All Forum Posts by: Trenton Hall

I'm going to post what I find here so other landlords can handle conversion, trespass of chattel and abandonment of property disputes they have with dead-beat tenants in California. By posting the information, I'm hoping to keep fellow BP landlords out of seriously-hot tenant-friendly legal water. 

If you're a residential landlord and the tenant or any other property owners left behind property after vacating the premises, see CA Civil Codes 1980 - 1991 before you even think about moving, disposing or keeping their property. You're obligated to hold it for a period of time. You can't keep it, hold it or sell to make up for unpaid rents, fees or damages. Follow the procedure in the code for "safe harbor"

If you're a commercial landlord and the tenant or any other property owners left behind property after vacating the premises,  see CA Civil Code 1993 - 1993.09. Special note, if there are chairs left behind with a sticker on the bottom that says "XYZ Chair company," you're obligated to contact the chair company to investigate if it's their property. On a good note, if you give it to them and the tenant claims the chairs are owned by tenant, you're not held liable for giving it to XYZ Chairs. As the landlord, you give it to whoever said it was theirs first-- and that's that.

With respect to my issue with a landlord that hasn't yet evicted the tenant, is the only key holder to the property (tenant gave up keys) and won't allow me to enter and retrieve my property, there may be grounds for conversion or trespass to chattel. In short, when a landlord is exerting control or dominion over another owner's property, the landlord is interfering with the owner's right to the owner's property.

In a nutshell, trespass to chattel is the "little brother" of conversion. It's for people that want their property back and money lost by not having ownership of it. Conversion is money sought for the entire value of the item and money lost by not having ownership of it. If you won't allow a tenant, lien holder or owner to retrieve their property, they have pretty good grounds for a suit.

I'm making note now that this information I find is with respect to California (tenant friendly state). A lot of these laws seem to be the same or very similar in other states, so check your area. Additionally, taking legal advice from a person you don't know on the internet isn't really wise. At best, I'll be pointing you in the right direction for your reading.

Further Reads / Links:

Is this property abandoned?

Dealing with RESIDENTIAL property abandonment

Dealing with COMMERCIAL property abandonment

• Explanation of commercial abandonment code

Sue for Trespass to Chattel or Conversion?

Conversion Explained

Jury's Instructions: Conversion?

Jury's Instructions: Trespass to Chattel?

Hey Biggerpockets,

I have a service contract with a tenant, who was served an abatement warrant. For those unfamiliar with abatement warrants, the city puts it's own locks on the property for a period of time to stop the activity. This abatement warrant ends tomorrow (10/1), and the landlord has an eviction hearing sometime around the 7th-9th. Poor guy is pulling his hair out because his tenant isn't paying.

Here's the catch, I'm a third party with a service contract at the property and have no agreements with the landlord. My machine is locked inside because of the abatement warrant. I've called the landlord today to ask if I can get my machine tomorrow and show him a contract between the tenant and myself stating that the machine on site is mine, and the tenant has no claim to it. The landlord said that I have to wait until the eviction process is over. 

I went through this exact scenario at another location, and it was no problem to pick up my vending machine. The landlord sounds like he wants to hold me financial hostage telling me there might be a fee for him boarding up the property to protect my machine. It sounds like because the tenant isn't paying him, he wants to take my machine.

As a parallel, a landlord doesn't have a claim to a third party's POS system leased to the tenant right?

This sounds really illegal to me... landlord thoughts?

@Adam Berryman Welcome!

I'm in Oceanside, CA as well. It doesn't seem like the best place to start so far. I'm finding myself looking outside the Oceanside community for an actual deal. From what I understand, there are buyers (local and foreign) that are paying all cash above asking price without seeing the property.

There's a non profit real estate investment club that meets in Oceanside once a month called NSDREI. I went as a guest last month and as a newbie found a ton of value in it. 

