Real Estate Investing: Eviction Fail. Tenant over over 5K in back rent, refuses to sign payment plans. Judge rules in tenant's favor. What are my options now? |
- Eviction Fail. Tenant over over 5K in back rent, refuses to sign payment plans. Judge rules in tenant's favor. What are my options now?
- Should I buy 1 larger property, or 2-3 smaller ones?
- BRRR Refinance Appraisal Riddled with Errors
- Thoughts on options?
- Refinance 4plex now or wait until next year?
- Switch from property management to self managed
- Cash-Out Refi / Chicago, IL / Multi-Family
- Brand New To Real Estate Investing, Advice Appreciated!
- Should I rent 3 units to a company?
- Closing next week/Mortgage lender changing rate
- Leasing documents
- What happens if I give a CASH offer that's well under what's OWED on the property?
- Real estate Development Good Business?
- 4plex appraisal came back 30k less than offer price. What to do?
- 2nd mortgage on a 1031
- Loan agent says I can't put my Bank of America-mortgaged multi family under an LLC?
- Affect of leverage on cash on cash return
- How to sell a fourplex off market
- Reverse House Hack for FI
- Love it or List it?
- Multifamily market outlook for after the election?
- Property Deal but has roach problem
- Which one would you pick? Build and ADU close downtown, or by a SF in the suburbs?
- What topics are most real estate books missing?
- What are my options?
| Posted: 09 Oct 2020 04:17 PM PDT This morning, our manager for our property located in TX went to the eviction hearing that was ruled in favor of the tenant. Our tenant had been renting the house for about a year prior to COVID and had no issues with making rents on time ~$1300 / month. The tenant is self-employed and has told my manager that he has been unable to work "due to COVID." We've been trying to work with him since April allowing 1/2 month's rent, trying different payment plans, etc... The problem is that he does not communicate with the property manager, refuses to sign any lease/payment contracts, and does not answer the door when she attempts to establish communication. In June, with one of our payment plan options, we offered to forgive all of the remaining balance ~$2500 AND return the security deposit ~$1300. He chose to not sign the contract and continue to ghost our property manager. Due to these factors, we decided to proceed with the eviction proceedings. This morning our property manager called us and said that initially in the eviction hearing, everything was going well as all of the communication (or lack thereof) was well documented and the judge seemed to be sympathetic to our situation and our attempts to work things out. However, when the tenant presented a CDC eviction moratorium declaration, https://www.cdc.gov/coronavirus/2019-ncov/downloads/declaration-form.pdf , the Judge's tone immediately changed and he ruled in favor of the tenant. Now we can't do anything until December 31 with the looming possibility that this moratorium gets extended. On top of that, our tenant has told our property manager that he has family in the area and was looking at larger houses with higher rents to move into. We're ready to sell the house and get out of this bad deal. We've had this property for 15 years and claimed depreciation and were going to look to do a 1031 exchange in the near future anyway. Any insight from the experts out there would be greatly appreciated! TL;DR. Tenant hasn't paid rent since April, refuses to work payment plans, ghosts PM, plays the CDC eviction moratorium in court, judge rules in tenants favor. Landlord (us) sucks it up until Dec 31 at the earliest. [link] [comments] |
| Should I buy 1 larger property, or 2-3 smaller ones? Posted: 09 Oct 2020 07:34 AM PDT Hi folks, New investor here, researching out-of-state multifamily for a buy-and-hold strategy. I have enough starting cash that I have a choice: I can buy 1 property that is larger, has more units or bedrooms, is in an A or B quality neighborhood, is in better condition, and is in a city or neighborhood where values are currently appreciating. Or, I can buy 2 or 3 properties that are smaller, B or C neighborhoods, might need more rehab, and are located in a city or neighborhood where the market is more stagnant. How do I weigh this decision? Thanks! [link] [comments] |
| BRRR Refinance Appraisal Riddled with Errors Posted: 09 Oct 2020 03:51 PM PDT I performed my first BRRR in March (terrible timing!). While we had a slew of roadblocks, mainly surrounding Covid but also due to some plumbing issues as well but here we are fully rented and stabilized (3 unit building). We used a hard money loan to finance the purchase and rehab and are in the process of refinancing. The process of getting a hard money loan included an "as complete" appraisal for $225,000. The rent actually received per month is $800 in excess of the rent figure used in the aforementioned appraisal, so my view was that the appraisal was conservative. Fast forward to this week. We had an appraisal done to refinance the property. It came back at $200,000! Now I know many people contest appraisal results and more often then not fail in the process, but how many of those appraisals are riddled with errors?
