All Forum Posts by: Patricia Steiner

It's not so much that you need 'additional' insurance - as you need the RIGHT insurance.  Vacation Rentals are classified as a business and require commercial insurance.  Without that policy, as soon as a claim is made, it would be denied and the coverage cancelled.  The industries take on vacation rental insurance is: 'the risks associated with renting out a property for use as a vacation rental, such as property damage and liability for injuries to guests, are higher."  And, in most states, you will be required to have a vacation rental license with the muncipality and/or state.  In Florida, both are required.  And, as far as those host insurance policies you referenced, they are not insurance policies:  "The HLI program does not insure Hosts for damage or loss to their own property or Accommodation. For damage to a Host’s property, learn about Airbnb’s Host damage protection program. Host damage protection isn’t an insurance policy." (End, source: AirBNB)

Contact a couple of insurance brokers who offer vacation rental policies and get a policy that protects your investment and minimizes your risk.  Building wealth means nothing if you don't preserve it.  Learn more...

Let's start here:  The #1 reason why landlords fail is - failure to manage to the lease. So unless your lease is for 'entertainment value only," you need to enforce it.  The tenants not only violated their lease but they have put you at risk - as a commercial insurance policy is required for a vacation rental as is licensing with the municipality and state (in Florida).  If a 'guest' gets hurt while at your property, you're totally exposed.  Send the tenants a Notice To Quit and let them know that you are prepared to move forward with eviction.  

And, 'share in the profits?"  Really?  If this is legal/viable in your market, furnish the place, get your licensing in place as well as proper insurance, and run your own vacation rental business.  The thought of partnering with people who demonstrated no regard for you - while you hold the greater risk - makes no sense whatsoever.

You're running a business and your customer is running a business inside yours...not cool, not legal, not wealth building or preserving. Glad you discovered what they were up to - and now it's your turn to let them know that they messed with the wrong guy.  Take your trash to the curb and leave it there...

There's a lot wrong here...

Under-Contract. You're still under contract so no - the agent cannot list the property for sale. It's pending. This is a violation of not only real estate law but the MLS professional practices. Resolution: Your realtor needs to get a back-bone and advocate for you - something that is obviously not happening. Bypass your realtor and call his/her broker.  Have the broker file a complaint with the MLS and Realtor's Association over this violation. The MLS responds quickly. The Broker can also call the listing agent and advise that further action will be taken if not corrected.

Blocking Your Realtor.  No telling what led to this. If your realtor has been incompetent, dishonest, or abusive (all which I have encountered myself), it still is not permissible; there are professional standards of cooperation that torment all of us when dealing with those who can be challenging.  If the listing agent cannot work with your realtor, she should have contacted the broker and ask the broker to step in and take over the transaction.  It does sound to me like your realtor lost control of the buyer side of the transaction which has led the listing agent to believe that you are unwilling/unable to close.  Still - only the buyer can cancel a transaction if in compliance.  

Financing/Appraiser.  There are two issues at hand. I'm sure you gave a preapproval letter to the listing agent with your contract and they relied on that preapproval as evidence that you had financing in place.  You went through the appraisal process - and then change banks.  As a Broker, that tells me that you did not qualify for financing.  Appraisal shopping is a red flag event.  So, here's a question for you:  how was the change in banks/financing shared with the listing agent?  Did your realtor communicate why you were doing it?  Did you get a second pre-approval letter?  Did your 'new' bank advise that they could meet the loan commitment deadline? And, she's not denying access - she's just not investing her time in something that looks like a long shot. Appraisers pick-up keys all the time; they schedule through the listing agent - not you.

Soooo - what a mess.  Always fun when everyone is to blame.  My recommendation is to call your realtor's broker and have the broker intervene NOW.  Your realtor should have done it - even if she sees you closing as a long shot too.  You need a second preapproval letter to be taken seriously.  Miss one contractual deadline and it's game over with the seller retaining your escrow.  Call the Broker now. Call your Lender next.  Time is of the essence so get on with it.  

Geez...

I bet your lease states that either party can cancel with 60-days notice, right?  Since you've reached out to them multiple times with no response, I would send them - by email and mail with delivery confirmation required - a notice that you are cancelling the lease at lease end. I would cite that their failure to respond as the reason for the termination and provide a final walk-through date for inspecting the property/processing the return of their security deposit.  While they've been a good tenant, there is no excuse for holding you hostage.  I find often times that this happens when tenants are attempting to buy a home and are stringing out the landlord until they determine if they qualify or not.  Once the tenants know that you are not providing a safety net at your financial detriment, you will more than likely hear from them.  

