All Forum Posts by: Edward Briley

I have a rental property in which my tenant stiffed me for more than $8,000 for stealing, damaging property and late rental payments.  My rental agent filed against the tenant and I received little more than a $4,000 judgement against the tenant, which I doubt I will ever see a penny of those losses. 

To add insult to injury, my rental agent told me that those kind of judgments are no longer included on credit reports.   I was told that just started in the last 3 to 4 months.  Matter of fact, the only thing they can do at present is to check into court reports to get that kind of information.  

I have some questions?  

Why could I not file charges against the tenant for stealing appliances?  I contacted the police about this matter, and was told it was a civil matter, and that law enforcement would not take a police report for theft?  The appliances were less than 10 years old, and the judge refused to include them in the judgement because of their age.   I did not get a judgement for the custom drapes either, that cost well over 2 thousand dollars.

Is the rental agent responsible for the tenant taking the appliances and draperies?  Someone told me that because I turned it the property over to a rental agent, that the rental agent was responsible for the property inside the home.

Has anyone heard that credit agencies no longer report late rental payments on housing or even judgments when it pertains to real estate leasing or rentals?  

It is hard enough at present to collect rents from tenants, how am I protected now from tenants not paying their rent or past rents from other landlords, when it does not effect the tenants credit score.  My agent does extensive background checks on every application, however, now it will be nearly impossible to check to see if they have been a good tenant in the past, paying their rent on time, or paying it at all. 

I know of a small town that is in need of having many of the buildings in the downtown area flipped.  The town sits on a river, however, most of the buildings are not in a flood zone.  Some of the attached buildings have been flipped, however, many more need to be renovated.  The town was built in the early 1900's and was a boom town through the 1990's.

It is not that the town is lacking small businesses that want or able to lease these spaces, it is that it is a small town, and the businesses cannot spend thousands of dollars on rent, or renovations.  Most of these buildings have no less than 3,000 sqft retail space, and many have basements for storage.  It would be very simple to split the retail areas up into 1,000 sqft areas that could easily be leased.  Also, many of these buildings already have living spaces above, but they need to be renovated as well, are not rented, and neither can they be until they are renovated. 

There are two investors that have came from out of town and have bought a few of these buildings, however, they are looking for grants to flip them, which I doubt will happen.  The only other way they will be renovated is that a company to go to the small town that needs a business place.  The investors got possession of the buildings by just paying the taxes owed against them.  This was a big disappointment to the town. 

The people that own this real-estate think they are sitting on a gold mine because they are waterfront property - and they may be, but seeing how these buildings have sit for over 10 years empty, I doubt it.  They have fallen into disrepair, and the town has condemned many of them, and may be able to take possession of them, but it will cost the town more than what the buildings are worth just for the upkeep, tear them down, and in some cases they are connected to a renovated space.  Many of these buildings have been gutted with all asbestos removed because of a grant some years ago. 

Don't think that this town is dying, because it has a well traveled highway that passes through it.   Matter of fact, it has most of the fast-food restaurant chains, shopping centers, etc... It also has 6 motels, and there is a lot of money around the town.  (Franchise owners, Vacation homes, waterfront homes and somewhat massive farm homes).   And it is safe to say that many people that live in the town have more than a comfortable living, because most of the better neighborhood homes are owned outright on 1/2 acre or 1 acre lots.  The town sits between a major city, and a major east coast summer vacation area. (60 miles each way).  I can safely say, that no more than 20% of the homes in the town are in disrepair. 

My synopsis of the town is that 20% of the population live comfortably, and the other 80% are poor, or live from paycheck to paycheck.  The local banks have shut down, and only the larger banks have locations here now, and not interested in lending to people to buy or flip these buildings. 

The town leaders will tell you that the young people leave here.  However, being at someones home on Halloween which had no less than 135 kids to come to the door, last time I checked, old people do not have children. I don't think that is true.  I think the town uses that is an excuse. 

The town has cable, high speed Internet etc...  

The bottom line is that either one of the buildings can be bought for less than $50 thousand.  The cost to renovate them will cost less than 100 thousand to flip and convert them into 3 to 6, 1000 sqft retail areas or apartments.  Each space can be rented or leased for no less than $500 per month. I think the retail spaces will bring in no less than $750 per month after they are renovated seeing how the shopping centers are getting 1500 and up for comparable spaces. 

If you are going to invest, is it worth in doing it in a town like this?  Is it worth it?  I have the feeling if it was, this would not be a problem, but it makes me think? 

Does anyone know if there is any place in the US you can buy real estate that has zero property taxes on unimproved land?

For many of you that apparently do not know where to start looking for below 30K properties, this is the first place I look.  

