All Forum Posts by: Steven Warner

Daniel: 

I don't think that is a script but there is a skill - listening.  

He is tired, would like to get out from underneath them, etc.. - but WHY is is wanting to move on - do NOT presume he is tired.  He may say that but what is it he is really saying?   

If he says he is "tired" of the maintenance - then what he is really saying is that without directly saying is the homes are in need of work, Right?  It is not about him but this is also about homework on the proprieties.  

What is it going to take to get them up to a more marketable level?  It is more than just paint and flooring, maybe it is a furnace that is getting along in in years. Evaluate the homes yourself.  How are the roof, plumbing, heating?  Has he had issues with these?  They sound like older homes, so how are the windows?  What type of insulation?  Is the kind that settles?  My point is to make a list - for both properties and run some numbers so that when you talk with him- it is more in global terms such that "Ok, I might pay your price but I was thinking about the furnace, its an older forced air unit and probably is going to need to be replaced in the next couple years (Start with the most obvious and expensive item).  Those are not cheap so I understand you want out of the home home just to avoid the cost of replacement but I am sure you understand I have to consider that in my offer."  I think you see where I am going.  Pick three items to discuss along as well.  Always make sure you tell him you understand why he wants out.

But it may be he wants to just plain move to Mexico- do a dump and run.  then sit and talk with him about Mexico some and then say you would like to make that happen for him but then back to the repair list (don't ever push it on him). The key to all of this is to get them talking about their"pain" or their "desire" and that to get to the point the pain is gone or the dream is realized, its better to sale to someone who understands.  

I am not saying this works but you never know.  Real estate is about relationships so listen to the seller, ask a question and then let them role... develop the relationship and you will be surprised what can happen.

At the end is where I would say, you know, given that you agree the furnace, the windows etc need work, I think the best I can go is $180 but I think I might be able to to go $185k because I want to make this happen for you (the seller).  I understand where you are at staying at $200 but I think the win-win point is closer to $185K and I think we can make this happen.

Just don't fall too "in love" with the deal.  Its a business so while you have found a start, it still have to works for you. 

Good luck 

Steve

I am sorry to just jump in but I see that a couple of you have companies that are handling notes.  Do any of you handle non-performing notes?   I have been interested in those but it is a tough market to find the right people.  Any suggestions would be appreciated. 

Thanks

Steve  

Dustin:

I feel what you are saying but would you train your competition? Would you take time out of your day to show a stranger how you do your thing(s)? How you take e pool of potential properties and distill it down to a handful and then find the "one"?

Too many individuals post on this board seeking mentor after saying they read RDPD and then do not understand how they are not chosen to be the "apprentice" to their "mentor".

Simply put they say I read XYZ, Listened to pod cast  123, and attended "... (guru) name...", then say "What do I do next?" Bluntly put - take a reading comprehension class for starters. Let me explain. In RDPD Kiyosaki says he did all this work for free and learned nothing, yet later he wanted to meet a mentor and did everything the mentor asked, even though it netted him nothing financially - Why? The question is not with the mentor but with the apprentice. What value did the apprentice offer to the mentor? What did he know, or even pretend to know, that the mentor could use - ultimately, what value was the apprentice to the mentor? if someone here offered to mentor, what do you offer for his mentorship? Read the book, as a newbie you should offer value to a mentor...

And if he charges for his mentorship, wouldn't you if you were training someone in your area? In fact, would you train the competition? I don't know if I would train for what I do but if I did, I would be charging for it too.

But, if I was starting out, I would target those mentors doing what I would like to do and seek to understand as much as I could in that area (Flipping, wholesaling, Buy and hold etc...) I would stay in that area and learn as much as I can on this board, as well as others, and then as much as I can about the person I seeking mentorship from. Years ago I sought out the partners in my area who bought over 50% of the foreclosure sales in my area. I looked at the properties they were looking at and learning why they bid what they bid at the FC sales. I talked with one of the partners a lot and we talked real estate the whole time.. Oh, I learned he was an avid golfer etc... but I also learned how and why they did what they did. My knowledge of what he did and was doing opened the door to a partnership on a few deals.

Yes, he was one of the many mentors through the years so do not look for just one...

So the bottom line is to be of value to the mentor - create a value. Understand the mentor - what does he do and why does he do it that way?

Otherwise, you will remain like so many who post on here.. "I read.. I listened to... so what do I do next"  ...  I would still offer they should take a reading/listening comprehension course.....

I apologize if this sounds harsh but simply put by others... "***, gas, or grass, nobody rides for free.."

Good luck to you

Steve

Alec: 

Let me make a suggestion that if you mother-in-law is really in a spot to move (I don't know what her motivation is for moving) then if your future wife has good credit etc.. then work with the lender for simple assumption of the mortgage.  I will not get technical here but the backer of the loan may or may not allow assumptions of the mortgage but many will when it is a family member.  The reason I suggest you try this first is that you will be building your credit history while assisting your mother-in-law by getting her named removed from the mortgage.  

The next this is the "subject to" situation described above where  you continue to pay on the mortgage in her name while you do all the work etc... The biggest pitfall here is that unless you have an agreement in writing as to what everyone's duties and responsibilities are and then mother-in-law dies, a sibling or even another relative might make a claim to the property. (And trust me when I say that even though the relative may say now they do not want any part of the house, when there is money on the table that rats will come out.)  I would suggest that you do a simple trust in her name (avoiding a property tax issue) and in the trust she name you and your wife to be as successor trustees and beneficiaries of the trust.  After a while have her resign as trustee making you and your wife now trustees of the trust and beneficiaries so in essence you own the property with her mortgage and no "relative(s)" issue. 

There are more ways but I would do one of these depending on everyone's motivations. 

