All Forum Posts by: Edward Kempen

First step.   check the existing lease for staying over requirements.   This  is a good clause to have in place if you don't already have one.   I put them in my leases so there is no confusion.   If neither party provides 30-day notice and no new lease is signed it automatically carries forward month to month under the terms of the existing lease.   Best to be explicit. 

Second step.   Know your state laws, you can probably Google them.   Most states have a landlord tenant guidebook that you should know.  This should have good info on how the courts would handle it. 

Third.  Communicate with your tenant.   You don't want a hostile vacancy either.  Best to end on good terms, they will exit with the place in a better condition for the next tenant.   you may find they they are Ok after all or were already planning to leave, but failed to give notice to you.

They may have just been testing you out as a new landlord,  sounds like they have experience with the system,  but doesn't necessarily mean they have it in for you.

Good luck!

in Michigan you need to apply for principal residence exemption and it only applies to the upcoming tax year.   Most title companies will include this documentation at the closing and explain to you how it works.

If you don't fill out and turn in the form you don't get the exemption.   For investors, they sometimes get the benefit when they buy a private residence, but it does expire with the following tax year.   The online form is linked below:

www.michigan.gov/documents/2368f_2605_7.pdf

Thanks for the reply Lance.    I spent 3 hours at city hall over 3 separate days researching the rules and correcting a few legal issues with how the appraisal was done.   Still waiting for final decision from bank on the financing piece.  

They previously planned to reject it.  Anyway, I suspect it will close soon and do have a good feeling about Warren as well after meeting the people.   I agree with your assessment.  

I also own a multi unit property in Rochester Hills, which has been good so far, and my primary home in Troy.  

Once this deal is closed and I have tenants in place.  I will be shopping for more.   I wish to get to 10 units within 2 years. 

Below is a sample closing document that I thought worked well.  If you take it to closing the Title Company Agent can witness it.   Michigan Law requires you notify the tenants where their security deposits are held.  Good Luck!

August 25, 2014

Cash Account Settlement on Sale of 1234 Main

-Credit to Buyer for partial month rent 

       (6 days/30 days * $2000)                                    $400.00

-Credit to Buyer for Security Deposits                      $2,850.00

-Sewer Bill(No Water) paid at closing                          $0.00

-Credit for one month trash bill to seller                  - $50.00

Total cash due to Buyer at closing from Seller  $3200.00

Will bring a cashier’s check to closing

We will have the meters read on 8-25-14.  You should contact them and put them in your name that day also.

We will notify the tenants of the change in ownership on Saturday 8-23-14. Please provide your information so we can give it to them.

They require Name, Address, Phone number and bank where the security deposits are to be held.

The undersigned agreed that this is a final settlement of all financial matters outside of the closing documents prepared by Title Company.

____________________________________________

Seller

_________________

Buyer

Witnessed:

______________________________

Title Company

Welcome Ben!

Have you decided what area?    I evaluated several properties in the Ypsilanti Ann Arbor corridor that would be good for student housing development and are still affordably priced.   Didn't buy any there yet though.  

I was hoping to start my daughters real estate investing career there while she was in school.

I'm under contract for a non-conforming 2-house property in Warren Michigan I plan to lease out.

As part of review, seems the city has excessive inspection requirements (every 2 years) and open-ended rules on the inspections.  I feel it was enough that my first lender ran away from financing the deal even though all other requirements were met.

Does anybody have experience with working with the City of Warren?  Are they reasonable?  Or is this an impending inspection and fee trap as the underwriter suggested? 

They all seem friendly and reasonable when I talk with them, but I haven't had that telling first inspection yet.  The rules are posted and clear ( yet vague ) on their website.

Any advice appreciated.

Ed

Welcome aboard Nate,   Sounds like you have are in the early stages of a path to success.   I'm from Troy and am in the middle of acquiring 2 more homes.   Already own a 4-unit in Rochester Hills.   Needed a little TLC.    My initial fix up is stabilizing on and have a good set of tenants.    I wouldn't mind investing in and around the UP in the future.  Love it.

Ed Kempen