All Forum Posts by: Isaac Isaacson

Thanks.

I wrote a letter with an introduction and an offer price. This was maybe 4 weeks ago; I've gotten no response. I did not send it certified, so no telling if the registered owner ever saw it or not.

This is an empty, overgrown lot next door to a duplex I just purchased. I've located the owner's name and address through tax records. I was thinking about writing a letter and making an offer for substantially lower then the city appraisal. Thoughts? Suggestions?

More details: This was a less-then-desireable area which is coming back, but wont be back for another 2-3 years when ($1 billion public works in progress, Whole Foods announced quarter mile away, etc). Also, it doesn't really fit my strategy at the moment, because I would prefer to use the cash to put into the next investment property - rehab & flip or rehab & rent. So I wouldn't really have a firm plan for the empty lot. I am currently living next door in the double I own.

Does anyone have a deposit return letter they can link to or send? I am not seeing one in the resource section.

This will be the first time I am keeping a substantial amount of a tenant's deposit and want to make sure the letter says everything it needs to. Obviously, I will be itemize everything as well.

Also, this is an unsual situation, so any advise/suggestions is appreciated... We both agreed to early termination after the property was substantially damaged by a recent hurricane. They stayed in the house two weeks after that while looking for another place. I finally gave them 2/3 (2 of $3k) of their deposit back just to get them the hell out so I could address the damages and keep them from getting worse (flooded, wooden floors buckled, mold growing underneath, etc). Obviously they are not responsible for any of the weather related damage; however, they had the power shut off and left spilt food all in the fridge/freezer, did not clean any bathrooms or kitchen, broke the built-in stereo system, left nails in every wall, paid nothing for the 14+ days after damage (we agreed to 50% of regular rent), the list goes on.

Tenants were in the house literally a month before this hurricane hit. They have been nothing but problems, threatening me with lawyers daily, calling me names, breaking pet policy (counted 6 dogs at one time), "injuring" themselves and filing under my liability policy, etc... all reasons I decided to evoke termination... Rant done. Thanks.

Oh yeah, is it normal practice / ethical to ask someone for a BPO if you have no intention of utilizing their service?

Great. Thanks for all the advice.

-Seek a BPO
-Contact renters directly (might be hard since I don't have their names or phone number)
-Avoid paying full commission
-Consider a 1031 exchange

My previous postings were from my cell phone, so I think maybe I wasn't conveying my thoughts well to save on tiny-button presses. So I will add a couple of more details.

This house was a complete renovation (gutted to the studs and then some) and customized by me for me. It was intended to be a long term investment that I could live in. I ended up living there for a year and then renting it out. Not relevant? Maybe not. However, my previous and current tenants have been in love with the house. When my previous tenants were leaving, there were at least 20 phone calls to rent the house the first day it was listed. We ended up going with a couple that was willing to pay more than asking price for rent in order to secure it. My PM felt bad it was so easy to rent out that he didn't charge the full amount for placing a tenant. My point here: this is a high demand house in a high demand area that was completely renovated 3-4 years ago. Repairs and vacancy have been non-existent to date.

I do not have to sell this house. I have no plans to list it if my tenants do not end up purchasing it.

There is no clause stating that I must use my PM to sell or that he would be entitled to anything from a sell, other then his monthly rental commission through the end of our contract.

My point was not to "squeeze dimes," but more because I was afraid the appraisal will be inaccurate. I was there to "coach the appraiser" last time, but I will not be there this time. Who will explain what the steam shower is or point out the double-pained energy efficient windows, spray-in insulation, tankless water heater, etc. These things add up, no? I appreciate the advice, Bill, but no reason to get testy. It was just a question.

Even more info (if you care): this area was 8 feet under water after Katrina. Everything was destroyed. Everyone that bought there in the past few years bought gutted houses, empty lots, or investor-renovated houses. The neighborhood is back now. There are not many of these left, if any, comparable to my house. Thats gotta influence prices, right?

Thanks, guys.

Just to add some details to the situation. My property manager is not representing them, nor do I have a contract with him to sell. I agree with Bill and was already thinking I would definitely not be willing to pay full agent's commission for something like this. I was actually getting ready to ask what an appropriate offer to an agent would be to facilitate since I am out of state.

So I would not be out of bounds contacting them directly? Or should I just tell the PM and leasing agent upfront I would be willing to let them broker a potential deal, but am only willing to pay $X. I do have another agent I feel comfortable using and asking that question to.

Not sure if I would be willing to sell at appraised value without knowing what that is first. I am affraid the appraiser wouldnt get everything without my being there to point it out. Zillow is giving me no useful sells comps and I have no MLA access. Suggestions?

Also, aren't there tricks to selling for above appraised if needed (ie: keeping rent/pet deposits, selling appliances separately)?

BTW, this is my first property. I am hoping - if I sell it - that it will help fund my 2nd and 3rd properties as well as prove to future investors that I am capable.

How do I play this correctly to maximize price? The house was not on the market; however my property manager informed me that my renters (pre-aproved, good credit, etc) are interested in buying it. I said I would consider any offers. Neighborhood is in upper-end, high demand area in New Orleans.

I was not considering selling before I heard this. However, I was looking for funding to acquire some more houses, and could probably leverage the sale into two properties. Can I push for their offer without sounding desperate? Their lease ends in July.

I am new to this, so feel free to include any advice - no matter how obvious it might seem.

Thanks, Arthur.

I guess being employed for the last two years and owning a business in another country counts for nothing...

Questions:
-Two years of w2's is what I heard from my loan broker as well. If I establish income upon returning, could I get credit before 2 years provided I buy points and have some reserves?

-Is it bad that being indirectly told I can't do this from multiple sources is making me want to do it more and bigger? As in 2-3 properties to start with.

-Should I start w the private investing / hard money / and LLC questions here or move to a new topic?

Short: Can I refinance a rental property to cash out on equity without having a "job?"

Longer version: This house is in New Orleans - bought a destroyed property after Katrina and rehabbed. Lived there shortly and then rented it out. I have been living overseas for the past three years, so therefore have no recent employment history. I have been renting this house for 3 years - whole time with positive cash flow and zero vacancy. I'm ready to come home, so to speak; and I'm ready to rehab and rent some more houses. (1 to start.)

The plan: If the refi is possible it could net me maybe $30-35k. The duplexes I am looking at are about $35-50k and would need probably another $50k-60k rehabbing. Afterwards, I could probably refi with appraisal around $150k, rent one side to nearly cover the note while living in the other, and take cash equity to do it again.

This all seems dependent on the refi... Or should I be posting in the "creative financing" forum?