The analyst showed that overwhelmingly in southern CA, there is a lack of inventory, and it is consistently shrinking month after month, pushing prices higher and higher. Thus, it's a sellers market, and people are buying homes like hot cakes. 

The guest speaker that night reinforced his findings. He was a land developer and basically said that since there is no inventory, he builds new homes and sells. He also talked about a strategy of additions when flipping. Long story short, if homes in Coronado price ~1K sqft, it makes awesome sense to build an extra 50sqft onto a home.

Hope this helps Adam! Once I get my membership to NSDREI, I think I'm allotted guest passes if you want to come. Dinner is served and the analyst alone seems very worth the time.

Your local newbie,

Trenton

Daniel,

It sounds like you will have to do a conventional loan. FHA is for buyers intending to buy a property and move into it as their primary residence. That doesn't mean you can't buy a property, live in it, and rent out other units or bedrooms at the property for a few years and refinance the FHA into a conventional loan once you've got 20% of equity built into the home.

Additionally if you have any co-borrowers, they will also need to live at the residence. There are some exceptions to this rule, but that's for another thread.

The government takes this pretty seriously, because they consider it abusing a government aide program by misrepresenting your intentions to a lender. Don't try it, they will find out. Getting caught buying an investment property with FHA and not living in it likely involves an FBI investigation and a felony for mortgage fraud.

I'm in a similar scenario as you and would be happy to share any of my findings on the topic or send you a few comprehensive reads. As always, take any advice from this forum or your mortgage lender with a grain of salt and do your due diligence. Nobody wants to be a felon after their first real estate investment!

Your buddy,

Trent

@Jacob Cooper for your first marketing campaign, you're going to have to determine your target market. If you have just a "broad stroke" target market, that's okay. You could set up a "broad stroke" route and see where the calls are coming from. If you do this, find out why the target needs to sell.

Counter to the broad stroke campaign, I think there's enough data out there to really hone in on the type of deal you are after-- an almost foreclosure, a fixer upper, etc.

Narrowing it down and understanding who you want to market to helps you craft a more effective campaign that really resonates with them. For a bad example, You're probably wasting your time/$ by putting "Avoid Forclosure" in a stable area, and you wouldn't put "Compramos Su Casa" in an area without a reasonable amount of Spanish speakers. 

Since I don't know what kind of deal you are after, I'm just going to throw some ideas at the wall for anybody else reading the thread. I've also posted some solid links at the bottom.

• Get LOCAL area code phone number that is easy to remember (google voice)
  
  • Use number groups, repeating numbers or relevant words
    • (760) 333-4444, (760) 111-7676, (760) 123-CASH
  • Could substitute phone number for website, but I've heard phone is more successful IF you can actually make time to receive the calls and ask questions.
• Use demographics / data to determine your target market and appropriate messaging. Keep it as short as possible, because they are probably seeing the message from their car.
  • Key words and phrases "Cash, Fast, Problem Solved, Forclosure"
    • Avoid foreclosure-- if amount of foreclosures in area is increasing
    • We Buy Homes Cash-- broad stroke, no credit issues, speed
    • Vender su Casa Rapido-- "Sell your home fast", is audience Spanish speaking?
    • Problem House SOLVED -- For unsuccessful sellers or distressed properties

Elements of a successful Bandit Sign campaign:

http://www.fortunebuilders.com/run-successful-band...

10 Bandit Sign Mistakes:

https://www.biggerpockets.com/blogs/169/blog_posts...

If you're looking for more information on Memphis in terms of statistics, check out the link below:

http://www.bestplaces.net/city/tennessee/memphis

Understand that this represents Memphis as a whole, which would mix the good and bad areas. From what I understand, Memphis has very great areas and very bad areas.

It's good practice for an out of state investor to build a local team or partner with a seasoned investor in the area. Do your due diligence on the people you work with, the process, and the property itself. 

Additionally, REPUTABLE turnkey companies like Memphis invest create value for out of state people-- it's a prebuilt team with a business model that's been shown to work. Depending on YOUR business model, see if something like that is worth looking into.

