All Forum Posts by: Sam Leon

I normally look for investment properties but recently I was intrigued by a FSBO property as a primary home, not as a rental.

The owner is hesitant and not even sure he wants to sell, or if he sells, when.  It is priced reasonably.

What is the best way to approach this?  If a purchase contract is not possible at this moment, are there other ways to at least have some sort of an agreement in the event he decides to sell in the future, some sort of a "Buyer's right of first refusal to purchase" for a set price and duration that may work to my advantage and still give the seller the freedom to not sell?

Pros and cons?

get the keys back from your brother lol.

I am more inclined to find the best qualified tenant, not necessarily the first.  So for me I don't want to ink a lease ASAP with first qualified.

In addition, first qualified may not mean soonest to move in.  It could be October 1 and first to sign can be someone looking to start a lease on Dec 1 because their current lease ends then.  The next one knocking could be ready to move in much sooner.

I have tried the open house style and while it was interesting, there are some drawbacks.  Three parties may show up five minutes apart and you end up not having enough one on one time to get a good feel on some of the potential applicants.  Some questions are awkward to ask with multiple parties present such as "why are you looking to move?" or "oh yes I know the place you are staying at now, how much is your rent?"

So if I have an open house style I will ask another person to be present with me to do the showing.

Open house is also a challenge if it's a multi family or SFR with limited parking space. A six unit building with seven parking spaces with everyone home plus your vehicle could mean a visitor may not find street parking and the only thing they may remember is "the place we had to double parked".

I have done the open house style with a twist.  I told the visitors it's an "viewing day" and I schedule them 30 minutes apart.  I let them know if they arrive late or early I may not be able to show as I "go in and out a lot".

I take my time with them and ask all my questions.

I do not give everyone an application form.  I do not spread 50 application form on a table or counter.  I let them know I will be showing a few more days and it's not first come first served but I  looking for best qualified.

I only put one copy of the application form in the drawer, if they would like to apply I show them the form (...this is my last copy) and tell them I will send them an electronic copy.

I usually don't pay much attention to the MMM properties on zillow but recently saw a MMM listing that:

At a good location.

Good pictures.

Priced reasonably in a really hot neighborhood where everyone was looking to buy.

Actually I was so intrigued I am thinking of it as a future home and not an investment.

Seller is not seem too motivated as I contacted three times stating I am not an agent, not a wholesaler or flipper but genuinely interested in the property as a home and requested a viewing.  After three tries I got a email reply "what do you want?"  lol.

Need advise on how to gauge their motivation to sell if they won't even provide a phone number for some live interaction.  Just emails with long delays.

Should I insist on a viewing now?

I am familiar with the neighborhood and think the price is reasonable.

Would sending in an cash offer 10% below asking without seeing it but put in a "property preview contingency with say a 48 hour buyer kick-out" be a good way to tell one way or another the sellers true motivation?

So today I was doing maintenance at one of my rentals, I opened the closet to access the central AC handler unit to change the filter and after I opened the closet door,  I had to rearrange a few things to clear the space to the left so I can have a clear path to the filter slot.

As I moved some clothes to the right my hand touched what appeared to be a human head on the rack.

I quickly jumped back and in my mind was a scene in Silence of the Lambs...I tripped on myself and fell on my butt.

I was so scared LOL.

Glad the tenant wasn't there.

I am having a real frustrating time dealing with the banks who's servicing my loans on two of my properties as it pertains to insurances.

Property A

The bank insists of paying insurance (regular, windstorm and flood) through an escrow.  So every year, we receive a notice of cancellation from the insurance carrier of "imminent policy cancellation" due to non-payment, followed by the bank saying they received a cancellation notice from the insurance carrier that if I fail to carry the necessary insurance they would have to take action...OK what action?  They are the one not paying on time.  They have the money in escrow.  They insisted on paying.  Now they blame me for not paying on time causing the insurance carrier to threaten to cancel?  Now if this is just one time, something slipped through the crack, OK.  But this is now three years in a row.  I can't find a live person on the other hand able to help, other than transferring me to voice messages of someone...

Property B

Different bank. Again insurance related. a few years ago FEMA was doing updates to their flood risk assessment maps. Down here in South Florida we are required by the banks to carry flood insurance in accordance to the flood risk assessment of your property. Usually how it is done is there is a paper map (or online map) for the region published by FEMA, showing the different areas with flood risk designations A, B, etc...and the insurance rates depend on your flood risk assessment. At the time I was in zone A, and required by the bank to carry flood insurance. However, if you believe FEMA's risk assessment is in error, you can submit evidence to FEMA and have them do an individual evaluation of your property. So I sent in a survey and elevation certificate, because this property is raised an additional 18" higher than surrounding houses, it is at a lower risk. FEMA did an evaluation and gave me an official letter of map amendment determination, and reclassify it to zone X, which DOES NOT REQUIRE flood insurance. I sent the letter to my insurance agent, who quoted me a new rate, my flood insurance went from $2000 to $400. I also called the bank, who at the time told me to send in the official letter. I told them since flood insurance is no longer required, I would like to remove the flood insurance from the escrow. In other words, I want them to stop dealing with my flood insurance since it's no longer required. I want to then handle the insurance myself, whether I decide to carry it or not. I eventually decided to carry the flood insurance since it came down so much.

