All Forum Posts by: Jon Holdman

This can absolutely cause issues when you start rehabbing.  Once you start touching something, anything that's already there is now your problem.  Sometimes inspectors will overlook old, unpermitted work.  Sometimes not.  Especially if you're fix and flipping for profit inspectors are going to be pickier than if you're a homeowner working on your own house.  The suggestion to assume you'll need to demo it is good.  If you don't have to, bonus.  If you do, you've accounted for it.  Most likely, if the foundation and construction is good, you'll just need to bring it fully to code.  Call the Greeley building department and have a discussion.  I have.  And I have no issues with giving a building department an address and asking questions about a specific property.  I've avoided a couple of troublesome deals that way, including one in Greeley.

I grew up on a farm in central MO.  They're destructive pests.  I don't think they would damage a house burrowing under a house, but their holes could certainly break a horse or cow leg.  The method we used for eliminating them is unlikely to be acceptable in town.  Releasing them on our property would certainly have not been taken lightly.

When I sign a lease I collect the FULL security deposit and one FULL months rent in cash or equivalent and I hand over the keys.  I NEVER, EVER sign a lease ahead of time, just to prevent monkey business like this.  I NEVER prorate the first months rent.  That's a good way to collect a weeks rent and then have a lengthy eviction. 

I will do a short term (week or so) hold agreement with a non-refundable fee that becomes the deposit if they sign the lease on the agreed date.

In your case, I'd speak with my landlord/tenant attorney and get an understanding of my options.

@Ray Egan I replied in your other thread.  30 year fixed rate investor loans are available, but not appropriate for fix and flipping like you're doing.  You need to be using hard money, construction loans, or a line of credit.  Or, now that you have a successful track record, start chatting up friends and family to find a private lender.  

You MUST not take out a loan with an occupancy requirement if you do not intend to occupy it.  That may get you a better rate, but its loan fraud.  A defense of "I didn't realize what I was signing" won't fly if you're caught.  You must read the documents before you sign them.

Are you doing buy and hold or fix and flip?  Investor loans with 30 year fixed rates and no occupancy requirements are readily available.  But those are intended for properties you want to hold.  It sounds like you're doing fix and flips.  This is not the right sort of loan for a fix and flip.  The people making these loans get paid based on the assumption the loan will be in place for some years.  If you pay off the loan quickly, as in a fix and flip, the loan originator may get penalized for the early pay off.  You may pull this off once or twice with a lender, but you'll burn bridges.  I suspect that may be the cause of the delay in getting back to you.

Further, if you're getting a loan that does have an occupancy requirement (i.e. an owner occupied loan) that you have no intention of occupying you're committing loan fraud.  You may get a better rate, but its not worth the risk, IMHO.

For fix and flips you need to use hard money, a construction loan, or a line of credit of some sort.

I used these from Amazon in a recent basement remodel project:  .  Nice thing is they mount directly to a ceiling box.  No can needed. At under $10 each and no need for bulb or can they're very cost effective.  Similar ones are available in different temperatures (color) and output.

If you rent you will need to take depreciation, and then there is tax on the unrecpatured depreciation in addition to capital gains.  Depreciation reduces your basis, increasing your gain when you sell.  And, don't think you can avoid this by not taking depreciation.  The basis goes down and you pay the recapture tax whether you take the depreciation or not.

You don't equip your units with some type of blinds or curtains? If not, then you gotta expect the tenant is going to do something. You can buy cheapies for $10 or so at Home Depot or Walmart. Does your lease address this? Any restrictions by the HOA or city?

Now, maybe its just to keep the sun out.  But maybe they're doing a grow.

I cannot imagine its cost effective to fix an old window unit. Especially if its very old and used an older refrigerant.  Tell her to buy a new one. 

I do only month to month leases.  No possible way would I do a four year lease.  Leases tie YOUR hands much more tightly than the tenants.  If the tenants want to leave, they will.  If you get fed up with the unending maintenance request, guess what you can do?  Not a dang thing! They have you over a barrel.  Their true colors are showing now that they know they've locked you in.

While in theory you could evict someone over attaching shelves to the wall, good luck having that conversation in front of a judge.

Would have been a good idea up front.  But, no, you cannot add anything like that at this point.  At this point I'd talk to them and tell them you want to discuss any changes to the property before you do them.  But I would not be concerned about shelves.  If they do stay four years, you're going to have a lot of make ready work.  Much of that won't be chargeable against the security deposit.  Flooring, for example, is unlikely to pass muster with judge if you charge them for that.  Even if it was brand new when they moved in and they completely destroy it, you might get, at most, 20% of the cost of replacing it.