All Forum Posts by: Steve Morris

OK, get about 10 letters a month.  All in the garbage.  None of them hook me, even the ones that look handwritten.  The handwritten ones look less convincing that something on letterhead.  If you have no letterhead and have to write letters instead of printing them, do you have enough money to buy my house?

Word of advice, instead of talking about yourself and your leisure time travels.  Talk about how you'll help them.  Ask questions, like do you need money and housing, do you want a bigger house, something about your house you don't like?

Still think phone calls are the absolute best way to do this. but am in a minority here.

Not trying to be mean, but you did ask for feedback.  You tell me your success rate since I can always be wrong - It's America!!!

Darn, Freudian slip MEANT 

BROKEN sewer line

"He wouldn't have access to that money, but if I was the seller and did the repairs and the buyer bailed, I would be pissed"

Well, in order to be able to finance the property for ANY seller, you may need to do some repairs. If the appraiser saw a major CapEx problem (broker sewer line or hole size of an airplane in the roof), as a seller I think I'd be more prepared.

I guess if the seller is taking a MAJOR discount for the repairs and noted that upfront with disclosure and a buyer came around for another bite, I'd be more inclined to say not than be pissed.

Real estate is not worth being pissed about.  Much larger things to be upset about.

Think item 2) is BS.  What if you don't make a profit or have a fire and/or vacancies?

Item 3) you'll probably need a 3rd party appraisal, maybe a BOV is you both can find a broker you think is neutral.

You learned the lesson - Contracts involving money MUST be written.  I've explained 100 times (well, almost), it's not because you don't trust the other parties, it's because everyone hears the same terms differently.

OOPS - MEANT 

I would think hard

Personally, unless it was crucial, I wouldn't think hard about telling tell a seller I'm in a 1031 if the buyer's property has already closed and he has funds.  Of course, if seller raises a big stink, I'm not going to hide it.

I would just state the E/M, down and loan amount proposed.

Why not say? - Sometimes they know you've IDed their property, sellers (and their brokers) get a lot less flexible on stuff since they know you're stuck in 1 of 3 properties and getting out of a nominated property may not be an option.

Why say? If you're in a 1031 and making an offer, it shows you have funds and motivation to close.

"Can anyone tell me the process as a landlord and what I need to do to be prepared?"

I'm in Portland - You cannot treat a tenant any different based on the source of income which includes Sec 8 vouchers.

So treat them like anyone else with credit screens and income qual.  Sec 8 rents need to be competitive, otherwise, they'd never get into private housing.

Sometimes they can be beneficial like with bad tenants.  Make sure you find out who the tenant's caseworker is at the housing authority.  If they get out of line, call the caseworker and they have the power to pull vouchers since there is already a lot of demand for them.

1.) Does a house with conventional financing need to be owner occupied? 

AM NOT IN TX SO RULES MAY BE DIFFERENT - What type of loan are you getting?  Should be pretty obvious if it states it needs to be owner-occupied to be funded.  Are you using a resi mort broker and does he have experience with non-owner occupied stuff.

2.) Do I have to honor the previous owners lease agreements and if so what are strategies to get one of the tenants out? 

Usual and customary is that if the leases precede your purchase, you need to honor them.  However, if they're at market and OK tenants, why would you want them to leave?  You bought it for income and it won't be vacant and generating income.  Getting tenants out may be a large rent bump at the end of lease and see if that works depends on local law.  Then you can go up the ladder like cash for keys.

3.) My mortgage broker said the problem I'll run into is getting a insurance policy if occupied at time of closing. is this true? If this were the case how could investors finance occupied homes?

Again, your broker have any experience on financing rentals.  I do apartments and that sounds like nonsense.

Welll, odds are your original broker will find out eventually.  I'd sit down with him first and explain why you're using the other guy if you feel you have to.

He'd be more pissed if you didn't tell him and he found out later than disclosure up front.

Sure - Real estate markets go up and down.  Right now, no one knows the value of retail as an example.

However, this reinforces a couple of things:

1) Understand the return on your investment and be realistic

2) Realize return is based on two things: Operating income and equity growth (price appreciation)

3) Make sure you're making good operating income from DAY ONE.

4) Next five year probably not real good for price appreciation

5) Manage your debt wisely since it is an "expense".  After COVID, if your debt is >4%, you should re-fi if you do NOT have onerous pre-pays