All Forum Posts by: Mitch Coluzzi

@Rebecca B.  send it certified with tracking and also try to get them to sign / date a copy.  You are 100% covered then...   If they are able to pay, they will.    In the interim, research your next step.

I am leaving the office in about 60 mins to go serve a notice,  stopping at the post office then heading to the property...  if they are not home I will tape it to their door.   In my experience, one of the other tenants finds the notice on the door and realizes the "responsible" party did not make the payment on time and immediately remits.

@Ryan Parnow because you do not charge late fees, or are ignorant of the process in Polk County, does not mean they cannot be charged in a Pay or Quit notice.   If you can find the interpretation anywhere in the code to the contrary, please provide it.  Until then... do not claim I provided misinformation.

To clarify:  Ryan's partially correct response; if you did NOT serve the tenant with a pay or quit notice the month prior to, you SHOULD not include it in this month's pay or quit.  Well... technically, you can but it will likely trigger a 30 day possession;  the total to cure the breach would ONLY be rent (and rent related fees) due this month.  Tenant will have 30 days to come up with the previous month's rent.

Time of year for evictions HAS come into play in the past for us.   Typically, it should not but it strongly depends on the magistrate.   We have also physically evicted someone on Christmas Eve day...  with 6" of snow on the ground.  So...

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Back to late fees:  if charging late fees, be intelligent about it.   If you are serving Pay or Quit on the 2nd (rent due on the FIRST) DO NOT INCLUDE late fees as they have not accrued yet.  If you are provide a grace period until the 6th (5 days), include them.  NOTE:  The 3 day timer does not begin until tenant has received the notice.

Late fees could vary by area and the judge whom reviews; neither in Iowa nor Indiana have I had any problems with including these on the Pay or Quit...  Typically, if you abide by the rules and charge REASONABLE fees on your pay or quit; the magistrate will not have a problem with FED moving forward.  Also, if the tenant pays rent-in-full but NOT the late fees, you still have to accept it (within the three pay period).   You are entitled to your late fees and should then serve a separate notice to cure breach of contract (along with a notice that next late rent will terminate lease agreement)

Late fees are a rent-related charge; for Polk County, the simple $12/day under $700 (max $60) vs $20/day over (max $100) will keep you protected.

To be technical, the FED does not include any monetary valuation and is for the possession of the property only.  The judgement which follows (after you have possession and have determined extent of damages, minus deposit etc) is where you would re-coop any unpaid balances.

The basic requirements for notice are (as I understand them):

1.  Include date, address, tenant name
2.  State amount of rent due
3.  If including late fees,  state amount of late fees
4.  Provide total which must be paid by end of period
5.  Make clear that the lease will terminate if tenant does not pay within expiration period

You can prompt Cozy to not accept paymend unless in full, I believe.  Upon serving notice I typically require certified funds with personal delivery or pickup (I typically try to pick up).  This gives you a chance to  discuss with them their obligations and also review condition of property.

Make sure you include the full amount due including late fees.  In Iowa it is a prorate over 5 days.  60 under 700 at a max of 12.00 per day and 100 over at a max of 20.00 per day.  Hopefully your lease note this stuff.

It needs to be served properly.  If they'll sign for receipt or response to an email, awesome. Irregardless though send it certified as well.

The first time you do an eviction, use an attorney and ask them to include you on the steps.  Never need one again and you'll have all the standard forms,  processes, etc

Jared - if you want them impounded the Sherriff can also do that. It is probably the most LEGAL way of handling it.  I believe they place an abandoned notice sticker on the vehicles giving parties 3 day notice. A city contracted towing service will then charge roughly $80.00 per impound.  About 45 days later they'll get auctioned off...  fun little cycle.  At any rate, I'm local to DSM, give me a call if you have any issues.

Hey Jacob - replied to you via PM.  We have a small group here in DSM that meets up regularly on the 3rd Thursday.

Talk soon,

Mitch

An experienced investor can tell if you are new or seasoned right off the bat.  Be frank about it; a green wholesaler eager to get in the trenches and find deals is better than a lazy seasoned wholesaler who right about now is complaining how hard it is to find deals...

To add value you need to do 5 things for me (they are simple, I promise):

1.  Be realistic throughout your calculations and appraisals.
2.   Analyze the basics of the property.   How much work does it need?
3.   Determine the value that property holds as-is and GET IT UNDER CONTRACT
4.   Educate the seller on how the transaction will progress (IE: you will be reassigning the contract, estimated closing time, etc)
5.    Answer your phone after you make contact with me.

If you did all of those things correctly, I do not care if this is your first or hundredth deal we would have a great relationship. 

@Ryan H  

I urge you have a REAL ESTATE attorney involved for this next transaction, or at minimum a qualified closing company whom is familiar to lease re-assignments / occupied transfers.  If the property you are purchasing has OCCUPANTS (rent-paying tenants, freeloaders, or otherwise) you absolutely must get the right documents in order before closing.  

1. Make sure you have a closing company / agent / attorney who can work together; with your best interest in mind.
2. Leases should be reviewed and scheduled to be reassigned the day of closing or as otherwise negotiated.       
3. A tenant estoppel certificate should be served to the current OCCUPANT(S) and reviewed as early as your diligence period.   This document will lay out what the current lease agreement is (verbal or otherwise) while protecting your interest going forward by stopping anything NOT specifically in writing when you take ownership. It will also reiterate deposits on file, rents paid or unpaid, special concessions such as lawn care included, etc.  This document is from TENANT to BUYER. 
4. Affidavits from the owner / property manager should be signed up to date of closing outlining (un)received rents.   This document builds on the tenant estoppel but is from SELLER to BUYER.

I wish you the best of luck on your next project; hopefully the mistakes on the first project have taught you some lessons!!!

I am a rather active investor (and contractor/broker) here in Des Moines.  I can tell you, it's a dog fight right now for property.  Skinny bones and fierce competition.

We have a small meetup in Des Moines with a wide range of experience.  It is the 3rd Thursday of every month at Caribou Coffee on Ingersoll.  Feel free to join us or PM me, I will get you added to the Google group if you'd like.

Simple answer: talk to your broker. It is inevitably their decision as they are the ones who answer for your actions.

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I am a broker: Due to liability I do not allow my agents to wholesale... if they buy a property off market and then sell it off market, different situation all together. If it crosses the MLS I get a piece, regardless of how quickly it moved.

Here's the problem with wholesaling:  perception.  

A net listing is not legal in many states.  It is also against most boards for an agent to accept direct compensation for brokering a sale.  Broker gets paid, compensates agent. Yes... go ahead and argue it is a reassignment, but at the base level you acted as a middleman for the transaction. At minimum you took a dollar value the seller was agreeable to, added your wholesale fee to it, and sold it for that gross requirement...  (AKA a net listing in the guise of a wholesale agreement)

If you put it on the MLS; you need a listing agreement (among other things). If you have a listing agreement, it is tied to your broker. If tied to your broker, I would expect they will want a cut as laid out in your agency agreement. Typically there is a minimum office fee per transaction.

Investors take what they can get, especially when the inventory is low.  It comes down to the all-mighty dollar...  can it be made?  Of course, there are different leagues of investors (available funds) and everyone has a different set of risk level/criteria.

For me, I stick to low-mid grade properties in up and coming neighborhoods.  I'll buy a package of 50k rehabs all day but pass on the 300k SFD in a stabilized area.

SFD typically sell for the highest dollar to owner occupiers.  So, just make sure when selling you are weighing exposure and timeframe against value and net.  Also... make sure you are up front if wholesaling;  trying to wrangle multiple sellers and convince a single buyer can be a real challenge.