All Forum Posts by: Lynn McGeein

I just had this happen and my seller, the heir, after many frustrating appointments and phone calls, wrote a Notice of Error to whatever address the lender says to send notice of errors (might be on your statement), explaining that it was clearly paid off but never closed and recorded.  She had to then provide, again, the death certificate and proof she's the administrator of the estate (to 3 different departments within the bank), and then they finally closed the account and recorded the release.  It took several weeks, but only because she stayed on them and provided everything they requested asap.  It could have been much longer.  This was not Chase, but assuming it's the same run-around with most.  I believe a title resolution company could resolve it but your seller would need to provide the same information to them as well.  Something about Qualified Written Requests and Notice of Errors means the lender has to respond in a timely manner versus just calling in to customer service, where they can ignore you for longer than you can stay sane.

@Stephen Schoon if they have temporary housing during renovations and willing to pay new amounts, consider them like any other prospect. But allowing them to stay under current conditions or during renovations would concern me greatly unless they signed some sort of waiver, if that would even hold up if something happened. Most landlord tenant laws require working heat, hot water, windows that work etc., so make sure you’re covered there before allowing occupancy.

@Peter Morgan I’ve successfully sold occupied rental property recently but showing terms, specific hours and rules were worked out before listing. In my state, I think now tenant can just choose to send you a video and not allow showings or even professional photos/video. For some, seller gave them cash for keys to sell vacant. It depends on tenant preferences, so that’s first step.

Discuss pros and cons of both with your lender. We found cash-out refi on investment property carries a much higher interest rate, less LTV (I think 70-75% max), higher fees, and harder to find a lender than a cash-out refi on a primary home, so that is a factor as well. Also, in the last housing crisis, many banks froze HELOCs suddenly, so that is a consideration as many were counting on accessing it for either new investment or emergency funds but found they couldn't.

This is why your buyer needs a buyer's agent, so it might be a good idea for him to find a good one to work with, as agents working for the seller may not have the same incentive to make themselves available for a buyer's access, especially if they already have lots of activity without having to make time to show it, themselves. If he does have a buyer's agent and that agent is not showing to scheduled appointments, the buyer needs to resolve that asap, and you need to remember who that agent is so you know not to waste your time for anyone else using the same agent.  

If you're comfortable asking the listing agent to ask the seller to approve the installation of a contractor box and provide the code to you (not the buyer) -- as a licensed contractor, the seller may be fine allowing you access for an estimate -- that may work, although it would likely be up to you to ensure there was no issues at the showing (like seller says something was damaged while you were there), so you may not want that responsibility.  

We've found that cash-out refi on investment property is very difficult, first in finding a lender who actually does them, then in higher rates, costs, etc., for those that do.  We decided against it after running the numbers.

It is very possible that the last minute lender issues were that it required flood insurance, and the buyer couldn't qualify with the high flood insurance cost added for an AE flood zone, so check rates to see what they are as even if you're paying cash, if you sell down the road, you'd like to be able to sell to someone who needs a loan, or you limit your buyer pool.  

Moving forward, note that many MLS maps do have a flood map feature, or you can find it online, where you can see for yourself first if the structure lies within it or not. While I do miss some, I try to rule out when the home structure is actually within a flood zone, nearby issues like energy substations, railroad tracks, etc., if I don't know the area well.

I have a clause in my lease that pet damage is not considered normal wear and tear and they will be responsible for all damages that can reasonably be determined to be caused by a pet. I've had people try and tell me their child scratched the flooring or caused the urine stains/odor instead of their dog, trying to say it's "normal wear and tear."  I'm not a lawyer and I've never had it challenged in an itemized security deposit notice, so no idea if it would hold up, but it's worked for me.   

It's been a while, but our first few investment properties were bought from a HELOC of our primary residence. We would buy as a cash deal -- which also helped competitively plus we could buy things that wouldn't normally qualify for a standard loan -- fixed them up, took out a loan on the property, itself, or sold the home, then paid back the HELOC & started over. Never had to worry about where we stored our money between deals as it just went back to 0 balance on the line of credit. Worked really well. In a recession, banks do tend to freeze them or lower the limit, so read the fine print to know the rules you're working under, but as long as you understand them, it may be your best option.

If not a HELOC (we sold that house), we've discovered that any money we want to use for real estate within the next 2 years, including our emergency fund for our rentals, is better off in a higher interest savings account, even though right now it's almost no interest at all. In hindsight, we could have made a lot of folks rich letting them know when the stock market would tank because it seemed directly correlated to when we needed to pull out money from stock accounts for a purchase.

You'd need to analyze once you know the costs and rates involved as we were surprised at how high rates and fees were on cash-out refi on investment property and how few lenders we found that wanted to offer it.  We decided it wasn't worth moving forward with it.  Since you have so many properties, you may find more lenders willing to offer you better terms.  We were just looking on one property.