All Forum Posts by: Tim M.

I made an offer on a MF short sale in PA - was a solid offer, at least 85%+ of appraised value. 2 months later the bank finally reviewed it and verbally advised my agent that they would be accepting the offer. We have not received written acceptance. I just found out the current owner filed bankruptcy 3 weeks BEFORE my offer was submitted. Neither my agent nor the listing agent were aware of this - I found out by stopping by the property. There were notices on the doors for tenants to vacate immediately due to bankruptcy, etc... all tenants had moved out. We contacted the listing agent and she advised she would try to pull something together with this deal - to keep it out of bankruptcy proceedings. Given that the bank, the owner, and the buyer all wish to proceed with this deal, common sense says this deal should still happen. We all know banks don't do 'common sense'... How likely is it that this deal will still happen? Any thoughts or advice? If it does proceed to a bankruptcy trustee sale, anyone know a rough time frame? and isn't there also trustee fees (5% or so) to come up with out of pocket? One of my concerns is the time frame - tenants have vacated, water and electric will be shut off during upcoming winter months - could be repairs needed. My revised offer at that time would obviously be less - it would behoove the bank to allow this deal to happen now. Anyone gone through a situation like this?

Great responses from everyone! I would suggest finding a short sale specialist. If you can find one that has much experience with investor buyers - even better. The typical buyers agent isn't all that interested in a short sale, as others have said, from a pure business standpoint - it takes more work, more time, and many times an OO buyer will eventually back out anyway and choose another property because of time constraints. Add to that an inherent reduced purchase price (and reduced commission) and its no wonder agents arent interested. A short sale specialist is more willing because they have the experience and knowledge to get the buyer to closing - possibly quicker and cleaner. They know who to call, what to say, what steps to take, etc. And with an investor buyer, there is the upside of future deals. With an investor buyer its also less likely they'll back out - since they aren't moving in, they're a little more flexible on the length of time to close. Sell the agent your 'investor' status.

Agree with Nathan Emmert. I'm also in the MFH crowd, so unless I can get all the tenants on board with electronic payments, then it's not really helping me much. At best I still have to go to the bank to deposit some of their checks/money orders anyway... if not actually collect them. And getting them all on board is another story entirely - not gonna happen - unless I buy them a computer, pay for their service, set it up for them, and remind them to use it every month.

Here's how I would get around the partial payment dilemma - this is with using Chase quickpay. Mind you, I've never actually had to do this so I'm not sure it would hold up in court. Once a tenant pays any amount, I get an email from my bank stating 'tenantA sent you paymentX, go to our website to accept'. If I never accept then it's never deposited to my account. If it isn't the full amount, I don't accept the payment. I have a lease addendum with these Quickpay payment instructions, also stating I will not accept partial payments. I don't see why this wouldn't work. Anyone have any experience with this?

Not sure if other banks have a similar feature, but I recently started using something called Quickpay at my bank (Chase). Very easy to setup, very secure, and free (provided you have an acct there). Basically a tenant would go to my banks website and set up their side - linking their email (or cell#) to their bank acct info. I already have my email (or cell#) linked to my account. Once they are set up, they can simply send an email with the rent amount. I get an email stating rent was deposited. Tenant can't see any of my personal bank info, other than email address. This can also be done via mobile phone but I prefer email.

Haven't had this type of offense with a Sec8 tenant. But it seems like Sec8 has a "guilty until proven innocent" policy. I had one tenant completely removed from Sec8 because a neighbor tenant complained that tenant1 had 'unauthorized' people (boyfriend) living with her. Within 2 days I received a letter stating tenant1 has been removed, there didn't appear to be ANY investigation by Sec8, etc. Tenant1 had to come up with the rent on her own for the next month. Evidently, she appealed this decision and won, she was back on Sec8 the following month. I guess it would be extremely difficult for HUD (or any LL) to prove any unauthorized additional people living there, without proof/pics, etc. The point is Sec8 took immediate action and then investigated the facts after their decision.

correct Charles - he isn't making any payments and he put no money in, he has had no activity whatsoever - other than cosigning the loan (still a gracious gift to me). Probably should have used the term cosigner instead of 'partnership', but I wasn't sure if our arrangement constituted a partnership (we do not want that). Not sure on the 1098/99 - the mortgage statements (bills) are addressed to both our names, although they come to my address and I pay them. So I would imagine the end of year 1098/99 will be sent the same way, 1 statement in both our names, to my address. From what you're saying, seems like the deciding factor is who is running the activity and not who is on the mortgage? Just curious, if we received separate 1099's would that change your answer?

Mark Updegraff - interesting, wouldn't have thought that, will definitely speak with my CPA. Charles Perkins - No, he has no money into the deal and no interest - other than being a cosigner.

Earlier this year I purchased a MFH. Because I already have an investment prop that is unseasoned my DTI was slightly over the requirements. For the 2nd purchase I convinced my father to let me "borrow" his excellent DTI, by obtaining the loan together. I had the finances for downpayment etc, just not the DTI ratio required. (I will refi it as soon as the other prop become seasoned). He's fine with it and has no interest in equity/ tax advantages/ payments, just doing me a favor by partnering on the mortgage, but wants me to refi into my name alone within 1 yr - no problem. My question is regarding Sched E and tax returns. Technically we are 50/50 partners, both on mortgage and title - do we HAVE to both file Sched E returns? Or is he able to allow me to claim 100% of this property? Anyone know what IRS position is on this? I first thought, whats the difference as long as someone claims 100%. But because he's in a higher tax bracket, perhaps the IRS wants to see his 50% (net income) taxed at his higher rate? Also, would it have made a difference if he wasn't on the deed?

Michael D. makes a good point - adding submetering will definitely increase resale value, I would guess you'd get all (or most) your money back. Although this may not be a significant deciding factor if you plan on holding for 10-15 years. Also consider this, with my particular water co. (in northeast PA) - if submetered, the water bill is attached to the tenant. There is no lien on the property if a bill goes unpaid. The water co. will go after the tenant for payment. Not sure if this varies with each water co. or if this is by county, check with your local water co. With the RUBS system, if a tenant vacates with an unpaid water bill - you must pay it (then try to collect from tenant in court, etc).
I think Joel said it already - it sounds like you may be too late, but depending how close you are to closing, ask the seller to pay for it, or pay a comparable amount in closing costs. K. Marie Poe has some good advice - if you're interested, it's fairly easy to get details of utility billing from the owner or utility companies, then do your own analysis.