There is more, but I'll spare you the details. #1 and #2 seem grounds for negligence. I've reached out the lender and explained in detail everything I've outlined above and more. I also sent them the original appraisal that was completed in February. They are reaching out to the appraiser for comment. Has anyone dealt with something like this (a factually inaccurate appraisal) and if so, what are the odds I get a favorable response and/or the lender approves a 2nd appraisal. [link] [comments] |
| Posted: 09 Oct 2020 10:13 PM PDT One of my good friends is a real estate developer in San Diego and has a ton of options on older single-family homes. One of those homes happens to be the house that my wife grew up in (it's a beautiful house) and has a lot of sentimental value to her. Because of this, he's open to selling me the option at a discounted price (~$15K). Now, the problem is is that the owner is in her mid-70s and the option comes due when she dies and/or sells the house. In this world of uncertainty, that could be tomorrow or 5-10 years down the road. I don't have the money right now, but should be able to buy the house if it's in that 3-5 year range (I've calculated in expected price increases). The house is down the street from where I live, it has great rental value, and homes appear to only be appreciating in my area. I'm just not sure if it's worth shelling out $15K for the option when she could die tomorrow and I'm shit out of luck. [link] [comments] |
| Refinance 4plex now or wait until next year? Posted: 09 Oct 2020 07:32 AM PDT I have a 4 plex which is currently FHA financed at 4.125% interest. I have the chance to do an FHA streamline which would bring my interest down to 2.25%. I want to take a conventional mortgage to get rid of PMI and so I can put the property in the name of its own LLC but I am newly self employed so I'd have to wait until at least a year from now to be eligible for conventional. What would you do? Would you go ahead and take the FHA streamline or wait for something better? [link] [comments] |
| Switch from property management to self managed Posted: 09 Oct 2020 05:28 PM PDT Hi newbie here. We have been using a property management company the last 2 years on a single family rental. The lease expired in July and they are now on a month to month lease. I have always been frustrated that we use this company because they charge a large amount ($500-600) each time they get a new tenant for us, not to mention a percentage of the rent when we are already kinda hands on anyway. I want to manage it myself (I already manage 1 myself) since I'm wanting to learn the property management side of things and willing to put in the time. We already have contacts for gardeners and handyman. I have talked to the tenant and they are okay with working directly with us if we manage the property ourselves. We would be executing a new 12 month lease with the tenant and keeping rent the same. My question is, is this allowed? What are the steps we should take to ensure this is handled in the right way? Would we just end the contract with the proeprty management company and the tenants would give their 30 day notice? Just want to make sure we are doing things the right way. [link] [comments] |
| Cash-Out Refi / Chicago, IL / Multi-Family Posted: 09 Oct 2020 01:39 PM PDT Hey all, I closed on my first building/property in March of this year in Chicago. It is a common Chicago two-flat. There are two units as well as a garden unit for extended family that I don't rent out. I rehabbed the "distressed" property myself, (new kitchens, bathroom on 2nd floor, fencing, etc). I am house-hacking and live on the top floor and rent out the first floor unit. I get $1,600 every month in rent from the first floor and can rent out my top floor unit for $1,800 when I move out next year. I can also airbnb the garden unit if I really wanted to, but haven't yet. My plan is cash out refi and use the funds to either invest into another property (BRRR), or just invest it in a conservative money market account after the election. The value of the property has gone from $375k > $525k via the appraisals. My credit score is >750. After the cash out because of the lower rate, my monthly payment will stay the same. I have a good, stable job, and can handle the mortgage payment even if the building was empty. Current Scenario: Purchase Price: $375k @ 5% Down, 95% LTV Mortgage Type: 3.375% 30 year Conventional, PMI is ~$95 a month Mortgage Balance: $352k Appraisal: $375k Payment: $2,400 Proposed Scenario: Refinance: $420k @ 20% Down, 80% LTV Cash Out: $48k Mortgage Type: 2.99% 30 year Conventional, no more PMI Closing Costs: $17k, really high because they're charging me 2.5 points @ $10,500 Appraisal: $525k Payment: $2,400 Do you guys think that even though the closing costs are high, that this is a good deal for me to go through with? I'm essentially going to be paying $17k spread 30 years for ~$50k cash. I can use the cash to purchase another distressed property (BRRR), or conservatively invest it in stocks. Thanks for all of the help! [link] [comments] |
