long before an owner is ready to sell.

I recall hearing this strategy on the podcast too. I think this strategy may be more common with seller-financed deals (“your price, my terms”, or “my price, your terms”). In addition, when you give the seller several buy options, psychologically they’re more likely to compare your offers and like one more than another, rather than stepping back and evaluating whether or not any of your offers are good. It’s like asking a kid if they want peas or broccoli or carrots, not asking if they want to eat vegetables.

Also, good luck! Let us know what you do!

Hi James,

I was in a similar situation last fall buying a single family to house hack. We bought the house with a fast close (20 days) using conventional financing. The sellers were in financial distress and needed to sell quickly. As part of our offer, we gave them (free) 1 month rent back in the house after closing. They accepted our offer because of this stipulation, even though there was an offer for a higher price. At closing they signed an additional 1pg standard rent back form our real estate agent had. 

The sellers had high equity (they lived here for 25+ years) but low personal cash, and they needed the fast close to get the cash to purchase a home in a lower cost of living area. The used the rent back period to find a house, close on it, and slowly move out. I say slowly, because about 2 weeks into the rent back, they asked us to extend for an additional month. We agreed, but not for free. They signed an additional 1pg standard rent back form from our real estate agent and paid us upfront the cost of 1 month mortgage +10%. At the end of the second month they moved out and we started remodeling. 

A few takeaways for us:

-we were able to rent back because we had an alternate short-term living situation lined up with my in-laws (free rent)

-we had to limit the rent back to 60 days max because of our mortgage terms (required owner occupancy within 60 days)

-we didn't use a long lease or anything. If they had not wanted to move out, I think the eviction process would have been low cost for us because our real estate agent and brokerage were on the line (they provided the forms and it was part of our agreement)

-that being said, I still felt nervous for the 2 months they were there... 

If she doesn’t move out you have three main options: 1. Do nothing: not a great option, particularly if she isn’t paying rent. 2. Forceful removal (evict): I’m hoping you have her on a lease. If so, on April 3rd (or 5th or 10th, or whatever it says in your lease) serve her with an eviction notice for non-payment and breaking lease rules (smoking inside). 3. Peaceful removal: offer her cash-for-keys. Hopefully it doesn’t come to that and she moves out on March 31 and leaves the unit sparkling clean! Post an update next week and let us know how it goes!

Also, for the purpose of general education, would you mind sharing how you got into this situation? Did you do a background/credit check? Would anything even show up if they’re from out of country and don’t have a SSN? With 20/20 perspective, what would you do differently now?