Protect your cash flow by letting your tenants know that no response is a response and that the lease terminates at the end of the lease term.

Hope this helps...

A rate lock is a type of insurance sold by lenders to borrowers.  It allows the lender to 'match' funds to that rate.  However, if anything changes on your application or the rate lock period is exceeded, the lender does not have to honor the lock agreement.  Is a rate lock legally binding?  Unfortunately most lenders do not have a contract in place with the borrower for the lock so those few lenders who pull this stunt leave borrowers with only one recourse:  walk.  

If it were me, I would skip the lender and work my way up from his manager and higher - as long as you're in complete compliance.  Stay calm - but make it known that 'this is not the cruise you signed up for' and that you expected they would meet their commitments as you have met yours. There will be a lot of borrowers who will just accept this ploy and move on - and there will be those who don't and have the lock honored.  Be one of the latter.  Again, stay calm while communicating your expectation that the lender will act with integrity and honor your lock agreement.

Fingers crossed for you...(and congrats on your soon-to-be acquisition).

For those investors who are looking to acquire and occupy a 2-4 unit MF property, it's going to be a lot easier to do so.  Look at this:

"In a significant policy change, Fannie Mae has announced that, starting from the weekend after November 18, 2023, it will accept 5% down payments for owner-occupied 2-, 3-, and 4-unit homes. This marks a departure from the previous multifamily financing requirement of 15-25% down payments for duplexes, triplexes, and four-plexes." (Source: The Mortgage Report)

Here's the link for more details: https://themortgagereports.com/107690/fannie-mae-introduces-...

Opportunities exist in every economic cycle...this is a great one for building and preserving wealth.

Best...

The tenant will need to abide by the terms of the current lease (the one that runs through 10.31.23).  But the lease has to terminate at the end of the lease.  If you have an auto renewal term that extends the lease to month-to-month is not terminated at end of lease, the tenant would be liable for one month rent upon notice.  Be careful that you read your lease and understand the provisions; again the lease ends upon termination of the lease.  Read/see the link below (and tap on the read more button under the poster's comments; the legal opinion follows it). Hope this helps...

https://www.avvo.com/legal-answers/if-yearly-lease-ends-on-d...

I don't recommend it. First, the real estate course and exam doesn't teach you anything regarding investing - and not much about real estate either. The knowledge comes from 'doing' - and mentoring - which takes experience, learning, and time. It is also not a cheap date to become a realtor as you will be required to join the local, state, and national realtor associations plus the MLS - and then pay desk fees to a brokerage firm. If your goal is to be an investor, focus on that and learn the business - which includes valuation, building codes/setbacks, landlord/tenant laws, market demand and returns, construction and rehab scheduling/costs. While you can study this, it's not the best way to learn. Get a mentor, take a part-time job with a subcontractor, flipper, handyman, more. And, save your money...you'll need money for not only acquisition by rehab/repairs and more. I was a real estate investor and wealth banker before I started my firm which is a private client investment firm. There is nothing in being a realtor that prepares you for jump starting an investment career. Focus on the goal. Going sideways just delays your progress and success. Just my opinion...you'll get lots more. Best.

@Liam Maher

No...unfortunately it is what it is.  A lot of money has been lost there - and more will be by investors who have been sold on it being 'up and coming' and more.  It isn't.  There are plenty of opportunities in our market and surrounding areas.  To do something just to do something isn't wealth building.  It's just stupid.  Bolt.  

Shopping appraisals is risky...and not recommended.  What you need is a copy of the appraisal that was already done on your home to see what comparable sales were used in calculating your valuation.  A sale in itself is not 'comparable.' Appraisers and Brokers go through a process that 'adjusts' the sale to make it comparable to - in this case - your home. There are a lot of factors besides those that you mentioned.  So start by asking for the appraisal.  See if all the sales in your market (defined as 1 mile radius), within the last 30 days, that are within a 10% square foot differential were included. If there are sales that you feel should have been included and were not, submit those for review.  Start there.  And, know this:  online valuations are not accurate. They have a standard deviation of 12% to WTF.  They are based on derivatives rather than sales that meet the appraisal standard.

Start by getting the appraisal.  As large as the difference is, it is unlikely that you will be able to get to the $200k mark.  It's still worth doing the work to find out.  Hope this helps.  (Frustrating isn't it!).