All Forum Posts by: Lynn Dee Murrow

@Joseph Abbott you should be able to do your tests online. I would find a Broker/Sponsor that is all online so it does not matter where you are. If its for your own investment purposes you should be fine.

Many attorneys do not feel the need to communicate unless something has happened in the case. Small issues often get bumped to the back of the line. I would call the attorneys office and ask two things:

1 - How do you typically communicate with your clients? I understand I am a very small client but this issue is a big deal - daily - in my life and I really need help quickly. 

2 - When should I expect an update on the status of the case, any letters of demand that have been sent or lawsuits that have been filed?

A demand letter should be sent before a lawsuit is filed.

I would also try reaching out to the contractor again and let them know you would really like to resolve this without a lawsuit, all he has to do is return your money which he is not entitled to keep without doing timely work.

Finally, are GC's licensed in your state? If so contact the license board. Contact the BBB with your complaint as well.

Hope this helps!

Has the new owner (you are now the lender) said why they stopped paying? You can ask them to sign the property back over to you instead of going through foreclosure that will ruin their credit. Then you can look into donating the land for a tax write off. Just a thought...

Your returns are typically higher if you use leverage and secure a loan on the property. If you have a mortgage on your own home and the other 2 rentals this will be loans 4 and 5 so you can still get Fannie Mae underwritten loans with excellent rates and terms. That allows you to save some of your capital for the next one!

@Kyle Myers so glad you are looking into insurance rather than an LLC. An LLC does not provide the same kind of asset protection that a good insurance policy does. You definitely want an umbrella policy that covers your personal home, cars, and all your investment property. If, by chance, you are a veteran or active military contact USAA for quotes. Otherwise, I recommend a local insurance broker so they can shop your policy around for the best terms and rates.

The amount of your policy depends on your wealthy and how much liquid assets you have that would be attractive to an attorney representing someone who wants to sue you. For many people a $2 million dollar umbrella policy is enough, but a good insurance broker can walk you through the process of determining this amount. Now policies also cover landlord errors and omissions as well, like forgetting to send the final accounting for non refunded deposits within the prescribed amount of time etc. Inquire about the cost of this coverage as well.

If you are a responsible and responsive landlord it is unlikely you will get sued. It is more likely that you will be involved in a car accident that results in a law suit, so make sure your auto insurance coverage is sufficient well.

I am not associated with any insurance companies. I use a local Broker and usually end up with Travelers but sometimes Safeco has lower rates, so I move from time to time. If you have trouble finding a broker let me know. I can see if my Broker writes policies in Colorado or can refer someone for you,

Finally, 5 rental properties!!! Stop and celebrate for a moment! You are taking action! Good for you!

If the power is not on how are they powering the electronics? Did you see a vehicle parked in front or in back of the property? If the squatter comes and goes you can change the locks and maybe add an inexpensive alarm or Arlo cameras to the property during rehab.

How did the interior look? Without water, if a squatter is living there they usually use a room as a bathroom until it smells so bad they have to move on.

Even though you are buying the property "as is" you should have a sellers disclosure of property condition. If it was a rental, or it is a wholesale deal this will be of little value however. You can make the availability of all utilities during inspections a part of your offer as well if you are concerned. Also, make sure you do not skip any steps in the process and get title insurance.

You have to determine if it is fear, or a real gut feeling that something just is not right about the property...if its the later, move on. 

You certainly can invest while working. That is how most investors get started! 

You may find opportunities right there on the islands, but consider mainland investments as well. You will need to find a realtor or wholesaler who works with investors and has a rehab team, but there are many opportunities in cities across the country. Phoenix and Detroit of all places come to mind. get educated on the business, especially property and market evaluation, rehab and how to determine your scope of work, and loan options for investors like hard money for distressed properties.

Good luck!

The realtor is correct that only a small fraction of the total units in Houston were affected by the storm. Houston is the 4th largest city in the US. 14,852 units in Houston were sustained storm damage, representing 210 properties, out of a total inventory of 638,603 which is 2.3% of the market. Effective average rent has increased by $16/unit, now at $1,000/unit (remember, averages are meaningless - submarkets determine actual rents) and the effective average rate is now $1.13/sq ft.

That information can help you determine where your offer fits in.

The real opportunity lies with the flooded properties without insurance that may need to be sold in order to be recovered. You will need a good local team to lead you through that process if you choose to buy a flood damaged property and the risk is certainly not for the faint of heart. 

The other unknown in the Houston market is the future cost of mandatory flood insurance. The maps were due for an update next month, but my understanding is this has been delayed for as much as 2 years as they redraw flood zones. Obviously, when these new zones come out it will affect NOI and thus values.

Hope this helps! Have you considered markets like Phoenix? Its an easy hop from San Jose.

I forgot to add, make sure you get an umbrella policy. They are inexpensive and will cover your personal residence, rental properties, cars etc. with an additional layer of personal liability insurance.

You should buy a policy that goes into effect the day OF closing, not before. Usually, if you tell them you are buying a property they will work with whoever is handling closing to provide all docs and collect funds at closing. The important thing is to make sure you have insurance the day of closing and no later so the property is covered the whole time you own it. Be sure to walk the property, or get someone to take a look at the property if you are investing far from where you live or work, just before closing to make sure nothing has happened just before close. You do not want to find out their was a fire or flood or vandalism after you close on the property!

Enjoy your new rental property!