The Most Landlord Friendly States

54 Replies

to think you just sell for 5k down and take it back in 30 or 60 days is wishful thinking at best.'

He has sold houses like that every week for the last 10 years. And pays 500 to a grand for foreclosures. Yeah, I need to get him on here. :)

That is true. The can go south. When they do here, here is what happens - 

- we start foreclosure in 30 days. 

- the house is empty in 60-90 days. 

- house is resold 5k down again, usually in better shape. 

I tell every investor the risks when we talk about it - default, and it takes time to find a good end buyer so be patient. And we deal only in cash with investors, so your money is tied up. That is told to every single person I ever talk to. 

Obviously you know your stuff Jay, so I guess I need to get him on here sometime soon to answer your questions. I will see what I can do, it would be illuminating. Thanks.

@Account Closed  

  no worries..   your last post is more realistic...

folks dont' pay  you send them letters they are now 30 days late  ( not including the new federal law that requires 90 days before a foreclsorue can start) but lets say TExas does not follow that.. So your 30 days late you start foreclsosure there are statutory advertising time lines in each state in the Union. so lets say your calendar falls exactly perfect and you can schedule your sale for 60 days out.. so your 90 at best.. but your attorney is not going to realistically hit all the dates perfect so your 90 t0 120 days plus your 30 days late in the beginning.. so realistically in your model its probably 150 to 200 days before you get the asset back under your control.. Then you have a tenant that still won't move then you have to do the eviction another 30 days... so 180 top 230 I would if I was a betting man figure what it takes to take these deals cradle to grave.. I would also think your partner boss whoever goes heavy for CASH for keys.. I would if I was him. Because you have no spent lets agree a minimum of 1k on foreclosure and say 500k on eviction that's 1500 and lots 5 months of payments or rent that another 3500 or so.. Plus the sky high property tax's and insurance.. so now your down 5 to 7k before you can then sell again and get 5k down and you probably have to pay a commission to resell no one is going to do it for free...

That is how I would see this scheme working in real world.. And like you said your partner has done this 100 's of times so that means he has foreclosed 100's of times and that would be expected. that was my experience when I experimented with seller carry back low down sales form 2001 to 2004... very high default rate. especially with sub prime borrowers. but that's just me.. your market could be far different.

thanks Jay, I'll run this by john, but our default rate is low, we have a pretty good set up here in our town. It does work very well here specifically, which is worth noting when talking about owner finance. It won't work as well everywhere. I had plenty of bad experience with rentals, everything has down sides. I prefer owner finance where I am anyway. Good night:)

@Account Closed  

  the benefit of being on the WEst coast we can type you guys into submission.

I am sure you have a fine operation. just want all those folks out in BP land to have a fair and balanced look at all the options we have in this great country of ours..

I agree that GA is Landlord friendly but be careful of the county because some courts are busier than others which makes a difference when you inevitably have to evict.

Jay, yes sir, I agree. I know you have the best of intentions. I respect your opinion sir. I came up with this statement for one of my blog posts....

Note: This strategy may or may not work in your specific market. The strategy works well in our San Antonio affordable home market, your experience may differ. Any REI strategy has risks, and this one is no different. Be sure that you follow all applicable laws and regulations in your area. Dodd Frank rules require that all potential owner finance buyers be fully qualified to ensure their ability to repay the loan.

@Account Closed  

I would say 90 days to foreclosure in Texas is doable but very optimistic and the timeline has to fall in place :

The mortgagor misses a payment and is now 30 days late       30 Days

Prepare and send the mortgagor the Notice of Acceleration to call the loan due.  Must give them 20 days to cure and bring current.  Best case  20 days

Post for foreclosure no sooner than 21 days before the foreclosure option.  Best case 21 days.

Here is where timing comes in to play as foreclosures can only occur one day per month on the first Tuesday after the first Monday.  So, if your timeline doesn't work , you must wait another month to foreclose

Once the foreclosure occurs and if the mortgagor has not vacated, you must go through the eviction process which could take another 21-28 days in a best case scenario.  If the mortgagor has a tenant in the property,  you can add several months to that to get them out

Jay- Its possible to get an attorney to handle it for $1000 or so and a mortgagee could actually do it themselves

thank you for the comments greg. I do not handle the foreclosure side of our investing here in SA. I just know what my partner tells me, and yeah, guy pays 1000 tops for a foreclosure, using his RE attorney. I would love to get John on here, he'd be a great asset to this forum, but he does not do online forums :(. I will ask him a few questions later today after this thread though, thanks everyone. 

of course, in our specific market, we are dealing with blue collar guys who often just hand over the keys and move out. That's the culture we deal with. So, this model works well - in this market. 

VA is pretty Landlord Friendly, for eviction you can get a court date in about 3 weeks, less if it's an emergency eviction. If tenant doesn't show up you get immediate possession. If tenant shows if landlord has to wait 10 days before filing Writ of Possession. Once you file the Writ of Possession Sheriff has 30 days to serve 72 hour notice, but it's usually less.