Bottom line - do not let this go!  This sounds like it might be the perfect first step for you. 

Good luck! 

Steve

PS.  And if you don't want to do it--- I am open to it!!!  LOL... 

And good luck to you and your wife!

Alec: 

Let me make a suggestion that if you mother-in-law is really in a spot to move (I don't know what her motivation is for moving) then if your future wife has good credit etc.. then work with the lender for simple assumption of the mortgage.  I will not get technical here but the backer of the loan may or may not allow assumptions of the mortgage but many will when it is a family member.  The reason I suggest you try this first is that you will be building your credit history while assisting your mother-in-law by getting her named removed from the mortgage.  

The next this is the "subject to" situation described above where  you continue to pay on the mortgage in her name while you do all the work etc... The biggest pitfall here is that unless you have an agreement in writing as to what everyone's duties and responsibilities are and then mother-in-law dies, a sibling or even another relative might make a claim to the property. (And trust me when I say that even though the relative may say now they do not want any part of the house, when there is money on the table that rats will come out.)  I would suggest that you do a simple trust in her name (avoiding a property tax issue) and in the trust she name you and your wife to be as successor trustees and beneficiaries of the trust.  After a while have her resign as trustee making you and your wife now trustees of the trust and beneficiaries so in essence you own the property with her mortgage and no "relative(s)" issue. 

There are more ways but I would do one of these depending on everyone's motivations. 

Bottom line - do not let this go!  This sounds like it might be the perfect first step for you.  

Steve

PS.  And if you don't want to do it--- I am open to it!!!  LOL... 

Good luck to you and your wife!

Jess 

This is one of those, there is "right" and "right thing to do" things.  Your argument in court would be , I rented it last time this way, and they knew it going in there would be no door.  Their argument is that they rented a 4/2 but the missing door makes it a 3/2 so you false advertised (or they say you said you put one on.). 

Not knowing your jurisdiction, the courts are generally going to look a protecting the tenants because you are the big bad landowner...  Welcome to the "new age".

So look at it differently.  

Are these generally good tenants?  Pay on time? Clean? And are they the type of tenant you would like to keep for a long term?  - Then put up a door - no conditions about putting the property back in the original condition.  

Or are the type of tenants you want gone ASAP?  They will trash the place when they vacate so why give them another door to mess up?   You never know, they may need it for a legit reason (baby).  

So there is being "right" and "doing the right thing".  I would put up the door to keep the peace.  They are not expensive and you never know - you might be keeping a long term tenant for a couple hundred dollars.  

Just my thought is all

Steve

PS.  Plus it give you a good reason to bump the rent up when renewal comes around due to increased "expenses". 

Sean: 

I have thought that might make things easier for you when considering percentages.  When you make you deal, are you looking for someone that loan/invest this one time or are you looking for something that might make things easier when it comes to raising money down the line?  

Real estate is about relationships and when I do something as you are by proposing a new venture with someone new, I am willing to concede a little bit more if they are someone I think I want to be able to go back to at some point.    

So after pointing out that your are matching/half the money needed, found the deal, and will be running the deal so that they have no true involvement, I would think 20-25% would be about right - probably the lower end actually.  But if they are leaning more towards 30% then I would point out what your role is but I would say to them "Look, if you think 30% is fair, I am willing to do it for the sake of building a partnership for other deals. But I would also like for you to observe the amount of time and effort I am putting in on this deal so in the future, we can revisit the "labor" portion on our next deal."   

They may agree or not- but at least you have now pointed out that you want them to observe all the time and effort you put into the deal so as to form a good working relationship.  

Just my thoughts 

Steve 

Well said Russell  on all fronts, especially "It is a business so treat it like one."  

When confronted with this issue, deny tenancy on other grounds to avoid a Fair Housing Claim (Insufficient income, a more qualified applicant etc..).

Yup, pretty sick of the ESA crap. 

Good luck Everyone!

Steve

Frank: 

If they signed the application pictured, you can keep it as liquidated damages - it says it right in the application which is a contract itself to have the tenant sign a lease.   

If they did not sign it then you need to break out the check book. 

Now, even if they did sign it, they may still try to get it back and unless this is common for your area- some judge might give it back to them because it is "excessive". 

You might want to ask other LLs in the area if this is common and allowed.  

Next time get an application fee and tell them you will continue to show the property until a qualified tenant shows up with the first month's rent, last month's rent and security along with an application fee. If they want it bad enough they will be back. 

Just my thoughts... 

Steve

Jennifer: 

I doubt you can increase in late fees during the term of a typical lease; barring some statutory provision in Minnesota allowing you to do so.  For a lease to be modified both the tenant and yourself must sign some sort of addendum to the lease allowing for such an increase.

Now if the tenant is on a month-to-month tenancy then the you need all you need to do is given them the statutory notice required for your state.  

OK, now for the fun part- here is what I do- rent is due on the first, period.  I give no grace period.  Why you ask?  Simple, first everyone one knows when the first is so it has to be in my possession on the first or a late fee is automatic and will be followed up with a Notice to Pay/Quit at a time of my choosing.  Second, and more important as to why the first, because judges have become more and more lenient in giving tenants time so the quicker I am in court to get them out the better (Thanks California Rent Control!).  I also make sure everything is in writing to the tenant - certified, first class, and email -  It is tough to say I never got it when I sent it Certified Return Receipt because even if they never pick it up I get it back unopened.  Then, all I have to do is hand it to the judge and ask them to open it at the UD hearing funny how I have a copy in the file matching the unpended envelope and  it is the same as in the first class mailing; let them deny the email all they want.  Notice is real tough to deny- even if it is for a late fee ($50)

I am not sure if I helped you. 

Good luck!

Steve