| Brand New To Real Estate Investing, Advice Appreciated! Posted: 09 Oct 2020 08:40 PM PDT Hi! I'm a student at UC Davis, CA. I wanted to get some advice from seasoned real estate investors or people who have an interest in this pursuit. I'm currently studying for my bachelor's degree in the biological sciences before I head to nursing school; I have a fair amount in my MMA but not enough to buy a home in California. I was wondering whether it is legal to contribute my money to half the price of a house and jointly own it with someone else who puts their money into the other half. Therefore, we would share the rental income proportional to how much we put in. How would this plan be executed? Where would I find someone willing to jointly own a property with? Where do I read about tax information, real estate laws, legal issues, contracts, etc. to fully prepare for this? Basically, where do I start? How do I avoid disaster? Is this process even legal? Could somebody provide links to websites or recommend ANY material to help? I would really appreciate it, thank you. [link] [comments] |
| Should I rent 3 units to a company? Posted: 09 Oct 2020 08:38 PM PDT I have a 3 unit building in a good area near the beach. All 3 units are vacant right now. A guy is interested in renting all 3 units from me. He works for a company that needs to have apartments to provide for workers on travel. Basically I guess their workers would stay in the unit at a few months at a time. Is this a disaster waiting to happen if I rent these units to them? I am mostly worried if there is an issue and having to take them to court. Any advice on this or special things to include in the lease would be appreciated [link] [comments] |
| Closing next week/Mortgage lender changing rate Posted: 09 Oct 2020 12:46 PM PDT I'm a week from close, and the mortgage lender sent over the closing disclosure. The rate was more than a point higher than what they sold us on all the other cost estimates. After calling, they said they screwed up and the rate they originally sent was wrong; however, we could have the original rate if we bought more points. This strikes me as dishonest and negligent, but is it illegal? [link] [comments] |
| Posted: 09 Oct 2020 12:58 PM PDT What free or paid ( prefer free) landlord document website do you prefer. I keep signing up for "free" leases and at the end there is a paywall. Any suggestions? [link] [comments] |
| What happens if I give a CASH offer that's well under what's OWED on the property? Posted: 09 Oct 2020 10:04 AM PDT I'm thinking about buying a single-family that needs a whole ton of work. The owner owes over $60,000 on the property, but it's not worth more than $20,000. What could/would potentially happen if I offered the owner, say, $20,000 in cash for the house? Obviously they're still on the line for $40,000, but would they need all $40,000 at the time of sale to complete the purchase? Does cash sale make any difference? Any suggestions on how to navigate this process? [link] [comments] |
| Real estate Development Good Business? Posted: 09 Oct 2020 06:44 PM PDT I want to get into the business but I need resources. I'd like to hear from ppl who have a couple years experience in the industry I have zero experience [link] [comments] |
| 4plex appraisal came back 30k less than offer price. What to do? Posted: 09 Oct 2020 07:49 AM PDT As I stated, the offer was 397k, the appraised value was 367k. I have a contingency for anything 5k above appraised value that I can walk away, and this is 30k over. Haven't seen a ton of 4plexs in my market and aside from needing additional cash to close, the numbers make sense and the property returns about over 1k/month after factoring all expenses and financing. Seller aggreed to reduce price by half the difference. If the property is profitable (buy and hold strategy) how much more would you negotiate? [link] [comments] |
