All Forum Posts by: Jennifer T.

Wow!  I'm impressed at all the great lessons and tips you learned with your first listing.  It definitely took me longer than that!

Good call on keeping your eye out for fake references.  I've been running into more of that lately with landlord references.  Obviously my first preference is people not lie on their applications.  But it is almost fun when I ask, "For verification purposes, can you tell me the name of the business you own this property under?"  And then be met with stunned silence or a muttered, "Uh, I don't remember."  Or I just get hung up on.

My landlady before I bought my first home (duplex to house hack) was a real estate agent.  She didn't have anything like that in the original rental ad.  I turned to her when I was ready to buy my home and she did a great job for me.  She also gave me advice about being a landlady and renting in the beginning.  Before I discovered BP, lol.  That was 9 years ago and we still keep in touch a few times a year through e-mail/text.  Unfortunately, she focuses more on suburbs that are 40-60 minutes away from where I buy, so I eventually chose a different agent for my non-owner occupied rental purchases. 

Conversely, the tenants who moved into the previous place I was living left after a few years because they bought their own home.  They'd had a good landlady/tenant relationship with her also.  But were uncomfortable with the idea of their landlady also being their real estate agent and chose someone else to be their agent.
 

If you all have text messages and/or e-mails complaining about the urine smell...especially ones that were shortly after you all moved in...that would be pretty good proof it was pre-existing.

A lot of people assume that tenants are entitled to a walk through but, legally, they usually aren't.  I'll typically do a move-out walk through, if it is requested.  But I always state it's possible I will find other things later.  The last one I did turned out to be more helpful to me.  For some reason they'd felt like they'd left everything great.  They most decidedly did not and it allowed me to point out the major points of damage along with approximate costs.  Ironically, there were two bedrooms you could hardly walk in because they stank of urine so badly.  Because, you're right, you can't "see" a smell.  So I was glad they were there to witness it also because I assume they had just gotten used to the smell.

At any rate, I wish you all luck and hope you're treated fairly with the security deposit.  I realize hindsight is 20/20 but, in the future, take pics before/after you move in/out of a place.  In addition if when you move in there are defects, notify the PM or property owner.  Even if you don't care if it's fixed, at least that is putting it on record that it is pre-existing damage.

Heck, last summer I rented a condo for the weekend in FL.  I took pictures of all the defects and sent the list to the PM company.  With a note that "I was not complaining about the condition, but did not want to be blamed for X, Y, Z."

I've also seen a rise in potential tenant's giving fake landlord information.  Before I make a landlord reference call, I do a few minutes of research and have 1-2 questions ready that (probably) only the property owner or PM would know. 

I'm doing this right now with three duplexes I have.  The rents vary a bit, but most are $1150-$1200.  I give one $25/month discount for paying direct deposit electronically and a second $25/month discount if their rent is paid on the 1st or early.  Tenants are entitled to one or both discounts.

It doesn't help with people who have trouble paying the rent on time anyway.  But for others, it puts a fire under them to pay it on time instead of "getting around to it" and paying a few days late.  I also charge late fees after the rent is 5 days late.

I can certainly understand why other people wouldn't want to bother with discounts.  Yes, it is just rewarding someone for something they would be doing anyway.  But when tenants make my life easier, that's the reward.  I've also seen an improvement in getting rents on time and even early. 

Zillow is feeding you a red herring to cover for the fact that their website is more dysfunction and gross errors than it is useful.

I have two properties that are about one mile away from each other.  An area that had a lot of RE development in the 70s and early 80s.  So, long term established neighborhoods like what you are describing for your dad's property.

I'll occasionally use Zillow to look up rental rates and housing values, even though I know to take the info I get...not with a "grain of sand"...but with a BEACH of sand.  Sometimes they can find those properties.  And sometimes they can't.

I'm not sure which is more bizarre.  That they sometimes can't find the properties.  Or that they sometimes CAN, even entering exactly the same information.  Though I never had issues with them accepting a rental listing for those properties and having it show up.  But that was also in the days before they started charging for those services.

FWIW, I just had a S8 inspection earlier this week that dinged us for some trash in the backyard.  However, that was trash that was on the property itself.  I can't quite tell from your description if the trash pile is on your property (then yeah they might) or near your property, but not on it.  If it is the latter case, they shouldn't.  But just because they shouldn't doesn't mean they won't.

