All Forum Posts by: Rick Estacio

Non-legal advice - I think your lawyer is mistaken. this site say cash for keys is legal in all 50 states, consistent with my understanding https://www.thebalance.com/cas...

And this flyer from NJ.gov says cash for keys is fine to offer, but the landlord can't evict the tenant if the offer is not accepted. https://www.nj.gov/dca/divisio...

cash for keys is often the best route and has worked well for me in the past.

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Originally posted by @Paul S.:

Cody what are your thoughts on the southern beaches vs the northern beaches. Seems to be big price differences.

Hi Paul, I've invested in northern beaches but haven't considered southern. When you say big price differences, which are cheaper/more expensive?

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I agree with everyone that inventory is super low, but near the Jersey Shore (Monmouth County) I’m seeing small and midsize (10 unit) multi family linger on the market for 150 plus days and sell well below ask, while single family houses are going into bidding wars within days and going for 20% or more over ask. This makes sense to me as there is diminished demand to be a landlord when Evictions for non-payment of rent have been in place for almost a year and will continue at least until sept 2021. You need really good margins to voluntarily take in that non payment risk (though it’s certainly manageable through thorough tenant screening).

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Check the terms of your lease. It could say that tenant agrees to vacate upon a sale. Otherwise, selling doesn't eliminate the tenants lease. It just means the tenant stays and is now the new buyer's problem.

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Originally posted by @Jared Smith:

So is that the courts just aren't looking into these evictions then? Per the CDC guidelines it states:

https://www.cdc.gov/coronaviru...
Can I still be evicted for reasons other than not paying full rent?
Yes, you may still be evicted for reasons other than not paying full rent or making a full housing
payment. The Order does not prevent you from being evicted for
(1) engaging in criminal activity while on the premises;
(2) threatening the health or safety of other residents;
(3) damaging or posing an immediate and significant risk of damage to property;
(4) violating any applicable building code, health ordinance, or similar regulation relating to
health and safety; or
5
(5) violating any other contractual obligation of a tenant’s lease, other than the timely payment
of rent or similar housing-related payment (including nonpayment or late payment of any
fees, penalties, or interest)

This CDC law only applies if there is not a more strict state or local law preventing evictions. I.e., its a minimum standard. Some states have much more stringent eviction rules that apply instead of the CDC Rules.

Also, yes, courts have much less capacity to hear law suits (including a suit to evict someone) and some have shut down so even if you're legally entitled to evict, it's going to take a long time to actually evict someone. Very tough times for landlords generally and extraordinarily bad for landlords in some locations.

3 Votes

Originally posted by @Mike Adams:

Originally posted by @Rick Estacio:

@Mark Brown - I’d caution everyone to check local laws very closely before trying anything like this. In NJ, it’s up to six months in jail for the first time you do this and 18 months in jail for the second time.

That's NJ, and find me a case where this actually happened where the state prevented them to run their business, effectively seize their business and then puts their family in jeopardy to live.

Here's one:

https://nypost.com/2020/11/17/...

Civil claims brought by the City and the State of NY is currently investigating criminal charges.

"The couple — described by a former employee as “the Brooklyn Heights Bonnie and Clyde” in an article in The Cut outlining their alleged slumlord behavior — are now facing civil penalties for alleged unlawful eviction, tenant harassment and a slew of construction code violations.

“By seeking civil penalties, the city seeks to reverse any windfall that landlords may receive from their bad acts, and to broadcast a message that other landlords think twice before illegally displacing tenants,” the city said in a statement.

The city is also working with the office of New York State Attorney General Letitia James, which is probing the actions of Brooks-Church and Gendville."

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Originally posted by @Jonathan R McLaughlin:

@Rick Estacio oh great now I have to toss my well written answer :) Best possible case for you actually--price reduction and no tenant. You are in a great position to document your costs. When you come up with the costs bill your time too, whatever you are spending on this won't be billable. Maybe pay a good contractor or other professional for a formal breakdown of replacement: cost for materials plus labor, then include your time. After you negotiate what you think is appropriate, you may want to consider financing the repairs with a construction loan. And maybe think about having some of the sale proceeds in escrow against cost? Not sure of NJ but you could do this as a holdback and draw from that account...might not be worth the trouble. Also include the opportunity cost of the vacant rental.

Thanks, Jonathan. Really appreciate the thorough reply and guidance. All great advice. Will let you know how it turns out.

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update: all great advice. Tenants left voluntarily before closing, but they trashed the unit as many predicted so I’m now negotiating an appropriate price reduction for the damage they caused (and major repairs needed identified during the inspections).

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Originally posted by @Kay Martin:

I keep hearing about the rent relief fund. My tenant got rent relief funding, but she did not pay any of it on the rent. The problem is the relief is going to the tenant..not directly to the landlord.

That's terrible and likely considered fraud against the government, which she can be prosecuted for under the False Claims Act, among other laws. Maybe let her know she's committing a criminal offense and can be pursued by the FBI and others.

https://www.justice.gov/civil/....

1 Vote

All Forum Posts by: Rick Estacio

Rick Estacio has started 1 posts and replied 47 times.

Post: Investing in Monmouth County, NJ

Post: FHA Multifamily - Tenant Occupied

Post: Jersey Shore Monthly/Weekly Summer Rental Processes

Post: Inventory and Opportunities in New Jersey

Post: Evicting non paying tenants by selling your house?

Post: Eviction Moratorium Effects

Post: Eviction Moratorium Effects

Post: Price Reduction for Bad Tenant

Post: Price Reduction for Bad Tenant

Post: Eviction Moratorium Effects