All Forum Posts by: Nick M.

I received a letter in the mail today indicating that my tenants have filed for chapter 13 bankruptcy. The one year lease ends at the end of April but in previous discussions with tenants they indicated that they would like to continue to stay another year. They have not always paid on time but are up to date with rent for having been renting from me for two years. Does anyone know what it means ( for me ) that the tenant has filed for chapter 13? There is no outstanding debt they owe me. Can future rent payments be at risk or does this bankruptcy paperwork protect them from having to pay rent going forward? Should I try to get the out by the end of the term ( end of this month)? Any thoughts are greatly appreciated Thank you.

This house is in Westland. Never had to evict anyone but after 3 years now I have to learn this process as well...unfortunately

thank you @Bill Gulle ; before going to the attorney, I wanted to at least have some basic knowledge so I at least will understand the concepts. That is why I am asking here...hopefully I will lean this concept and will be better prepared for a discussion

I served the tenant a 7 day notice for non-payment (I am in Michigan) via First Class Mail. He received it the next day.

My question is: when does the 7 day period begin? when I put the notice in the mail or when the tenant received it?

Thank you.

thanks for everyone's participation and involvement in this tread ...but would someone please explain ho w a Leas option works? ...with some numbers. I curently charge $850 in rent and would like to sell the property at $60K.

Thanks,

Originally posted by Rob K:

Nick M. I have a bunch of land contracts in Michigan that I'm collecting on. The max you can charge in our state is 11%. You can not charge any higher. I'm getting 11% on all of mine.

As far as land contract vs. lease option, there are pluses and minuses to both. Rob Gillespie is right about being able to get someone out faster on a lease option. I have done both. If the land contract buyers default, the process is called forfeiture. There is a 90 day redemption period. It will take 4-5 months to get the people out. With a lease option, it will take 3-6 weeks.

Thanks, this is great info to know; sounds like a lease poption is a better approach....I just have to learn how to structure it and how it works. Would you give me an example of how it would work based on the numbers below?
Current rent: $850
Sale price I would like to get $60K

Forgive my ignorance on this subject but how would the rent count towards the sale price?
Thanks,

Ok, thanks to everyone who is talking me out of the land contract...sounds like a lot of risk.

It appears that the better solution is a Lease Option?

How does that work and how would it be set up in terms of price of the home? interest ? how much of monthly rent gets applied towards the price of the house, etc?

ANy thoughts would be greatly appreciated. Thank you

Thanks Rob for your comments. I just mentioned land contract because that is what I heard of when selling a house and I act as the lender. Not familiar with the lease option but it sounds like that might be a better idea.

How would such a deal be constructed?
Thanks,

A tenant is interested in buying the house he is renting from me via Land Contract. I have not done this before and would like some opinions on what to look for and how to set up the payment?

I am curious what common interest rates should be charged for a land contract - Credit is not the best, they cannot apply for a mortgage so I will finance. Is 6% too low, 9% too high? What about the price of the house? Should I charge a higher price because of the risk I am taking with selling it on Land Contract?

Should I be cautious and collect money for insurance and taxes any pay it myself of let them pay it and I will only collect interest and principal?

Any thoughts are appreciated...as you can see I am new to this and maybe some of these questions are trivial but trying to be on the safe and legal side.

Thanks in advance.

Thank you Brian; So, I was looking at the forms and I was hoping that I could use the 7 day notice for non payment of rent. However, the lease has expired on 1 January and my lease has a section for Holding Over where it states that holding over is unauthorized. I reaqlized that I do not have a clause for the lease automatically going to a month to month type contract.

That said, I am afraid that I may not be able to use the 7 day notice for non payment of rent since the lease is up. I suspect I may have to use the 30 day notice to regain possession of the property which takes longer.

Any good word of advice?