All Forum Posts by: Jeff Rabinowitz

Finding buyers at a REIA is easy. Simply ask people what they are looking for. Any serious buyer will be able to give you a detailed description of the type of property they are buying in a few minutes. That includes, city (most can probably narrow that down to a few dozen blocks in each city they buy in), amenities (baths, basements, garage, etc.) and price. If they are adding to their portfolio they will usually be happy to share the answers. If you find what they are looking for you will have an excellent opportunity to flip the contract.

Doesn't anyone remember 2005?  Real estate doesn't always increase in price.  Leverage can and does cut both ways.  It can be a valuable tool but can be dangerous if used in the wrong situations.  It is important for the investor to assess their resources, needs, goals and the market situation to arrive at the amount of leverage (if any) that is appropriate for them.  Unencumbered, cash flowing rental property can be important pieces in one's portfolio.

 People are more likely to share their experience if you show that you are earnest.  You may find that using your name and uploading an actual photo will yield better results.

Original post states lease expires 6/7/14. Tenant stated they agreed to extension but didn't actually since they refuse to pay the 30% holdover rate and did not pay the last month's rent. The tenant cannot and the landlord should not allow any tenant to dictate the terms of an extension unilaterally.

If a 30 day notice is required to terminate a lease that can and should be sent as soon as possible.

Eviction is a process. It takes time. The clock starts when the landlord sends either a Demand for Possession or a Notice to Quit. After the appropriate amount of time has passed (this is going to vary by State and sometimes County) the landlord may file for a court date. Cash for keys may be a possibility but, in my experience, that strategy is much more effective when a court date has already been scheduled. If the tenant leaves by whatever means before the court date the landlord can cancel court. If the landlord has waited and relied on the goodwill of the tenant (it doesn't seem that there is much goodwill in this case) they may be disappointed when the tenant changes their mind and they must still file the paperwork to start the clock on the eviction after waiting weeks or (gasp) months.

In response to the previous post: if the tenant has stayed past the term of the lease the landlord has cause to evict.

I'm not sure I would show the house to a prospective tenant with a hostile tenant residing there. The house may not show well and if the current tenant is there during the showing there will be tension or worse. Any good prospective tenant will be turned off by this. Since you do not really know when the home will be available to the new tenant I don't see the benefit.

Treat the current tenant as hostile and begin eviction as soon as possible. Terminate the lease. (In Michigan that requires a 30 day Notice to Quit). Do not use a Demand for Possession that will allow the tenant to stay if they pay the rent owing. If this actually goes to court before the tenant moves the judge may allow the 30% higher rent for the hold over period. If the tenant is collectible you may actually get it.

Don't be in a rush to hook up to sewers even if it is available. My home is in the City with a septic field and well. There are occasional expenses associated with this. (Septic fields rarely need to pumped unless there are more people living in the house than the field was designed for.) There is a component of our electric bill that covers running the well pump and we must purchase salt for the water softener but water bills are quite high where I live and are constantly increasing. We never get one.

Your concerns seem legitimate but Dodd-Frank should not be one of them. D-F comes into play when a loan or installment sale is made to an owner occupant. In your case your business is asking for a loan from a lender. D-F does not apply to this transaction.

@John DeFoor , you state in your original post that you have enough money saved so that, combined with your LOC, you can purchase your first property and have enough left over to rehab it and cover expenses but you do not want to use the LOC because you are saving it for a SECOND property. Why? You may discover after purchasing the first property that you would prefer to manage the single property for a while to get some expertise and learn the ropes. You may discover that you don't really care for being a landlord and that you would rather pursue other investments instead of buying another property immediately.

If you do decide you like being a landlord after managing your first property successfully for a while you will present a better risk profile. Now you will be an experienced investor. If you have been able to keep the property rented continuously, or nearly so, a portion of the rental income (50-75%) will now be considered when determining your DTI ratio. if you save another substantial down payment you will be a much better risk. Many banks will still not wish to make small loans but you will be in a much stronger position to find a private lender who will.

@Jenni Purvis