All Forum Posts by: Steve Hall

Given that the tenant is going to pay for the damage, why would you not hire a licensed professional (the best one you could find) to fix the damage?

I clicked on this thread because of the title "Florida Law about Security Deposit", however the title seems to be misleading. Given that others will likely click on it for the same reason, I am going to respond to the title as well:

Under Florida Law , you are required to notify your tenant within 30 days of the lease expiration that you intend to withhold money from their security deposit, how much you are going to withhold, and why you are withholding it. The notice should be delivered by certified mail, and should state the following:

• This is a notice of my intention to impose a claim for damages in the amount of _____ upon your security deposit, due to _________. It is sent to you as required by s. 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to ___________.

If a Florida landlord fails to give the required notice within the 30-day period, under Florida law, that landlord forfeits the right to impose a claim upon the security deposit.

@Ketan Pandya,

Good for you for trying to find a real estate attorney. Most BP members think they can just crowd-source legal advice.

I have been having a tough time finding a new attorney as well. They all seem to have the same problem: Once they get big enough, they ignore their smaller clients. I need a knowledgeable real estate/business attorney who (ideally) I can just call and speak with, or (at the very least) one whom I can call and set an appointment to speak with within 48 hours. If I write them an email, I'd like a response within 48 hours.

Is this really too much to ask?

My most recent attempt to find an attorney was a disaster. I ended that post with "If any anyone knows an attorney that can provide better service than this, please let me know." No one ever answered... 

@Nandy B.

Sure it can be done, but that is not the way to do it. 

To best advise you, I would need a lot more information about the strategy (BRRRR, fix & flip, buy & hold), the properties (cost, condition, ARV, vacancy, current rent, etc), and you (skills, employment, income, DTI, home ownership, equity in your home, and down payment / amount of savings)

@Frank Mirando

Like @Thomas S. said, there must be a reason this guy wants to pay 12 months up front. (I disagree with Thomas that it is always a "bribe". He's stereotyping tenants. That is why I did not up vote his comment.) Did you ask the guy why he wants to pay 12 months in advance? Did you tell him that you still needed to run a background check?

I tried this once, paying 12 months rent up front. No property management companies would even consider me, so that left me with individual landlords. Most thought I was on the lam, a drug dealer, or a sexual predator. Really, I just did not want anyone to know where I lived. I didn't want to give my social security number out, I didn't want my name on their rent roll, I didn't want to show my 1040's to them, I didn't want them pulling my credit history and I didn't want them reporting my address to the credit bureaus.

If someone approaches me with an offer to pay for a year in advance, I would consider it as long as they explain to me their reasoning and they agree to let me run a criminal background check. I would ask them questions about their business, why they don't buy a house, how they can afford to pay $10k+ in one lump sum. I might also make them show me proof of funds (i.e. where the money is coming from.) I would work with them based on their situation, not jump to unreasonable preconceived conclusions (as most landlords do) on what this might mean.

You have to buy the property cheap enough to get it to work... The rule-of-thumb is 70% of ARV. And you have to keep your rehab costs to a reasonable level, like $15k to $20k for these cheaper properties.

Your subject property's $83,900 asking price is only 80% of the $105,000 ARV. If you get it for $70,000 or less, this would work...

• Asking Price: $83,900
• Accepted Price: $70,000
• Cash needed for 20% down payment: $14,000
• Loan amount: $56,000
• Rehab cost: $16,000
• ARV: $105,000
• Refi (@80%): $84,000
• Remaining cash after paying off $56,000 loan: $28,000

Remember, if you put in a bit more than you get back with the refi, it's no big deal. Within 2-3 months, (by the time you find your next property) you've already made the money back from rent!

Make sense?

@Robert Wood

You have a big problem. You've opened yourself up to liability by not having a signed document / agreement with regard to the $1,500.

The potential tenant is claiming that she did not sign anything agreeing to allow you to keep the "deposit" if she failed to move in. She can claim that the money was pre-paid rental deposit, which in my state, MUST be returned within 15 days unless there is damage to your property. If you have email correspondence that CLEARLY documents that you informed her, and she knew, that the payment was non-refundable if she did not move in, then you could probably prevail in court.

