All Forum Posts by: John Stevenson

To start, welcome to Bigger Pockets! Now on to your problem.

First, about releasing the original tenant. You will want to do a property inspection before he/she moves out to make sure that he/she did not cause any damage. Other than that, since there is an immediate backup tenant, it shouldn't be a problem.

Regarding sublease versus new lease. First, how does your original lease read? Does it allow for sub-letting? If not, then you will have to prepare a new lease and make all three parties sign it. I would also place a clause in the new lease stating that the original lease is null and void and is being replaced by this document.

If it does allows subleasing, then I would create a sublease agreement and attach it to the original lease. That way the original two tenants are bound by the original agreement and the new tenant can enter for the remainder of the term. Make sure that the new tenant gives you a security deposit too.

Hope that helps. Please let me know if you have any other questions.

I see that you are posting from Whitefish, Montana. Sometimes you just have to have a good source of properties. There are several internet based websites that focus on the foreclosure market.

I took a few minutes and did a brief search within our database. Here is what I found:

Whitefish, MO - Foreclosure listings: 10
Kalispell, MO - Foreclosure listings: 63
Flathead County, MO - Foreclosure listings: 95

I wish you the best of success in your property search.

While I managed a property management office, we used Yardi. It is a little pricey but it is an excellent management program. They have a new software set called Yardi Voyager. It is a fully integrated, web-based, enterprise management software system designed as an end-to-end, full-business solution. Because it runs over the internet, it should be compatible with your MAC. Here is their website: http://www.yardi.com/USHome/UsHome.aspx.

Whether you are getting a loan or buying with cash, it is not unreasonable to expect an appraisal. Especially if you are paying for it. If that is what it takes to make the deal happen, then I would think that the home owners shouldn't have a problem having an appraiser walk through the property.

What did you mean when the BPO agent said it could sell for $60k? Is that with the residence or as vacant land? Because if it is with the residence then either they are not adding any value to the building or the land is below your estimate.

Frankly it sounds like a real gamble. If you want to take the time to crunch the numbers, try to lock the owners into an agreement giving you a 15 or 30 due diligence period. Should give you enough time to count the costs.

Another option to get into real estate investing without having a lot of money is to look into subleasing.

If you rent or rent to own, make sure that the rental contract will allow you to sub-rent (this part is absolutely critical). This means that you can turn around and re-rent it out for more. Finding cheap rent helps. For example, you rent a house for $600. You then find someone to rent it for $675. Every month you make $75. Of course, if they do not pay the rent then you have to cough up the $600. So find a good tenant. Now, do not spend this money. Save it to invest again.

Dion DePaoli thank you very much for your clear post. I think you may have hit the nail on the head. It is important to understand what is meant by the Front End and Bank End Ratio and how lenders look at these numbers to determine loan qualifications.

It is a shame that many lenders fail to educate their applicants/consumers about lending practices and how credit card debts, student loans, car payments etc can affect their loan qualifications. If they had spent a little more time in education, perhaps this lending crisis would not have been so sever.

Well, from what I have read and understand, banks that are looking to sell properties in "bulk" require a minimum of 50 properties and they choose the properties. We are not the ones that set the definition of "Bulk" but rather it is the lending institution that has set the standards in this regard.

This is a common thread topic here in Bigger Pockets. Investors say that they do not need a real estate license to sell property and realtors who insist that those who participate in real estate without a license are breaking the law.

There is an interesting blog article here in Bigger Pockets that discusses the pros and cons of both side. Might want to check it out. http://www.biggerpockets.com/renewsblog/2010/02/24/should-you-get-your-real-estate-license-investors/

That being said, if you as an investor are absolutely sure that your actions are not in violation of your state licensing laws, then do what you think is best for you and your clients.

This is a good example why you should never buy a house sight unseen. You just never know what is inside. So many times we start with the numbers to see if it is a good deal but a good deal is never known until you see the property. Sounds like a real money pit!

Manuel Acuna and Steve Babiak, I will see what I can do about getting you all access to the spreadsheet.

If you are selling properties that you already own then that qualifies as a FSBO and you do not need a license. If you are selling other properties then you are acting as a real estate agent without a license and could be subject to severe penalties. If you are only passing along information or tips to your network then you would be acting as a bird dog and could rightfully ask for a small fee for this service. Just make sure you do not step over the line into the realm of a sales agent.