All Forum Posts by: Ben Stout

Hello all,

I still have a mortgage I got in 2007 at 5.75%. For various reasons, it hasn't been a good idea in the past for me to refinance this property that I still owe $80,000 on.

Recently, I got something in the mail about a HARP refinance being offered to me even though this is an investment property. The offer is essentially to change interest rates from 5.75% to 5.125%. I pay no points, but it will cost me about $2800 which will be added to the loan.

The mortgage broker pushed it as a very good deal because I will get to "skip" two months of payments. I understand there is no real "skipping" escrowed bills, but I do like the idea from a cash-flow standpoint of not paying $1434 in payments.

It will take me a while to break even, about 24-48 months (depending on how you look at it.) My payments will go down $60 a month... from $717 to $667.

Is this something you'd jump on/be interested in? Why or why not? Thanks!

Ben

@Account Closed I have to agree with you Clint. The longer I've let it go on, the worse it's tended to get in the past. I've had a property manager end up costing me thousands and thousands of dollars in lost rent and property damage simply by failing to do their job and trying to take the easy route.

@Richard C. If the person is renewing a lease, sure. If it's the middle of the lease and they moved in with a certain size fridge, that's the deal. I don't change horses mid-stream and tiptoe through the tulips.

She sure did. I replaced it because I'd already driven so far and already bought all the supplies. Needless to say, I was not happy. I don't like setting bad precedents, but feel like I was kind of given no choice.

Being a long-distance landlord is definitely not for the faint of heart!

@Colleen F. I have had these problems too. The last straw for me was when they complained that there was serious floor damage and the tenant demanded a new floor because of a safety hazard. After I drove to the house with my truck loaded up with supplies to repair a floor and wasted a ton of money on gas, I find that a few peel and stick tiles had been damaged by the tenant. He of course wanted a new floor... and they were just parroting what he'd said.

Funnily enough, I called the Home Depot tool rental and came to the conclusion that the floor roller recommendation is probably an upselling technique.. along with the Allure floor cleaner.

The tool rental guy said "I've had that in my rental houses for 4 years and it looks great. I never rented a roller... I think it's a waste of time and money."

It's funny, but it seems over time that property managers seem to forget who hired them. It's as if they feel that the tenant is paying them. While maybe they are--albeit indirectly... I've found that some managers' visions become very myopic when it comes to what are reasonable requests and what are not. Their only goal becomes pacifying tenants.

I recently had to fire a property manager and hire a new one after I began getting so many absurd emails and queries that I had to stop it. First a manager informed me that I needed to purchase a larger refrigerator or the tenant was sure to move out. Then it was that if I had a property appraisal conducted without 5 days' notice, a tenant would get upset and move out. They seem to begin walking on eggshells with tenants over time... which, in my experience, almost always leads to 1.) absurd requests and 2.) decreased leverage on the part of the landlord (which can often be disastrous and costly.)

After the manager (who manages 500+ units) told me that my tenants had more rights than I in terms of my property, I had to hire someone else. I couldn't deal with it anymore... I'm sure next I would have gotten a frantic email demanding that I buy new clothes and/or provide Wal-Mart gift cards for tenants because I failed to provide a washer and dryer. The next tenant would clog the toilet and then demand that I be on the hook to repair the plumbing because of my failure to provide housing within close proximity to healthy food.

Have you ever had something similar happen with your manager(s)?

@Rob K. I'm smiling, but also frowning... because prices have gone too high too fast imho.

@Jeff Johnson There's added value there because you know he'll stick around because he feels he's getting a good deal. As long as the grounds look good and his remaining rent is paid on time, $90/week might be a good deal? If there are a lot of vacancies/cleaning... that would be a good rate. I've found many cleaning outfits now want a ton of money to clean a house after a vacancy.

@Jeff Johnson Cutting someone in on a percentage of gross seems like a partnership deal to me and is honestly something I wouldn't feel comfortable doing if I were doing everything except mowing grass and shoveling snow. I may be a bit more of a stickler, but I'd be much more inclined to give someone reduced rent or a flat rate for this kind of work. $350 for mowing and shoveling may be reasonable there, but it seems very high to me. Just my $.02.