All Forum Posts by: Peter M.

When a potential tenant applies for a unit explain that the advertised rent is for automatic ACH rent payments only. If the tenant wishes to use another form of payment, the rent is $100 more. 

I also vote to delay the closing date. Such an extra headache dealing with a holdover tenant. It would have to be a pretty big price reduction to get me to even consider closing in this situation. I also like the idea of an extra amount held in escrow but that could get complicated/expensive quick, not to mention opening you up to a future lawsuit if the seller disagrees with how the money is disbursed. 

Lend it to an investor who knows what they are doing with a proven track record and learn from them. 

This is the main problem landlords have with inherited tenants. Regular tenants are hard, section 8 are even harder. Might be part of the reason this was such a good deal. Trial by fire my friend, it will be unpleasant but when you emerge you will have learned more than you even thought there was to learn. My advice, be firm with the tenant, follow the letter of the law, and don't quit. Go down to the housing authority and talk to them, they don't hate landlords you just have to be understanding and patient and you will eventually find someone who can help you. 

I understand why you wrote this post and pose this question but it is insulting to just about everyone on these forums. It infers that if anyone is successful in real estate, they are corrupt or amoral. Do you expect someone to actually say, "Yes, if you want to make it big, do whatever it takes just don't get caught."?

 Just be honest with people and you will be fine. Just because an investment deal goes south or not as planned does not mean anyone involved was acting irresponsibly or fraudulently. 

All insurance is not created equal but they all work the same way. Use a broker to shop the best price for the coverage you need and shop around every year or two. 

I get emails from several offices but have never bought one- not because they rip people off but because they just aren't deals most of the time and the ones that are get snatched up within hours. People claim they get ripped off from them because of the down payment agreement. It is nonrefundable unless they can't close with clean title. New investors see one they want, put down the down payment thinking it is like EM in a traditional deal, and when they realize it needs more work than initially thought, they try to back out. NWA keeps their money and they claim they were screwed. Caveat emptor. They wouldn't still have a business if they were actually screwing people over. State real estate commissions would have shut it down by now.

The biggest problem is the fact that they do, in fact, do a lot of business, so this creates an artificial rush on every "deal" even when they are not deals. There is no negotiating on their price so you have to be disciplined enough to walk away if it doesn't meet your criteria. I don't understand who these investors are who buy them at the prices advertised sometimes but it must work because they just keep selling them and sending more emails. 

Buy it subject to existing financing if there is any. You get title and can do everything you mentioned. Your risk is if his financing institution realizes what you did and calls the loan. Might not happen if you keep the payments current but with interest rates going up, lenders probably won't let it go on for long.

Look at it like any other potential property and base it off those metrics. Ignore the fact the taxes haven't been paid because it will all be paid at closing so you get clean title. Are you flipping or holding it? How much does it need in repairs? I would be more worried that the deed or lien isn't already owned by an investor who is waiting for someone to do exactly what you are trying to do and collect his redemption fee. Your friend needs to worry about the taxes because it will affect how much he nets from the sale. 

You don't need a license to manage your own property even if you are operating through a LLC. Legally speaking, you own the property, you own the LLC, vis a vis you are managing your own property. The license requirement in most states is meant to protect consumers/investors from unscrupulous property managers and give harmed parties an avenue for justice. Since you will probably not sue yourself, you are in no danger.

The purpose of forming the LLC as I am sure you are aware is asset protection. All leases, correspondence, etc is done in the name of the LLC. The only time your name comes up is as a manager or member of the LLC (depending on how you write your articles of incorporation). The tenant would theoretically not know who the owner is so if they sued, they would sue the property management company, which has no assets, and therefore even if they won there would be no way to collect. In practicality, a small lawsuit would never get that far but if it was a lawsuit for something major, where you are at fault or are accused of fraud, any lawyer would be able to get past the LLC protections if there was enough money to make it worth the fight.