All Forum Posts by: Rob Singles

This is going to be specific to your state's law. If you are viewing online auctions that say "occupied property" do not just assume it is the former owner. It could be a tenant which will follow a completely different set of laws. 

Hopefully, someone familiar with Maryland law will be along to give you some insight. In the mean time, I'd go meet with a local attorney who can educate you on the issues - this same person could be the one that files the paperwork for you. 

Whatever your offer is make sure that you price in tenant turnover, no tenant that is currently paying $800 is going to be happy about paying $1200. You will likely have to turnover both units. Also, if these tenants have a lease you need to factor in the time-frame remaining until you can even consider raising the rents. 

In a recent purchase of mine the below market rents were a result of a checked-out landlord. In that case, there was also considerable deferred maintenance that had to be remedied, watch out for this in your property inspection. 

Finally, check to make sure the rents are not low because of a rent control law or some other restriction.  

Try to find a local investor mentor to go through the deal with you. An occupied property comes with additional challenges. Are the occupants a tenant, owner, squatters? Each may have different rights and each may have a different legal remedy required to remove them - this could be a lengthy process depending on your states laws. 

Based on it being occupied, financing is likely out in the traditional sense. Hard money may be available, which could actually lead you to a good mentor and put a second set of eyes on the deal. 

I'm not trying to be discouraging. I do believe the best way to learn is to jump in and do it; but you must go in fully informed. You are doing the right thing by reading the information here and asking questions. Best of luck. 

Hello Tim,

As a landlord a dog raises two issues: 1. Liability, and 2. Additional damage. 

You may try taking a proactive approach. For the liability aspect, obtain  a renters insurance policy which covers the breed of dog you have. For the damage aspect, offer to pay an additional amount for a deposit on top of what is requested. Show the potential landlord the extra steps you have taken.

A responsible pet owner is more than welcome at any property of mine, however I do additional investigation to make sure they are in fact a responsible pet owner. Also, any of the "bad dog breeds" (or mix of) just cannot be accepted because of insurance issues. 

Having the proper insurance is absolutely critical. However, I am not sure what type of insurance you are asking about. 

If you are asking about property insurance for flips I always use a policy that specifically covers rehab, such as a builders risk policy. The danger in using a regular homeowners policy is the insurer may deny a claim as most homeowners do not cover unoccupied  rehabs. 

If you are talking about professional liability insurance for your unlicensed crew, then you need to talk to an insurance agent. You have two issues, in the state the work is taking place is it work which requires a license? If so, fix that first. If not, talk to your agent and have them get what you need. I would suspect general liability and work comp will be needed at a minimum. 

Have you or someone you trust physically inspected the house? Going on pictures alone is a risky way of doing business. I recently was in an auction house that looked real good, no holes in the wall, fixtures not missing. On physical inspection all of the electrical panel had been stolen, all the wires cut out of the attic, water heater, and air conditioner as well. 

Many online auctions will not permit financing and require proof of funds quickly after auction end. Also, many of the online auctions will state in their terms they can bid against you on behalf of the seller up to the reserve price. In essence, you could be bidding against yourself. 

Just make sure you do your due diligence and completely understand what you are getting into. Do not let the deadline imposed push you into a deal not knowing the terms.

As others have said an individual forms an entity (corporate or llc) for the purpose of limiting liability. The theory is you invest X (say $100,000) into the LLC as capital, and that is the limit of your risk should something go wrong. A personal liability clause is essentially placing all of your personal assets at risk.

Where I invest almost all properties are sold as-is, bring all inspections. It sounds as if you have employed inspectors who have given you a clean bill of health. If for some reason you have a gut feeling you need this liability clause I would trust your gut and get a second opinion or get out of the deal. 

However, to me it sounds as if your lawyer is taking a very conservative approach to this deal. Are you paying your lawyer by the hour? If so, how many hours have gone into negotiating this term? If I were in your shoes, I would be fine with paying the lawyer to ask for the personal liability clause (like .2 of an hours), but I would not authorize the lawyer to spend another second after it is rejected. I do not think any sophisticated seller would agree to the term.  

I am about to signup for Buildium, if anyone wants to PM me for a referral. 

Hello all, first post here at BP, a great resource indeed. Now let me get on to the question.

What options do I have to deal with the first mortgage holder, PNC Bank, after a second mortgage foreclosure?

I have found a property (located in FL) which was foreclosed on by a second mortgagee, meaning the first holder, PNC Bank, still holds a mortgage on the property. The second is offering the property at a very reasonable price, of course.

While the second mortgagee was pursuing foreclosure, PNC filed for foreclosure, but then dismissed w/o prejudice and they have not refilled in the intervening 2 years. PNC’s interest in the first came by way of successor by merger (2 mergers to be exact).

So if this deal is to work for me, I need to work out a resolution with PNC. Any ideas on how/if to approach PNC on this? The face value of PNC’s first is a little under market value, however I assume with late-fees and what not it is underwater.

The original property owner is not cooperative, so the only thing I can think of is to purchase the note from PNC and then file a satisfaction.

In trying to lay everything out I may have made it more confusing than it needed to be so feel free to ask any clarifying questions.