However, every year, I get a letter from the bank saying I am required to carry flood insurance (in accordance to the 50 year old paper map someone there uses), and they need to be handling the flood insurance. Every year I send in the FEMA letter telling them no I don't need to carry flood insurance...but actually I DO have flood insurance, but you are not handling it for me like regular and windstorm. Every year there is this big confusion, gets resolved and the next year, things start again.

I know I am venting, but is there a department in the banks' loan division that is equipped to deal with these kinds of matter so that it doesn't happen every year?

It's a bit more complex than that.

It depends on the fixture, the dimmer and the bulb.  In many cases they don't play well together...which is the reason for my questions.

Some lamps manufacturers may boast that their dimmable LED lighting can be controlled using a standard traditional dimmer, in reality it is likely to be true only when some very narrow criteria are met. Standard dimmers will be underloaded in most LED applications, exacerbating flickering and strobing effects, which, in turn, can drastically shorten lamp life. Standard dimmers are also not equipped to exploit the full brightness range, resulting in a disappointing experience.

The fundamental issue is there isn't a consistent solution.

One can replace all fixtures with damnable LEDs, that may take care of 40% of the lights with dimmers.  The other 60% are lights that buzz, flicker or the min/max dim range is uselessly narrow, or fixtures with special bulb sockets that dimmable LED bulbs are not readily available.  Usually on full brightest on dimmable LED bulbs is when you get maximum flicker or buzz.

Fellow landlords, I am curious if you are doing anything about lighting fixtures inside your rental properties that use incandescent bulbs wired to traditional dimmers.

In my lease agreement, tenants are responsible to replace light bulbs as they go out.

Some of them buy and put in LED bulbs, and when they slide the dimmer switch up and down, they either don't dim, or flicker.  That's because these LED bulbs (or CFL) don't pair well with traditional dimmers.  So they complain...why can't I use LEDs?

I have a number of fixtures with this issue:

(1) Traditional bedroom ceiling light fixtures;

(2) Kitchen pendant lights;

(3) Banks of recessed lights;

(4) Ceiling fans with a light kit

Any suggestions?  Seems I have these options:

(A) Do nothing, keep insisting on incandescent bulbs if they want to use those fixtures.

(B) Investigate into replacing with LED compatible dimmers.  This is most likely going to be costly not only because I may not have a neutral conductor in the wall switch box, but also I may have a hard time finding replacements for the specific ceiling fan/light single gang combo switch that pair with the fan.

(C) Ask the tenant to buy LED bulbs that work with traditional dimmers, and live with the flickering or buzzing that may or may not occur at various light levels.

(D) Change out the dimmer switch to just ON/OFF switch.  No more dimming, no more problems.

(E) Give the tenant the option to use incandescent bulbs as originally intended, or you will solve the problem permanently and go with option (D).

Thoughts?

Probably not worth the effort.

Even if the previous owner had a move in check list at the time she moved in two years ago, the list may not be comprehensive, and any dispute would require you, the tenant, and the previous owner to reconcile...you are most likely dealing with two unwilling party.

There is also the question whether an existing damage to a property, regardless of whether tenant occupied or not, is really between you and the last owner and or the current tenant.  If I see a big hole in the wall during my inspection of the property, I most likely would make a note of it and request a credit from the previous owner, I don't really care if that damage was caused by whom and when.  Also, if I am inspecting a tenant occupied property, I most likely, unless if the previous owner objects, I ask the tenant to give me a list of known issues and desirable improvements, written or verbal.

Good luck.

Michael, thanks for the helpful reply.

I do know that receipts are important, and knew that I would have to document amounts for claims.

The problem is timing.  As you know, once the hurricane is over, everyone is looking to do repairs.  Contractors are in high demand and most of them are telling me no receipts.  Every smaller "mom and pop" type contractors said the same thing.  The bigger ones, are basically not answering their phones, or tell you they will call you back, but they have a big back log, and someone will get back in a week or so.

So I have a huge tree branch sitting on half of my roof, with leaves and smaller branches so thick I can't even find the branch that poked through the roof, and the other side of the branch was sitting on an overhead high voltage power line, strained to the max.  Calling Florida Power and Light, told me I am caller number 475, please wait patiently, and my cell phone had 30% battery left, with no way to recharge.  I had no way to report a power line about to snap.  Not an excuse, but the reality the kind of chaos, confusion, and exploitation that happens after a hurricane.

So, when I end up getting someone who's available, with a chainsaw, able to take action, who's offering to help clear the debris off the roof, who's driving a truck "BLT Trees and Landscaping" but said it will be all cash, I yielded.  The only concession I got from him was (1) He and all crew members will sign a hold harmless release of waiver of liability form in case any of them got injured, and (2) cash means I will write him a check in his personal name.

So I do have cancelled checks to individual names, even on the check I wrote a reference "debris clean up @ address".  But that's hardly evidence of work performed.

I did get a legit roofer to come do the repairs on the roof, and I was able to get a paid in full receipt from him after about 30 calls and texts.  The other guys will not even entertain the idea "sorry, can't do that" - CLICK.

Normally I would make sure I get receipts for all repairs, but after the adjuster told me I am under the deductable and will not be reimbursed a penny, I didn't worry about crossing all the tees and dotting all the "I"s.  I still documented all amounts for tax purposes but was more relaxed on the provenances.  I even negotiated a multi-stage debris cleanup with another contractor for a lump sum to handle three other properties in one shot, and had to slice it up later on on tax filings.