In principle, I'm all for inspections to make sure that properties being paid for by government monies are habitable and in good condition.  But, unfortunately, it goes WAY, WAY beyond that where I live.  For example, we also got dinged because there was a 2" piece of trim that was missing behind a door.  Complete nonsense.  And then they wonder why so many landlords don't want to rent to S8 tenants.

To enjoy all the benefits of an owner-occupied mortgage, it has to be your place of residence for a particular amount of time.  It's usually one year, but you should ask lenders you are considering.  And also keep in mind for your own finances that it cannot be a rental for that period of time.

On to the HELOC. It's extremely, extremely rare to find a bank that will allow a HELOC on a non-owner occupied property. Which, as along as you still reside in the property when you take it out, is fine. It's possible some banks might close it down, once it is not longer owner-occupied, but I'm not sure about that.

HELOCs are typically only a 10-year term. So, at best by the end of that term, it would need to be paid off because the bank won't re-up since it would be non-owner occupied at that time. This second scenario is exactly what happened to a friend. The bank didn't require her to pay it off when she turned her primary home into a rental, but they didn't renew the HELOC either once the ten years were up.

Because it's human nature to avoid unpleasantness, even when it is foolish and childish.

I've had one marginal tenant for the last four years who goes through periods of being "okay" about communication and "unresponsive".  I no longer bother with trying to get an answer when she is in her "unresponsive" phase.  She gets one text message 1-2 days after the rent is late.  If she replies that she is making the rent deposit on X day, great.  If she doesn't respond, then I "speak" with a 5-Day Pay or Quit notice on her door the next day.  That always results in either her making the deposit...usually still without contacting me.  Or she immediately gets in touch with me.

She knows all that.  I've had the same repetitive conversation with her countless times:  that she knows I'll work with her, but I can't work in a vacuum and she will promptly get a notice every, single time she ignores me.  Then she'll get better for awhile.  Then falls back into her bad habits.

She always pays her rent.  She just actively needs to be managed.  Which is a pain.  But not nearly as big of a pain as a vacancy.

Unless there's another obstacle(s) you haven't mentioned, you're actually mistaken about real estate loans and LLCs.  Which is good news!  They aren't difficult to get at all, even with typical brick and mortar banks.  BUT you need to speak to the commercial lending division of your bank.  This is a key phrase to use to cut out confusion.  I found it astounding, but the typical loan officers in a branch only do residential loans and were completely clueless on who I even needed to talk to about a non-owner occupied loan. There are also some banks that don't do commercial lending, but a lot do.  So don't be discouraged if you happen to run into that.

You typically need a 20-25% down payment and it's always going to be a higher interest rate than an owner-occupied property loan.

If you also need to borrow funds for the renovation, that can be a little more complex and I don't think there is much getting around having a higher interest rate during the renovation period.  But it really just depends on the bank and the extent of the renovations.

Extensive renovations and it might fall under a "construction loan" category.  I've never had one of those with a local bank, but I've heard they are a lot of stipulations.  Like requiring a general contractor to be hired.  Periodic reviews and inspections to make sure targets are being hit.  And the interest rate is usually higher while the renovations are going on.  There are also shorter term loans (often one year) called "bridge loans".  But the property needs to be fixed and refinanced back out before the loan is due.  You also need to have at least some incremental money up front.  Because both of those types of loans generally reimburse you back, once segments of the rehab/construction are completed.

With all that said, I had a sweet deal with a local bank for my first rehab.  I thought it was a pretty substantial renovation.  But, fortunately, they didn't, lol.  Since it wasn't new construction or a gut job, they included $30K in rehab funds with my loan.  I knew the actual rehab was going to be more ($45K), but that was close enough for me.  But the loan itself wasn't any different, interest-wise, than if the house had been in good condition.  It was also a super simple process to get the rehab funds spent reimbursed back.  I wasn't required to use a general contractor.  No inspections.  I just e-mailed my receipts/invoices to my loan officer and the funds would be deposited into the checking account I had with them 1-2 days later.

At any rate, I included that last paragraph just to show that you never know what you will find, until you ask!