All Forum Posts by: Ellie Narie

While I have lived in Oregon and have spent a great deal of time educating myself on Oregon Landlord/Tenant Law, at the moment I am working on acquiring properties in Texas and unfortunately don't have the time to find the applicable law to send your way. But I do have a moment to toss out some ideas.

For one, since they are on a month-to-month lease, it's not really a matter of you having addendums for them to sign or not to sign. What you do is instead of renewing their current month-to-month lease, you provide them with your lease and your addendums as a means of continuing tenancy after you have provided them with the appropriate notices. The lease they likely have now is from the management company. Once you buy the property, I don't believe you're obligated to continue on with that management company. You just need to let them know that you are the new owner and that you no longer require their services. You (or the seller) will also be advising the tenants that a new owner is in town, and that you will be advising them of the new procedures. This includes where to send the payment and who to call when maintenance issues crop up.

Of course, if the management company has a contract with the previous owner for management services for a certain period of time, then you'll have a situation to deal with. But, in all honesty, I haven't really spent too much time with management companies, so I couldn't elaborate on the particulars there. (You could probably also ask the current owner to contact the property management company and have him cut ties for you.)

By and large, if you have any documentation that changes anything in regard to the tenants, they have to sign those documents. If you could create documents and the tenants weren't required to sign them to make them legally binding, then that essentially opens the door for ill-intentioned landlords to incorporate new rules and procedures without the tenant knowing, and then take legal action against them when they (the tenants) didn't know. Having all documents signed by all parties also ensures an easier process for you, the landlord, should a tenant claim they had no idea. If you get verbal confirmation but don't put it in writing, the courts generally won't side with you.

As to the property management company, I have pasted a couple links below for you to read:

https://secure.sos.state.or.us...

https://www.thebalancesmb.com/...

If I provide tenants with a new lease, do they actually need to sign it? I mean, they have no choice that the property management is changing, so it wouldn't make sense if they need to sign it.

Can I just cross out the property management's name on the current leases, and just add my name to it and provide the amended lease to the tenants (without requiring them to sign anything)?

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What's the official way to go about this in the state of Oregon? How do I give tenants an addendum without needing them to sign it? I am buying a property and will be managing it myself, but the current owners are using a management company. The rental agreements that tenants have are month to month. It says that they must pay rent to the management company. After I close on this place, what are the legal steps that I need to do? Do I need to write an addendum to the rental agreement saying that instead of the management company, they will need to pay rents to me?

Do I need to have the tenants sign it (and is it okay if they don't sign it)?

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Originally posted by @Kevin Romines:

What you are asking is referred to as selling the property subject 2 your lien held by a lender that did an FHA loan for you. Can you do it, Yes, is it recommended, that's up to you depending on the level of risk that you would want to take.

What I mean by that is, if you do it, you are subject to the "Due on Sale" clause in the loan docs you signed. What does that mean, it means that if you sell or in any way transfer title to the property, you are required to payoff the underlying loan. If you don't, and the lender becomes aware of the sale, they can (they don't always do this) call the note due and force a foreclosure on the property.

Can you get another FHA loan, you can only have 2 FHA loans out at the same time if the 2nd property is over 100 miles away from the 1st property. When you apply for the 2nd FHA loan, it will be come clear to the lender, and therefore FHA that you sold the 1st property on a subject 2 contract and at that point, FHA and the lender will most likely deny your loan request and you will now be subject to the Due on Sale clause in the 1st loan.

Why sell, why not just rent out all units after 1 year and then go buy another property? If you want to use an FHA loan for the 2nd property, then it must be 100 miles or more away from the previous property and must be owner occupied. If it doesn't fit those parameters then you will not be allowed to use an FHA loan to buy it.

You could always refinance the 4 unit to a Fannie Mae or Freddie Mac loan, thereby freeing up you ability to get another FHA loan in the same area as the existing 4 unit. That assumes you have the 25-30% equity after 1 year to be able to do such a refinance?

I most likely won't have the 25% equity.

I heard that FHA loans can also be assumed. Does the person assuming the loan need to qualify for it the same as if they were to get their own loan? As in, do they need to meet the income/dti requirements and the credit requirements?

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Let's say I buy a 2-4 unit property with an fha loan, live in it for a year, and then I sell it with owner financing. Is that allowed?

And that means that the FHA loan would still be in my name, right? Would my DTI ratio still remain the same? Could I get a second FHA loan if I do this?