The way I search it is that I do not put any search criteria in the box, I just click on submit, and then go to "Lowest Price Button"  on the menu bar, even though I try to stay local.  You just might find a home in a good place you would like to visit or even take a vacation at. 

Go Here: http://listings.vrmco.com/

And Good Luck!!

Let me explain that the best thing you can do is when you look at a sub 30 home, is the location.  Forget about the house on it and what kind of work that needs to be completed.  The value is in the location of the property.  What I did is to first look at the location, and next worry about the cost to do the flip.  It is difficult to buy land for less than 30 in most parts of the country, even if it is vacant land.  Again the value is actually in the location, not the building.   These are things you have to look at before deciding to make a purchase.  If you own the property outright, it is easy to get a loan to do the flip.  Just don't go overboard on the flip, but make sure it looks nice and done correctly.  

I am sure many of you know this, but to buy a piece of rural land will cost you at least 30 thousand to prepare it for a home.  In many places, just the well and septic will cost that. 

What I am writing below is for someone that has excellent credit with zero chance of losing the property short of a large scale economy collapse.  I am not someone that condones, or ever believes that someone should buy a property with a rent to own contract, unless they have the credit and financial ability to buy the property when they sign the agreement.  (I am not saying this is wrong in all situations, however, paying higher than normal rent payments for your down payment may show you do not truly appreciate the want of buying or owning a property).  I highly advise anyone that purchases a property with a rent to own contract to be advised by an attorney before doing so. 

What I did is negotiate with the owner to lease the property for three years.   I am responsible for all renovations of the property, including taxes and insurance.  The price of the property in which I pay for the property is negotiated, and I must purchase the property in cash prior to 36 months of signing the lease.  There are also agreements in the lease in equal favor of both parties, I cannot disclose for my own protections. 

Providing I meet all requirements in the lease, nothing is reported to any credit agency that I am responsible for the payments of this lease.   (In which the way the contract is written I am not). 

This lease agreement is only between myself and the seller of the property, with my attorney looking over the contract.  I would never do this kind of buy without consulting an attorney and having the attorney advising me if this is a safe way to purchase any property. 

In saying the above, the lease has yet to be signed by myself or the owner of property, however, I do have an agreement with them. 

 No, I decided to go another route.  It is not the way I would have preferred, but hopefully it will work. 

 Yes, I agree with you, the closing attorney should know how to handle this, seeing how he will be acting is the title company in this  transaction. 

 For you all that think a bank will repossess something for not repaying a credit card bill are incorrect, unless it was proven to be intentional.  If you have a credit card, and cannot afford to pay your bills you declare bankruptcy.  The bankruptcy courts decides what you sell and what you pay to repay your debtors.  A credit card company sure does not want a used car, and neither do they want to deal with auctioning it off.  A credit card debt differs from a car loan.  

I have used 2 credit cards to buy a car in the past, and have made some very large payments to contractors using a credit card.  Neither of them required me to cut a cash advance check to do so?  

Let me try this.  I have customers come into my business and pay by credit card.   I take that card. put the bank payment into my bank account, and pay my bills from that money.   Sometimes I even use a credit cards to pay my distributors. 

Why could I not pay the real estate agent that is selling the property by credit card?  It is easier for them to pay the money to the seller than myself to do so? The same process is happening when you buy anything else with a credit card. Is it not?  You are buying someone else's property no matter how you look at it, and in most cases paying a middleman to purchase it. 

I am someone that has never declared bankruptcy, and never plan to do so.   I have paid my bills, and believe me have made some banks very happy while doing so.  

I have a very large opportunity coming up in the very near future, that will be financed by an owner. I just don't know the exact time, but I need to be ready when it does happen.  For this I will put up a property or two to get the money I will need.  For this reason is why I don't want to use my equity in real estate to do so.   By playing with credit cards to buy the aforementioned property will not disturb this larger deal, and will generate income to pay for it, no matter how you look at it.  Hopefully by the time the larger deal comes about, I will be able to use the equality from the property that I want to buy with a credit card. 

 There is even a blog post right here on BiggerPockets about doing so.  Just not much information about how to do it.  I personally know a real estate broker that has done such.  The situation is only that the company that takes the credit card is able to do so.    Chargeback is not really an issue, due to the seller being able to sue you for doing such if he provides a clear deed, that it states in the contract.   For someone like myself, an unsecured line of credit is not that easy for this amount of money.  Of course, if I put up a property to secure the loan, lenders will jump all over it. I have turned down many of these.   I also realize that I may have to pay up to 5% to put it on a credit card, however, that is well worth the trade-off. 

I think many of you are missing the point of me doing this.