Is this a scam or not?

Question

I was recently e mailed from a person saying they worked for these folks www.temporaryaccommodations.net

Has anyone ever heard of these folks or are they a SCAM?

They say they have tenants now for my house, short term of 4 months then month to month. They supply the tenant with $ to pay rent at a premium after the tenants lose their home to a fire.

My brain was going round this one in the middle of the night. If they have all these people who need temp housing, why not call a realtor? It feels a little fishy. But if its for real I want to go for it.

Thanks
Diane in Philly

Diane Menke · Answer

Rich thanks for your concern.

What I have is a purchase loan with a construction loan.

The house was purchased while in foreclosure and the copper had been removed by vandals, some items were unfinished. So we had to fix that and a number of other things, and put in appliances etc. We made money on the construction portion too.

Right now I am only paying interest on these 2 = about $700 per month. After 12 months they roll into one loan with a payment at around $1200.

My premium rental rate is $2700.00 plus utilities. By the way they say they want to take the house. Nice folks too.

We should be able to sell the house around 300K. So even an investor buying it who rents to students can see decent cash flow. I was very lucky topurchase this one.

Thanks again fellas. 
Diane

Timothy W. · Answer

Look in your insurance policy for something called "Additional Living Expenses".  That's what you'd be getting paid from.  There are many companies that administrate setting up the housing for insurance companies and act as the middle man.  They rent it from you, mark it up and re-rent it to the insurance companies.  Insurance companies use them because they know they can make 1 call and get a tenant anywhere furnished or unfurnished for any length of time.  Leases like this typically don't exceed 12 months as that is usually the limit of additional living expenses in a policy.

Rich Weese · Answer

Like many prevoius stated income loans that were to recast down the line, you're holding a lit keg of dynamite. The fuse is 6 months and then the interest rate EXPLODES. What is your exit strategy if market is bad, no refi available etc. What looked like good rent now, won't be at a hgher Rate, imo.

Diane Menke · Answer

Guys thanks for your tips working with these folks. I re-read the explanation and yes the insurance co pays directly. The tenant signs the lease so to be the responsible party to the agreement.

The rental rate is very nice. I have an interest only mortgage for the next 6 months on the property and the rent I get from this deal will be several times that amount. If they rent until spring or summer, (4 months as per our agreement) I think it will be a better selling climate.

Thanks again,
Diane

Harrison Painter · Answer

We have done insurance housing via our property management company. The checks always come direct from the Insurance company, they tend to pay all at once, and will accept a 6 month lease.

*** To protect yourself,  verify the company with the Department of Insurance in your state to make sure they are licensed to do business there. Look them up with the BBB (Better Business Bureau) as well.

Dick Green · Answer

I was contacted a while back by an insurance company that was seeking to provide temporary housing for one of their clients.

In your example, my first question would be.... why the insurance company isn't paying the bill directly?  I would also want the person staying in the home to be personally liable for rents should xyz company failed to pay in a timely manner.  This would mean going thru the whole process with them i.e. credit, income, past rental/mortgage histories ect...