Quote from @Ben Taub:
Quote from @Wesley Sherow:
Good morning Ben!
I am quite surprised by some of the prices in your post, since i'm familiar with the upstate market. A couple things that surprise me:
- $10,000 cash for keys is absurd. At most i've seen $500-1,000. Don't exceed that. Cash for keys should be assessed against your expenses. If it would take you $500 in attorney fees and 2 months to evict someone, then theoretically you break even at about $4,500 - so MAYBE that's justified on the cash for keys route, but remember at the end of an eviciton you get a judement for the full amount, meaning it's worth it to a tenant to get $500 in cash and have their debt forgiven, or get out of their lease. It's not black and white.
- $450 per hour is not a normal rate. I pay $550-600 for an eviction as a flat rate. It's not a complicated legal process and usually involves one in person meeting for the attorney with the court. And often good evicitons attorneys line up their evicitons back to back so they're doing 2-5 cases in the course of one hour.
Questions:
Is it worth paying them? $10,000? No.
Rent is always still due. It's likely the fixes you need to make you'd need to make regardless. If that's what holding up your payment, then go for it.
Once ERAP makes a payment, the tenant still has to make rent payments AFTER they are approved and paid out from ERAP, so yes start the evictions process over from the immediate next missed payment.
Unless Newburg is for some reason largely different from Albany, Troy, Cohoes which is my wheel house, it seems you're ill advised on this subject.
wow what an aducated answer .
first i want to give an update , that the erap was allredy recived by the seller ,right after closing , they are late with more then 3 months after the erap anyway , so dosn't matter
the calclation was that i can get 2100-2200 a month on each apt so its 4400 a month in rents for 3 month , plus 3700 in escrow for the attorney to begin with , but now i will defintylly take your recomendation .
in the mean time a freind of mine offered me to try renegoiate it down to 2000 cash for keys ( CFK........how does that sound ) , so will give that a shout as well
I'm glad my advice was helpful! Here's some additional concepts for consideration.
Renegotiating CFK is a good idea. Obviously I'm not completely appraised to the specifics but consider the following:
- Opportunity cost: How quickly could you put another tenant in there, and how much do you lose monthly by not collecting this rent.
- Cost of attorney: Check some evictions attorneys in your area and get fixed rate prices for evictions. Ask them the standard timeline in your town for an eviction, and consider that as the number of month's of lost rent, and opportunity cost.
- Amount of past rent owed. How much of a judgement would you get on the tenant once the eviction is clear. Who is this tenant, and do they care about their credit score? This is more ambiguous because there are people out there who wouldn't be bothered with this judgement. Whenever I inherit tenants WITHOUT ID'd and Social Security Numbers, i'll often just assume all that past due rent will never be seen again, but it doesn't mean you shouldn't bring it up ALL THE TIME as an offer for them to move out without going to court. It's a compelling statement to say HEY i'll give you $2,000 IN ADDITION to clearing your past due balance of $5,000. Now that whole deal is worth $7,000 to them, and only $5,000 to you (again depending on whether you think that this person will actually ever pay the $5,000 within the 7 year statute of limitations on credit judgements.
Once you have these figures, you'll know exactly what cash for keys is worth for you. If you want to DM me the specifics, i'm happy to help do the math with you.
Good Luck!