| Posted: 09 Oct 2020 12:05 PM PDT Getting down the path of my 1031 journey, I've closed on the sale of a duplex and I am under contract on a single family home. The new property will be Airbnb'd and will be used by me under the terms of the 1031, the greater of 14 days or 10% of total days rented. I am qualified for a traditional investment loan on the sfh but the mortgage broker is pushing a second mortgage which would be both faster and cheaper. Could a second mortgage affect the 1031? The 1031 company basically said, "maybe, consult your CPA." My CPA hasn't responded yet. [link] [comments] |
| Loan agent says I can't put my Bank of America-mortgaged multi family under an LLC? Posted: 09 Oct 2020 08:39 AM PDT She says that the bank will not let me transfer the deed of the property to an LLC because that would mean I was removing my risk from the loan. But I thought this was common practice for multi family owners, to form an LLC to create a legal separation between yourself and the tenants. Am I missing something here? I thought this was common practice but she's telling me it's not even allowed. It would just be a sole proprietorship LLC. She said that I could try to set it up with my lawyer but I should hope that the bank doesn't find out or they might demand I pay the mortgage back in full. [link] [comments] |
| Affect of leverage on cash on cash return Posted: 09 Oct 2020 08:27 AM PDT Cash on cash is my preferred metric. How does leverage affect the quotient? I'm struggles with the math. Any rule of thumb here? I understand leverage can exaggerate too. Similar affect? Steer me right if I'm off course [link] [comments] |
| How to sell a fourplex off market Posted: 09 Oct 2020 08:15 AM PDT I am moving away from the TX city I live in and would like to save the realtor fees. I have sold a house before so I am familiar with the services I am passing on. I live in a unit now so I would like to primarily market to investors who are looking to house hack because I know it was difficult for me as a new investor to find such a deal. Another option would be to move out and lease my unit if the buyer prefers. Where would be good places to market a property and deal like this? My plan is to go through a real estate attorney for the sale/closing documents. Would there be any issues doing it this way? [link] [comments] |
| Posted: 09 Oct 2020 08:25 AM PDT Mid 50's. HCOL area. Small business owner. Building a six plex breaking ground next month, and moving into one unit. Using the sale of my single family that I have owned for 18 years, to lower the note on apartment complex. Making one of the units really nice, rooftop deck, larger footprint. Will have no personal mortgage. Should make over $2600 from this apartment complex, and the unit I live in would rent for $2500. I have another duplex that throws off $2300 a month. I have another six plex, that we built 4 years ago, that throws off $5100 a month. Will have 150K in cash, no real investments other than that. Know that I am too heavy in RE however the area that I am in is growing by leaps and bounds. My plan is to sell my small business to one of my employees for cheap, 2k a month for the next 3 years. Its worth much more. Then travelling for the next few years, with my place as a home base. I property manage the places with my wife, may hire a property manager after I sell that places so its more hands off. Thinking after I make this move, I will fully fund a Roth, HSA. Looking for any holes that people see. [link] [comments] |
| Posted: 09 Oct 2020 03:35 PM PDT Hi there. I am trying to decide whether to keep or sell a rental property. To summarize my info: - I am 43 yo. - Current value: $300K. - Purchase: 2007 for $210K. So, total appreciation is ~50% between then and now. - Desirable part of the city. There will likely be continuous demand for renting this condo. - Mortgage: 6 years / $75K left. 3.5% interest rate. - Current Monthly Rent: $2200 - Current cash flow: After the mortgage, condo fees, and maintenance, around $250 per month. Some of it ends up going to a MM account for maintenance, the rest to an investment account. You can call current cash flow $0 considering the time I put into it etc. - Dealing with new tenants, getting it cleaned every year, the upkeep etc. does get tiresome at times. My wife does not want to deal with it (3 little kids) so all of it is on me. - If I were to sell it, I would invest the money in ETF of mutual funds. - Captial gain taxes would be around 15%. Does is make sense to keep this rental or sell it? If I can get through the next 6 years until the mortgage is paid off (zero cash flow until then), I am looking at around $1500-1800/month cash flow after that. But even then gains/value starting in 6 years would be around 6% - 7%. On the other hand, if I were to sell it today, I could take advantage of the interest that my investment will earn rather than waiting for 6 years before I do that. I realize the property would likely appreciate during that time, but I don't know by how much. So, my current thinking is to sell the condo this summer. I feel like I can do better in the stock market with mutual funds / ETFs. Any advice on what I should do? Am I missing something big? What arguments are there to talk me out of selling it? [link] [comments] |