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I'm about to close on a 4plex. Will I need to write a new lease for the tenants? They're all month to month. What if I have problems and they don't want to sign a new M2M contract?

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I'm about to close on a 4plex pretty soon. One of the tenants has recently moved into one of the units, and this tenant has bankruptcies and a criminal history (this includes burglaries) that is recent. I'm not sure why the current property management company that the seller had in place let this tenant in.

Any advice in general? I will have to live in one unit (one unit is already empty) and will be managing it myself. I'm getting security cameras set up, and some other security things done in my unit. Right now it's coronatime, so no one is allowed to evict anyone here, so I can't really do a non-renew right now.

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Originally posted by @Cynthia Meyer:

An umbrella liability policy adds an extra layer of liability protection above your landlord insurance. Do you own your property in an LLC? FYI, your future income can be attached if there is a judgment against you, not just your current assets.

No, it has to be in my name because I'm getting an FHA loan.

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I'm going to close on my first 4plex in a month with an FHA loan and 3.5% down. I don't have much assets, let's just say less than 50k in total (savings and stuff. Im young, so no retirement accounts yet). I've read on some posts that people who get an fha loan on a 4plex should consider getting something like a 1 mil umbrella policy. But is this really necessary if I don't have anywhere near that much assets to "lose"? The 4plex will probably appraise for more than I'm getting it for, so I guess that adds some extra equity... Should I just get the basic homeowners insurance?

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Originally posted by @Crystal Smith:

Originally posted by @Ellie Narie:

My lender said that because of coronavirus, it is possible to choose to have the appraiser not go inside the units (I'm getting an FHA loan for a 4plex). Should I still have the appraiser go inside or no?

I also got a home inspection, and the home inspector went inside all the units, so the tenants are ok with people going in there... but is there any benefit for me if the appraiser goes inside vs not? Here are the facts about the property:

Pros:

-2/4 of the units have nice wood flooring.

-All the units look "clean" and in "decent" condition, with some "buts"...

Cons:

-All the units need more caulking in the bathrooms and there is some visible (minor) vinyl water damage in the bathrooms (vinyl looks black-ish in some small areas).

-Exhaust fans in the laundry rooms not turning on in 3/4 units.

-Attic has signs of rodents (feces). Inspector said rodents probably climb on the trees and get in there, because there are tall trees touching the building.

-One of the exhaust fans from one of the unit's bathrooms is disconnected in the attic, so the fan essentially blows air from the bathroom into the attic...

-One unit has bad stained carpet, black in a lot of areas, but it hasn't been professionally cleaned yet, as the owners evicted the tenants from that unit (it will be the unit I will live in because it is vacant). Should I ask sellers to replace carpet?

Besides this, all the units look "clean" and in "decent" shape.

There are also some problems on the exterior. Some signs of dry rot, there was a little place where there was exposed wood (I know FHA doesn't like this, what should I do? It's hard to notice though). The siding has water damage in one area of the building, but otherwise, the building "looks decent" at first glance.

What repairs should I request from the seller? Where should I request "credits/discounts" on the purchase price from the seller? What does the seller absolutely need to fix for the loan to fund? Should I have the appraiser go in the units, or no?

If the interior pictures of the unit from the listing are accurate (assuming it was listed), there's really no need for the appraiser to go inside the units.

It wasn't listed, I'm getting it off market.

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Originally posted by @John Warren:

@Ellie Narie unless your realtor is worried about it not appraising then I would just have them do a drive by appraisal. I am finding that these are all going off without a hitch here in the Chicago market, and honestly I think there will be very few appraisal issues in the 1-4 unit space right now.

Are there any negatives to having a drive by appraisal? If it appraises for more than it's actually worth, won't I have trouble refinancing out of FHA later on?

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All Forum Posts by: Ellie Narie

Ellie Narie has started 94 posts and replied 200 times.

Post: Do tenants need to sign an addendum after you buy? (Oregon)

Post: Do tenants need to sign an addendum after you buy? (Oregon)

Post: Can I "owner-finance" a property if I have an FHA loan on it?

Post: Can I "owner-finance" a property if I have an FHA loan on it?

Post: Is a new lease required when you buy a property?

Post: Househacking a 4plex- one tenant has a criminal history?

Post: Do you need to buy an umbrella policy if you have little assets?

Post: Do you need to buy an umbrella policy if you have little assets?

Post: Should appraiser go inside the units of a 4plex or no?

Post: Should appraiser go inside the units of a 4plex or no?