All Forum Posts by: Patricia Steiner

The inspection report only covers what was present on the day of inspection and it has a whole lot of disclaimers as to what they do and do not inspect.  For example:  "A home inspector's job is to complete a cursory assessment of a property. Only a plumber will be able to conduct a thorough gas line inspection and determine if it is safe for you and your family to proceed."  

Unfortunately, you have just encountered why real estate investing is not for wimps.  I would get a lot of bids and consider an insurance claim. Unless you can prove that the seller knew of the issue and failed to report it as a major deficiency, you would not have legal standing.  

Just is what it is...and we've all been somewhere in this so you're in good company.

You need to speak with a lender directly.  You're doing yourself wrong by not building a team of experts to direct you in creating/building your business - and you're planning around a problem that doesn't exist.  Call a bank lender as well as a mortgage broker or two.  Learn what they have to offer and let them share lending options with you.  

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You'll need clear title - and that's only possible if the property taxes are paid.  And, consider that if the seller is unable to pay the property taxes which are most likely at a very low basis since it was inherited, it's unlikely that he has done any needed maintenance either.  Sometimes what seems like a good deal is far from it.  As recommended before, you need a real estate attorney (first) and then an inspector.   Please don't skip either because I know of people who have and it led to a whole lot of not good.

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The wealth building strategy here would be to pay-off your high-interest debt first (credit cards), followed by other installment debt - all the while saving at least "15% of income per year (including any employer contributions) is an appropriate savings level for many people; having one to one-and-a-half times your income saved for retirement by age 35 is an attainable target for someone who starts saving at age 25."  All of this should happen before accelerating the pay-off of your mortgage.  And, here's one big reason why:  your mortgage interest is tax deductible (specifically:  "Any interest that you pay on a mortgage toward a property can be deducted from your tax (up to $750,000), this also includes loans for second homes if it stays within the limits of $750,000 and any home equity loans.” Source: Forbes).  So the mortgage interest rate you think you're paying is actually much less when it is adjusted for the tax deductibility.  

It's important to know that wealthy people do things that others don't. They know that having liquidity is essential - and they don't borrow for consumer goods.  But they do borrow a lot - strategically - and are mortgage heavy.  The Federal Reserve reports that the top 1% of the population holds 4.6% of all debt - whereas the bottom 50% in the country carries 36% of all debt.  The more you know about building and preserving wealth, the path becomes very clear.  

Hope this helps...

https://matsorensen.com/ira-ll....

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Never overlook the power of the sign...go buy a cheapo For Rent sign and put your phone number on it; place it at the property site where there is solid traffic.  And, brace yourself.  The calls will follow.  It also provides you with candidates who know the area and had some reason to be in it when they saw your sign.  Hope this helps...

Nooooo...Hard Money Lenders do not offer permanent, long term financing.  They're used primarily for acquisition and renovation to get you started fast but at a significantly higher cost.  I recommend taking the time to learn more about mortgage financing and the qualifications the lender will require of its borrower.  Gotta KNOW this stuff...

Pay the bill...a few recommendations going forward:

1. Do a walk-through of the property before the tenant moves in and ask them to sign off on photos acknowledging that all is in working order.  We've had to go as far as showing tenants how to change AC filters, how to use granite cleaner (and only it on the granite) as adulting isn't easy for some folks.

2.  With service requests, always have the tenant text you photos of the problem.  Ask what occurred prior to the issue.  Most times, you can get a feel for what has happened and walk them through it. In your case, where did the put the Drano if the drain was sealed?  Scary!

3.  Require Renter's Insurance with Landlord As Additionally Insured coverage; it's a cheap date for the tenant and it avoids disputes - especially of the security deposit kind - when it's in place.

I know a $150 service call for a whole lot of nothing is tough but you now know the skill level of your tenants. And, that's well worth that cost.

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@Nina Zou

Once you file for eviction, you don't refile for a second cause of action.  So when you file for eviction for non-payment of rent, you've filed for eviction and don't need to refile because of failure to depart.  Eviction means you are having the court demand they leave for cause.  Any cause.  So if they don't pay rent, know the minimum time your state or lease provides as term of default and give the Notice To Quit. If the tenant fails to pay by the time allocated in the Notice, you file for eviction.  That is the end game. You will not refile a second time for a second cause of action.

Hope this helps...

Bolt!  It's not a legal property.  And, it's not going to be based on current zoning and density. Muncipalities don't grandfather/forgive/help when the dastardly deed has already been done.  Getting it financed or insured will also be dealbreakers because it just isn't what it is zoned to be.  

Bottom line...what starts out crazy, ends crazier.