| Multifamily market outlook for after the election? Posted: 09 Oct 2020 09:22 AM PDT Hey folks, What are your thoughts for how the multi-family market will respond to the election? Since Washington D.C. has stalled a further stimulus bill, layoffs and unemployment filings continue apace. The housing market has been strong in many areas, in part due to the earlier stimulus efforts, and in part due to flight from densely-populated areas of cities. So what do you think will happen next in the multifamily market after the election? Is Q4 the time to invest, or wait till Q1? Do us all a favor and don't devolve into political arguments. Let's keep this on the data. Links to specific reports, analysis, and data would be helpful. [link] [comments] |
| Property Deal but has roach problem Posted: 09 Oct 2020 08:45 AM PDT A deal came across my desk for an apartment complex property that has some potential but needs renovation and has a pretty bad mouse and bug problem. Personally, I can't stand mice or roaches and I'm not too keen on dealing with it. Has anyone dealt with this before? Property was also flooded 5 years ago from a river overflow. I suspect a lot of shortcuts were taken on the repairs since current owner seems pretty awful. What can I do to investigate if the property has mold? [link] [comments] |
| Which one would you pick? Build and ADU close downtown, or by a SF in the suburbs? Posted: 09 Oct 2020 10:15 AM PDT Excuse me if this has been asked before, new to this sub and would like to know what others think. My primary residence is a single family house close to downtown and the zoning allows for an ADU to be added in the back (and there are plans for allowing 4plexes, but that newer zoning plan has not been approved yet). My very preliminary calculations say ~$50k can build us a large one bedroom ADU, which should bring in 1200-1500 a month in long term tenents and a little more in short term renters. Another option would be to put ~$65k as down payment for another single family house in neighborhoods where rent would cover the mortgage, taxes and maintenance in first year. Two sides of the argument are: - Housing prices have been growing rapidly in our city, while the cost to build has not increased with the same rate. With that trend, it would make sense to buy now, and build in the next years.
What do you think? Where else should I look and what other factors should I take into account before making a decision? [link] [comments] |
| What topics are most real estate books missing? Posted: 09 Oct 2020 10:02 AM PDT As a former economist to the real estate industry, one of the analyses we continually updated was the performance of the stock market compared to real estate (as measured by NCREIF ODCE returns). While the stock market sometimes bested commercial real estate by quite a bit, CRE always won in the long term. The same holds true for small MF investments (in most locations) and even SFH homes, so long as an LTV of at least 60% was used. But I have never seen this in a real estate book ever. To me, how real estate fairs against other asset classes seems like one of the most obvious things to start a book off with. So my question to all of you is; If you were writing a book on investing in real estate, what would you be sure to include that most books don't? [link] [comments] |
| Posted: 09 Oct 2020 01:39 PM PDT So I recently bought a house (less than 6months) for 160k with a loan of 155k. The house appraised at that time for 213k...that's before any updates, painting etc was done. My question is, how soon can I refinance in order to buy another property...and how much should I pull out of the first house? The first house can easily rent for 1.5x the mortgage+escrow, but is that enough for it to be worth renting out? What would you do in this situation? [link] [comments] |
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