All Forum Posts by: Brandon M.

Of course I didn't accept partial rent, but the more I think about it the more mad I get. It is definitely borderline criminal, deceitful, taking advantage of my parents who didn't know the difference. 

I can certainly evict but again, the property barely breaks even if that so I am trying to avoid missing out on rent for 4-6 week while I evict, plus the eviction costs (especially since I will have to pay someone to do it all for me, appear in court, etc), plus any missed rents while I get it rented up again. 

That is why I am torn, I am pissed at him but I NEED to have rent coming in so I don't have to come out of pocket for anything with this house. 

backstory: bought a house in Charlotte, NC with 100% financing back in 2006, lived in it for 3+ years, became rental after that. No equity so can't sell. Property became vacant a few months ago, I now live in Clearwater, FL, have managed it myself from afar. 

Between my partner and I we manage more than 150 properties so I figured I could just manage another one from far away. I can do my own background check and lease and online rent collection. I had my parents post a for rent sign and I fielded all the calls. Found someone who wanted it, he met them at the house to give deposit to hold the house. Still didn't have lease in place. While there he asked to have access early so he could paint, someone could just meet him later that day to lock behind him. He was a nice guy and my parents didn't know any better, and didn't ask me, just told me after the fact. 

Long story short finally got lease, took forever to get money to start rent. I'm in town for the holiday and plan on meeting him there to get fully paid and give him the keys. When I get there he hands me keys and tells me he has already changed the locks, yesterday so he says. No one gave him a key, turns out he used a universal garage door opener when he painted to give himself access before the lease was ever signed. That was a month ago! I was astonished but didn't mention it in person yesterday, I'm not confrontational and he is much bigger than me. Basically he has had access for the last month even though I never permitted it and he didn't fully pay until last week. 

What do I do now? (Besides never let my parents act as my PM again). I don't want to evict, costs money plus missed rent. I barely break even if that ($850 PITI payment, $80 quarterly HOA, $1000 rent). He has been very elusive and slow at responding and has already lied about rent check being mailed when it really wasn't. Do you just rip him a new one over the phone and then go with ZERO tolerance from here on out? No leniency on late payments and threaten eviction if payment is even one day late?

Let this be a lesson to all of you who try to manage property from out of state, you might save money on the front end but risk headaches and losses and costs on the back end. 

Would love to hear some opinions on what to do from here. 

@Matthew Buckley - welcome to the site and congrats on passing the exam.

My partner @Dan DeMott is in your neck of the woods over in West Palm Beach/Boynton Beach/Delray Beach area, and I am on the other side of the state from you in Clearwater. Between he and I we manage more than 150 properties and continue to grow daily, feel free to connect with either of us with any questions or anything you think we can help with. 

I used Real Estate Express to get my license here in FL, I liked the format and found it easy to understand and learn what was needed to pass the test. They were pretty helpful with any questions/issues I had as well. 

But I think like any education, a school is used to teach the basics/foundation but you can't beat the real life education of getting out and getting involved in the trade. 

 Good tenants = pay rent on time. Unfortunately just because they are nice people doesn't make them GOOD tenants. I think you go to the sister and tell her " no pay no stay". You can emphasize with the situation but you HAVE to run it like a business. 

@Daniel Vazquez - I don't mean this to be offensive but good real estate deals don't just grow on trees and aren't just advertised out there by some company. There are opportunities to buy real estate with 0 of your own money in the deal, but it takes a lot of work, the right deal, the right investors, the right situation for the seller, etc. If you can convince friends/family/investors to loan you money at a certain percentage rate, you could leverage that money to buy real estate, pay them back first, and then keep the rest of the profits for yourself. Again, the numbers have to work on the deal. 

Long story short, the best deals you hear about on here someone was in the right place at the right time, talked to the right seller at the exact time they decided to take action. You can't just go to a website to find 0 money down deals. 

You used to be able to buy real estate with 0 down much easier......in the mid-2000s. They called those 80/20 loans, one bank loans you 80% for 1st lien position and another loans you 20% for 2nd lien position at a higher rate. These loans were the reason we hit the real estate bubble we did, property values did not just keep going up and up and a lot of those houses are now hitting the county foreclosures every day. Ask anyone who bought a property during that time (like me), most of them are upside down and/or had to short sale/give the property back to the bank. 

@Account Closed I am not looking to brag. I realize I am fortunate I stumbled upon this owner at the exact right time and found a good deal. Part of being fortunate though is being out there, looking, talking to people, because eventually you will talk to the right person at the exact right time right when they were thinking of selling. 

In terms of self-storage vs residential there isn't a ton of difference. The lease is typically a month to month instead of for a year, using a different lease style, the main difference is you will have to learn the laws for eviction for non-payment for self-storage in your state. You have to give them a certain number of days notice, you can put your own lock over their unit so they can't access, then you have to advertise an auction and pay an auctioneer to come out and auction off their stuff if they don't satisfy their debts. Other than that you still have to deal with tenants who always have excuses for being late, etc, same as in residential. Just no toilets that can clog or the such that goes along with residential. 

@Jason Borowy - if it is a large bank, Bank of America, Wells Fargo, etc, then no, you have a better chance of winning the lottery. They don't want to sell off houses one by one, they will sell them by the thousands as part of a package to a large institutional buyer. You won't be able to get through to the person managing that property. 

If you are fortunate enough to be looking at a property being foreclosed on by a smaller community bank, then maybe. You will just have to reach out to the CFO or asset manager and see if you can speak to them directly. Some are easier to reach than others. You could always go to their office and see if you can meet them face to face. I have had some success in the past dealing with smaller lenders directly. 

Just depends on what kind of bank you are dealing with. 

@Gary Landon - to answer your original question, what is an REO property?

REO stands for 'real estate owned'. It is the term used for property that a bank has foreclosed on/taken back from a borrower due to non-payment, etc. Once it is an REO property the bank has completed the foreclosure process and now the bank is the owner of the home.

Now to respond to the rest of your email: Unfortunately depending on the bank they might be irrational to the price they try to sell the house at. You have an REO manager sitting in the home office of the bank, New York, Chicago, somewhere NOT close to Edgewood, NM. Chances are they have never been to the area, have never seen the house, and don't really know what the house is TRULY worth. They just know what they were owed on the house and they put it out for sale. Even if you made an offer a lot of times they already have a set counter amount to respond back to. Their counter usually isn't based on anything except internal rules. Eventually after a certain period of time if the property doesn't sell they are allowed to reduce the price. Not to what the house is truly worth, but by a percentage based on some internal parameters. This can keep going and going until someone either is willing to pay what the bank is asking or until they reduce the price to the true value.

Long story short, when dealing with some of the larger banks, there is no common sense to determine what they are doing. 

Now, if you are fortunate enough to be dealing with a smaller bank, like a community bank just in your area, then you stand a better chance of reaching someone in charge of selling that property off. 

Hope that clarifies your situation some. 

Oh Jamie is correct, Hyde Park is one of the nicest neighborhoods in the area, but you will just pay a pretty penny for anything down there. You are looking at $150/SF for the lower end stuff, up to $300-400/SF or more for a lot of the nicer single family bungalows. 

Just depends on your price range though.