Welcome to the forum @Andy Schulz! There's so much to be learned here. The short time I've spent in the Bigger Pockets forum has only led to great information and real life connections. Definitely take notes on the content in the "Learn" tab.

Everyone has an advantage in real estate. With just the little information you've provided, definitely look into financing with a VA loan. Additionally if it fits your business model, you can cater your rentals/flips towards military. There's some great advantages renting to military or selling to military!

Let me know if I can help you in any way. I've been working on some criteria to evaluate out of state markets, and would be happy to share the numbers on wherever you think you'll move.

Warmly,

Trenton

Post Send: Try and attend a real estate investor club in your area. I went to my first last night and I was blown away. Getting in the same room once a month with land developers, money lenders, contractors, and real estate agents is a great catalyst for your education and investment portfolio to grow!

@Alex Meza remember that as we go 2 or more hours away from our homes into unfamiliar territory, we may lose that "local knowledge" edge we have over an out of state investor. You're still able to drive to the property if anything goes wrong, but do your research. There are money pits in California just like there are in other states.

I'm a lot like you, I want to invest but I feel my surrounding area of Oceanside, CA is just too high priced to begin anywhere. Take a look at this quick graphic I've linked too. Maybe look somewhere like San Bernardino, one of the fastest expanding counties around. Point being, it may be 3 or four hours away from you, but it's better than 3 or 4 states away from you.

http://www.car.org/aboutus/onecoolthing/county/

An FHA loan is great for anybody held back by low credit or insufficient down payment savings. Just remember that with an FHA loan, you will have to live at the property. I was going to explain this, but naturally someone has already written up this discussion, and I've posted it here!

http://homeguides.sfgate.com/fha-occupancy-guideli...

Bottom line-- If you use FHA, make the house your primary residence. Live there as owner/occupant/(landlord) for more than a year while renting out the extra bedrooms (or units if you get multifamily property). If you don't live there the majority of the year, you are likely committing mortgage fraud and get into serious trouble. It sounds scary, but if you just follow the FHA rules outlined in that article you will be fine. As always, be upfront with your lender when asking about FHA loan.

@Jonathan Guerrero really spelled it out the situation nicely. You've got enough for a down payment or a great rehab, but not really both if you plan to put 20% down in Bakersfield, where the median home value is 200K.

If you fix and flip, you're likely going to require a partner with capital. It's also going to take up a lot more of your time and has a lot more potential to backfire. I have no experience with fix and flip, so maybe someone else can provide insight. By the way you write, it just sounds like you might be biting off more than you'll want to chew.

What about finding a deal on an ALMOST rent ready home that needs some minor repairs, or just needs some updating. You've got the skills, but it doesn't mean you should commit 40 hours a week to your new property. Maybe just rehab the siding, the windows and the kitchen and see what you're comfortable with. You've also got experience renting, so it's not like you're new to this world.

The advantage you have over other people is that you already understand the criteria for your investment.

To summarize your criteria:

• Investment should be self contained, not requiring money earned from labor wages
• Investment should be profitable in 10+ years

On a scale of passive to full time job, @Ty Kirkpatrick's advice on investing in the paper side of things is the most passive, "buy and hold" would be somewhere in the middle, and full fix and flip would be the most time consumptive. If you don't need the money for 10 years though, ignore the fix and flip until you're fully comitted. Why not look into the "buy and hold" strategy or examine the paper side of investing in real estate?

Or, just get an education here on Bigger Pockets and learn to evaluate deals. Then, become the silent investor type. There's many people out there that need your down payment in order to act on what you have confirmed through your Bigger Pockets education as "a great deal." It happens all the time, just make sure you know how to recognize a bad deal just as well as a good deal when you have 15 people showing you.

Join a real estate investor club in your area and tell them you can fix anything, and you have some capital. They'll accept you with open arms, and you'll pick up a ton of contacts on the way!