Total time frame for eviction approximately 1 1/2 month.

Possession orders are valid for 1 year from date, so even if you choose to work with the tenant regarding the  non payments, if tenant doesn't stick to his/her end of the agreement, you can still move forward to get possession of the property.

If tenant is late on rent twice within a year, you can evict.

Also you don't need a RE attorney for evictions in Virginia, all the court documents are online so you can fill them out, print & pay your filing fees to file.

I'm a landlord in California and, like most other people on here, have always heard that California is a very landlord-UNfriendly state when it comes to evictions.  Mostly, it was just other people's comments/opinions that caused me to believe that, but I wanted to find out firsthand whether this was true or not.  

I've never actually had to go through with an eviction myself, but it's always a possibility so I thought it was important to find out how the process truly works and whether or not it's as bad as everyone (including myself) seemed to believe.

So, a few months ago I actually went to the local courthouse and sat through an entire day of eviction hearings.  It was very eye-opening and I encourage other landlords to do the same in their jurisdiction as I learned a lot.

I watched all different types of hearings (i.e. landlords represented by attorneys, landlords not represented by attorneys, uncontested evictions, as well as evictions contested by the tenant both with and without witnesses on their side, etc).  However, in every case, the judge seemed to listen to both sides and reached the same conclusion I would have had I been in her shoes.  She was very reasonable.  

My main takeaways were that evictions aren't nearly as bad as everyone makes them out to be -- in fact, they were fairly easy and quick.  The judge said she is required to hold these hearings within 20 days of the eviction process being filed.  If the landlord wins the case (and the landlord won every single case that I watched), then the judge said it usually takes the sheriff about another 2 weeks to remove the evicted tenant (i.e. do the lockout).  

So we're talking about 4-5 weeks total for an eviction.  I don't doubt that other counties could be different, and certainly some judges may not be as fair.  But that is just as likely in any state.  Overall, after this firsthand experience, I no longer think California evictions are that bad and will certainly be less apprehensive if the time ever comes where I have to do one.

good input Kyle. One thing I keep seeing in real estate is that the 'common perception' is often not exactly right. You see an indication of that in your example there. I see it a lot in our area too.....people will say the zip codes we invest in are 'bad' or 'high crime.' We've done very well in them for years, through up and down markets. 

What I see is that some say an area is 'bad'.....relative to their upper middle class subdivision. True, I probably would not live in 78207, but it's still a fine place to invest !

I have properties in CO, WI, MN and MO.  Colorado is by far the best.  Very low taxes.  We pay $1300 per year on a county assessed value of 180k.  Evictions 2-3 weeks.  Courts seem to favor prepared landlords.  Plus Colorado economy is booming.

WI is not bad and getting better.  Taxes in MN, WI and MO are around the same around 2% of appraised value.  My MN evictions take around 4-6 weeks depending on court dates.  MN seems to be turning more blue and making life harder for business owners.  Landlords are no exception.

I hate St. Louis MO metro with a passion and can't wait to pull out of there entirely.  Its very landlord unfriendly.  I have to pay sewer and trash directly as they don't accept tenant payments. (just time consuming).  Each of there thousand little cities are like mini fiefdoms.  Renovations take forever due to a lengthy permitting process that has no accountability.  Entitlement within the city is rampant.  Even my wholesaler there who has done 3600 flips in 4 states is pulling out of that market due to the BS.  He nearly got arrested for trying to get permits on a renovation.

Washington state is mostly LL friendly.  The Washington Landlord Assoc is an active, engaged organization that is involved in lobbying tenant/Landord issues fairly and with a balanced approach. 

Best case scenario I have done evictions in 20 days (uncontested, moved out prior to Sherriff showing up). While each county operates procedurally a bit different, I understand King County and Seattle proper are NOT LL friendly.  I have no intention of going there. 

I can do a 'no cause' termination of tenancy with a mere '20 Day Notice'.  This has been very helpful when you don't have evidence to evict but need to move on.  

Small claims court has been our friend as well.  3 of 4 counties we operate in require mediation prior to meeting before the judge (informal, sometimes with a court approved onsite mediator sometimes just us and the tenant).  Many folks are glad to work something out in the hallway rather than stand before a judge. 

@Jason Miller

St Louis, MO, was a nightmare? I had a fourplex there in 63109 (St Louis City). Buying that place in 2005 was my foray into landlording and a lot went wrong. My biggest weakness with getting back into REI is to stop being jaded from the experience of owning just that one place. Occupancy permits, tenants that couldn't qualify even for a checking accounts, late rents, paying people to leave, and drug users on the same was a nightmare. Where are your properties there in MO? Are you referring to St. Charles County at all?

@Jason Miller  Im very suprised I would consider 63109 a B neighborhood. That has done very well for me. Do you still have your property in 63109 i would love to look into buying it if you do. Did you you a management co or did you manage it yourself?