All Forum Posts by: Zachary Moon

@Linda Thomas I'm not sure if you're having to deduct for damages to the property but you should be able to take whatever is left of it and use that towards your costs to move and store. If it costs more than the security deposit to do that, well that's part of being a landlord. If this is your situation you could then send the list of deductions that would show damages to the property and costs related to moving and storing your former tenants belongings. And if 30 days pass and they still haven't picked up their stuff their property is considered abandoned and you could sell it to recoup your costs if they end of costing you money. If this is your situation you shouldn't be able to be sued as you followed the law. 

In PA if a tenant requires the landlord to store their belongings for up to thirty days they are responsible for the landlord's costs.

Are the belongings still in the rental? If you wanted to get them out of the rental to get it ready for your next tenant you could pay someone to move them to some self-storage place pay for a month and leave it to the tenant to have to come get it. Any costs you have in doing would be tenant responsibility so you could take that out of the security deposit. After thirty days the property is considered abandoned and you could do whatever you want with it whether that be you dispose of it, give it away or sell it. If you were to sell it, I'd escrow the money for 30 days to protect yourself from the claim of misuse.

I'm not a lawyer but this is my understanding after reading Pennsylvania Tenant-Landlord law. Your tenant just can't use you as free storage for 30 days. 

I would say yes, you should require a security deposit and them sign a new lease for your protection. You could keep it as a month-to-month lease if you and they prefer. You won't be able to take from the security deposit damages beyond the condition of when you take possession as you can't prove they caused the damage since you just became the owner. Having the security deposit would help if they stopped paying rent and it could be used as a bargaining chip later on if you have issues with them later on.

I feel your best bet at that price point would be either wholesaling and/or creative financing like subject-to and seller financing. Essentially you'll be looking properties that you can negotiate favorable terms/price with the owners. For those you can get with little money or nothing down you could hold on to as rentals. Those properties that are not feasible for you could be wholesaled to other investors as and help put cash in your pocket to continue your efforts find properties and keeping properties you like and can afford.

I would advise caution in keeping properties with no money in reserves to weather obstacles that may occur so you don't lose the property. Wholesaling can also have some legal issues and I don't have the knowledge base to give advise on how to do it correctly. I'd advise finding a successful wholesaler or mentor if you choose to do this to protect yourself.

Hope this helps.

Sounds like you have a pretty good grasp on your situation. Seems like you have around approximately $3,400 in P&I, Insurance, Taxes, and PMI if required with your loan. I don't know your market but how much could you get for your friend's bedroom and bathroom assuming he finds other living arrangements? If you get some similar to what your getting for the other one the house would be costing you $800 before other expenses like vacancy, maintenance, capex, and utilities. Not bad to have a cheaper place to live.

I think your plan to stay there for 2-5 five years is good if you save money to put towards future investments. I'm not sure if you're looking to buy properties in the same area you are currently in or if you will look out-of-state. Depending on appreciation you could have a decent amount of equity in the coming years. At that point you'd have to analyze exactly what you want, do you sell and buy a bigger home for you and your family, sell it to invest in better properties, keep it as rental, keep it as a rental and perhaps get a HELOC or Home Equity loan to invest in another property with the proceeds.

Hopefully this gives you some food for thought.

Interest rates I believe are predicted to stay low for the next two years supposedly but I can understand wanting to have some piece of mind. I'm personally a fan of HELOCs since they are reusable. For your question for Home Equity interest being written off, IRS guidelines only allow for the interest of home equity loans to be written off when the money is used to "buy, build or renovate your home". This can also be for second homes so in the case you buy this second home and move into and renting out the first the interest would be deductible if I understand the guidelines correct but you should ask a CPA because in my former career I was an auditor, and not a tax accountant.

Hope this helps!

@Daniel Molina Brought up some good points. To not have to use an agent for this transaction if you don't want to go through it and your own I'd recommend reaching out to a real estate attorney and/or title company that can likely do the work for you and for a lot less money than an agent would cost you.

For negotiation to purchase be sure to bring up that the mutual friend will be able to stay (I'm wary of renting to friends so keep that in mind), he gets his money out of the property, can save money from selling to you if you don't use an agent for the process, and that he doesn't have deal with selling to a third party that he doesn't know that could be a pain to deal with. See where he stands on price and how open he is to coming down to what you'd like to pay. At 330,000 sale price 6% commission would be nearly $20,000. If he doesn't want to to budge you could say that he'd be saving $20,000 by selling to you so could he do $310,000. Perhaps that wouldn't be his price to you and you could get him down even lower but that's up to you to negotiate.

Best of luck!

I'd recommend talking with your broker/mentor about how you're feeling. I just got my license in May and I understand how you feel. If you don't have a broker/manager that can help guide with this you may be with the wrong broker

When you get a lead you need to pre-qualify them and make sure that you understand what they are looking for and how they want to go about the process. You may come across some leads that are not viable in the sense they can't get a property due to things like credit, work history, etc. Others may be people who may just be extremely difficult to work with and may not be worth the hassle or your mental health.

You definitely should meet them or call them. Are you just sitting on leads that you haven't talked to? You may have to nurture some of these leads over months to finally make a deal because everyone has a different timeline.

It's important to have confidence because if your clients/leads can tell you aren't they may start looking elsewhere for an agent. By no means should be pretend to know everything but I always strive to helpful and if I don't know something I am straightforward about it and will figure it out as quickly as possible so I can be of service to them.

Feel free to reach out if you have any questions.

Have you talked to the agent since this occurred and brought this up to them and gotten their response? I'd do that and then reach out to their broker and file a complaint/talk with the broker. You could also file a complaint to the state.

The National Association of Realtors® Code of Ethics states this in Article 3, "Standard of Practice 3-9 of the Code also states that Realtors® representing buyers or tenants "shall not provide access to listed property on terms other than those established by the owner or the listing broker." They may not be a member of NAR and this doesn't exactly fit this situation exactly but I'm sure the their broker and state would agree that their behavior was unethical and unprofessional.

Apart from that I'm not sure what else you can do to actually enforce it and protect tenants. If you file the complaints it should teach the agent a lesson. 

Hello BiggerPockets,

I'm looking to connect with others who live in my area and share the same goals in REI as I and learn from others experiences as well as share my own.

I purchased my own home with my fiancée , a SHF, in April 2020 with 0% down. I have fairly good credit at around 750 and around $20k in savings. 

I'm currently studying to get my real estate license but will shortly be leaving my W-2 in the next month and would like to become an agent for find another W-2 to replace the income I'm losing.

I'm very fortunate to have a fiancée who shares the same goals and aspirations as I. I'm interested in buy-and-hold investing and would like to employ strategies that will possibly allow me to use less capital to start such as seller financing and subject to. I'd love to hear any advice and tips that you have to share.

Zachary Moon