All Forum Posts by: Mohammed Elzagha

@Meryl McElwain that’s disheartening to hear. I was concerned when the pandemic first started, but like most people on here my collections so far have been unaffected. I’d tend to agree with some of the others and it may be a location or screening based. In my area there aren’t any comparable rentals in the price range I’m offering right now. So my tenants can’t afford to get evicted since there’s nothing available. I may be leaving some cash on the table by not raising rents more aggressively, but honestly if I’ve got good tenants and I’m cash flowing why stir the pot.

I saw an insightful article on CNBC that I saved just in case. It’s a letter a landlord sent to his tenants explaining that through these tough times landlords and tenants are both struggling.

https://www.cnbc.com/2020/04/10/told-my-landlord-i-cant-pay-rent-due-to-coronavirus-how-he-responded.html

It wouldn’t hurt to mail out a similar letter you your tenants and hope for a humane approach. Unfortunately there’s not much sign of things getting better in the short term, but we have to adapt.

@Matt Nico I’ve run into similar issues trying to finance investment properties. Big banks/national banks are reluctant to count the rental income and usually apply a heavy discount before adding it to your overall income. You might have better luck with local banks or credit unions as they are more flexible. However, I’d be cautious about over extending yourself and relying strictly on the rent to cover your expenses. As you’ve seen with current events of the covid-19 pandemic, rental income or even a w-2 isn’t a guarantee. If they are raising red flags about your debt to income ratio, I’d make sure I was confident I had enough reserves to weather a storm.

@Jaron Walling It does not appear to be in a flood zone. The house sits far back and high enough not to have to worry about flooding.

I have been a real estate investor for 8 years now and I have done dozens of flips and have a handful of rentals. I have always avoided properties with pools, creeks, or any form of water due to liability and maintenance issues. However, I am now consider a property for my personal residence that has a large creek running through the backyard. The creek current is fairly strong, but the yard has been tastefully designed. The creek is about 30 feet from a 5 foot retaining wall, so I believe I have plenty of height and distance for overflows not to reach the home. 

My question pertains to value and possible issues with a creek property. I plan on this house being my forever home, so overpaying isn't a big concern but obviously on my mind as an investor. The asking price and my offer are about $15/sqft higher than the highest comp in the neighborhood, but I am willing to absorb the loss to keep my family happy(3 kids and a puppy making life hectic in my current home). Are houses that back up to creeks normally more or less expensive than comparable homes without creeks? Does anyone have any experience or concerns with a property like this? I have attached pictures as a reference.

Brand preference is subjective, different people have different opinions based on experience. Each brand makes appliances on the low and high end to capture the most market share. The quality varies greatly by model and not necessarily by brand. I’d research the most popular models in your price range.

This article assumes the house is vacant. It claims a 1% increase in value and a 4% interest rate, leaving a negative 3% return. Even if those numbers are right, it does factor in the rent you collect if you are an investor or the rent you save if it’s your home.

Misrepresenting a pet as a service animal will soon be a crime in Alabama

“Al.com reports it will soon be a criminal act to claim your pet is a service animal when it is not. That includes anyone who misrepresents a pet as a service animal or an animal-in-training in public spaces or housing.

If someone knowingly and willingly misrepresents themselves as an owner or trainer of a service animal they will be guilty of a Class C misdemeanor. The fine is $100 and 100 hours of community service with an organization that serves individuals with a disability.

The new law will also protect businesses and their employees from being charged if someone pretending to have a service animal is caught on their premises. If a service animal is removed for being a direct threat to others at a public place they must provide the person with a disability the option of returning without having the service animal on the premises.”

https://whnt.com/2019/08/15/misrepresenting-a-pet-as-a-service-animal-will-soon-be-a-crime-in-alabama/

I agree with the people recommending you seek legal advice from a lawyer. Guessing and learning the hard way is always riskier and more expensive. You are looking at it as "wasting" money on a lawyer, but in reality you are paying a professional to guide you with accurate information for this investment and the knowledge to apply towards future investments. As many have said, the laws vary by state, so one persons experience may not apply to you.

I ran into a similar situation. A property foreclosed through a sheriff's auction for an unpaid lien and the buyer was issued a sheriff's deed. Then the property was foreclosed on by the bank for the unpaid mortgage and auctioned at the courthouse steps, where I purchased it. Which foreclosure was the first to be auctioned was irrelevant. The date the lien or mortgage was originally recorded was more important. In my case, since the mortgage was issued and recorded before the lien, the mortgage foreclosure wiped out the lien and the sheriff's deed was worthless paper. However, had the lien been recorded before the mortgage, I would be responsible for paying all liens prior to the mortgage being issued. Again, this was just based on my one experience and there are other variables that play into the equation, especially your particular state's laws. 

I also, don't know what happened to the buyer's money that purchased the sheriff's deed, since my foreclosure deed trumped his. I suspect his money was wasted buying a lien in 2nd position.

Long story short, spend a couple hundred dollars and talk to a lawyer.

@Ryan H I don’t usually supply fridges in my rentals, because it’s an extra appliance to maintain.

I’d sell the one you have now and allow them to use their own.

@Skyler Mckinney I understand your reasonings for leaving your job, but I agree with what most people are saying. It’s much easier to do deals and get financing when you back up the debt with a w2. So even if you don’t return to your current job, you should consider picking up another one to boost your income until you’ve established yourself in real estate. Getting a realtors license is a good way of not only learning your craft, but making money helping people buy and sell houses.

I got lucky in college and built a website business and was able to sell it once I graduated. That money funded my purchases for the first 2 years and rental income was flowing. Once my cash had been fully invested I attempted to purchase my next property though financing and was denied. Despite owning several properties free and clear and having a credit score of 824. The problem is bank view rental income as inferior to w2 income.

You're VA checks may qualify you for certain loans. You may look into doing a BRRR using a VA loan and build from there. The great thing about real estate is it's flexible and once you've found your niche you can perfect it.