Even if you are sued, you would have court costs and attorney costs (and travel costs), which you might be able to pin on her if you prevail, but would likely never be able to collect, even with a judgment.

So it's decision time: If you can find that correspondence, then I would keep the deposit and ignore the demand letter. If you cannot find where she was clearly told that the deposit was merely to HOLD the unit and was NON-REFUNDABLE, then you are unlikely to prevail, and it would be wise to refund the entire $1,500 (via check) and call this is a cheap lesson.

If you refund the $1,500, you could still be sued, however no attorney is going to take her case since you acted in good-faith by refunding the money in full (albeit delayed.) If I were her attorney... I would ask hr for emails/texts and written docs. If I think think that you never communicated that the funds were non-refundable, if I found out that you live in Seattle, that you own 3 rental properties (in your personal name?) and that you would have to travel to TX for mediation & court, you bet I would file a claim for my client.

I am not attorney and this is not legal advice... It's just what I would do.

@Kevin Reid

The Florida "Residential Contract for Sale and Purchase" that all Realtors use has a clause, Paragraph 2(a), which says "The initial deposit made payable and delivered to Escrow Agent named below..." and then there are two check boxes:

(i) Accompanies offer

(ii) Is to be made within _______ days (if left blank, then 3) after Effective Date. IF NEITHER BOX IS CHECKED, THEN OPTION (ii) SHALL BE DEEMED SELECTED.

If no deposit was received within 3 days (or whatever number was written in the blank) then the buyer(s) are in breach, and seller should send written termination. Deposits are often late now-a-days, so this is an easy out.

Read Paragraph 15 and 16 regarding Default and Dispute Resolution. It's pretty easy to get out of a sale / purchase contract in Florida.

@Christopher Freeman

Lots of problems here:

• Why wasn't the husband there for the tour? Did you ask? Does he not care to see his new home, did he want to avoid answering questions, or is he always drunk and doesn't work?
• If you got a "good vibe" from the wife, but a "bad vibe" from the husband, which vibe would you go with?
• Why doesn't the wife work? If she was working, they could have prevented the foreclosure?
• You should have a policy on foreclosures. To me they're like evictions: 0 tolerance.
• If you had never met her, and just saw an application: Husband unemployed for 1 year, new job for last 2 months, wife unemployed, foreclosure, 600 credit score... would you consider renting to that applicant?

That's a great question @Chris Lawrence, but there are 3 problems with your request:

1. Most investors pay hundreds or even thousands of dollars for custom written agreements (drafted by licensed real estate attorneys). They're not likely to share those documents for free.
2. Each partnership or joint venture is different. Your agreement has to be written in such a way that it spells out all the issues that you and your partner have agreed upon.
3. You're cutting the wrong corners to try save a buck or two.

Although some people will share their agreements, most investors are not going to share documents with anyone who just asks for them, especially if they've spent a lot of money on them. They will tell you the same thing I would tell you: you and your partner need to hire an attorney to draft your partnership. An experienced attorney has written hundreds of these documents and knows exactly what to include in your agreement.

For those that are willing to share their agreement with you, you have to ask yourself some tough questions:

• "Did this investor hire an attorney to draft this, or did they just write it themselves?"
• "Will the language in this document hold up in court in my state (or country)?"
• "Does this agreement cover everything regarding my particular situation?"
• "Is it worth it for me to save $1,000 and risk 100's of thousands?"

Don't get me wrong, I love reading documents, especially leases. Every time I read someone else's lease, I either see how great mine is, or I find something missing that I should include. I usually get my documents for free when I make offers and ask for them during underwriting.

@Cindy Harney

If you have $20k for a deposit on a new home, and your DTI works, then keep this one as a rental... It's a positive cash flowing rental of passive income, and your tenant is paying the mortgage and you're building equity!

If you don't have the money to put down on another primary residence then you'll obviously need to sell it and use the equity as a down payment on a new house.

Another idea is to wait another 13 months and then sell it. The property might appreciate another 5% or 10% and you can sell it with a section 121 exclusion (no capital gains tax!)

Last but not least, you could wait another 13 months and then rent it for 3 years before selling it. You'll still qualify for the section 121 exclusion and your property could appreciate 20%-30% in those 3 years.