[SD Realtor]

Agreed FLU… I almost feel compelled to buy something just because the money is so damn cheap. Looking at another 4plex this weekend out of state.

[SD Realtor]

Tough call Paramount but I would go with keeping the deposit and letting them try to get it back through the courts.

As a next time sort of thing, when you have the tenants first move in have then sign a preoccupancy inspection that clearly states that there are no signs of urine (stain or smell) on any of the carpet. Then when they move out, you go through the post occupancy inspection, note the stains and have them sign that. At the very least then you have acknowlegement of the urine staining.

Obviously there are no gaurantees here but then the effort to get the deposit back is made by the tenant. Worst comes to worst you lose the case and have to give the deposit back. There are no “damages” that the tenant can claim because you kept the deposit over damage that clearly was there. At worst the judge decides it was normal wear and tear and you refund the portion or all of the deposit.

[SD Realtor]

The presumption is that you will go through the normal means of procurring your loan. That is, you cannot just assume the loan your parents have. From a financing angle, this will not be any different then if you bought the home from a non family member. You will need to qualify for financing on your own, and you will need to come up with the downpayment. The escrow will commence and once your lender funds the loan, those proceeds will go to pay off your parents loan and the balance will go to your parents.

If your parents decide to give you a break on the price and sell you the home lower then market value that should even be okay as long as they appraise. However, the tax assessor will base your property tax on fair market value. You will also need to make sure that you purchase the correct amount of homeowners insurance should you get the home below market value.

[SD Realtor]

I believe if you have documented proof of damage that is specific to this tenant and is beyond what would be considered normal wear and tear, then you will be okay. If it were me, I would keep the deposit and apply it to the carpet. If the tenant wants to challenge then they will take you to small claims court. Then it will boil down to your documentation (ie before and after pictures) and whether the judge views the damage as beyond wear and tear.

[SD Realtor]

dave chap = awesome

[SD Realtor]

It is really a tough call. How would you deal with things if the gaurantee the seller made needs to be backed up? Suppose you have an inspector over and things are up to code but who undertakes the cost of making things visible for the inspector to make the inspection and then patch things up again?

My point here is that the gaurantee is fairly worthless within the real estate transaction. If you want to have an attorney draw up a much more formal agreement that is outside of the transaction between the two parties then that is another story. However having a written 1 or 2 page document from a seller seems to not be very well thought out to me.

Also if you do intend to gather permits for all of the work, and the renovations were “major” per your original post, it is in your best interest to know EXACTLY what you need to do to get the work permitted. Do you have a list of what you need to do and what costs are associated with doing it?

As far as taxes are concerned if the square footage of the home as it is now does not match the current assessment then when you get all the permitting done, the home will be reassessed at the updated square footage and you will pay the correct property tax.

Here is my point, have a clear plan. If you are going to move forward with purchasing the home and then getting all of the permits for the previous work done, then you better darn well do your homework and understand what the potential costs are. In the best case all of the work was done correctly and you obtain permits. This process will cost money. In the worst case, the work was not done correctly and you will need to remedy the problems. This will cost alot more money. Honestly to me the “gaurantee” you have is worthless. Get an attorney to draw something up and I may change my mind.

Here is the alternative. You love the home and it all works from you then maybe you buy it and live with it as is. If in the future you do decide to undertake the permitting process then so be it. However before you do that, know what it takes and what it costs. In the meantime, enjoy the home, get a thorough inspection, perhaps get all of the plans and documentation they have for the work they did and have a contractor or engineer look at them. Don’t rely on a physical inspector to be able to give you an assessment of the work being up to code or not.

[SD Realtor]

If the tenant is good then definitely 3.

[SD Realtor]

There are strict guidelines for reporting occupancy rules. Once more, this stuff for the most part originates with the underwriting guidelines for the GSE’s.

You don’t like it, complain to the GSE’s which is in essence a branch of your government.

Don’t advocate private entities commit fraud.

[SD Realtor]

NSR it is tight… super tight… not just in SD but in many other cities as well. We bought a fourplex in another city last March and since then it has gotten even tighter for the submarket we are looking at in that city for similar properties.

Early remember that the reserve reqt I told you about was for us and we were doing it with Aim. It may vary with others.

[SD Realtor]

You need to check with them. I have heard owner occupancy rates need to be at least 50% and I have heard 66%. It varies with lenders but the most important thing is that it meets guidelines so that the loan can be purchased by a GSE. Better to ask the lender rather then here.

[SD Realtor]

Early – What I have found is that there is always some murkiness with regards to the underwriting guidelines that each originator has. Lots of people like to make postings about experiences that they have had and make it sounds like the gospel. I would preach that alot of the questions you have posted about are best discussed with the lender you select rather then with posters.

I would agree with FLU based on his locale and experience. We did our rentals opposite of what he did, we simply financed all of them and did end up putting down 25-30% in all the cases. We did not pull equity out of our home to make the purchase either. All of our rentals were purchased out of state and they are pure cash flow plays but we did use Aim.

Also understand that the levels of knowledge grow as you move inward. The loan officer is okay… your processor is better and will have better detailed knowledge of the underwriting guidelines as they pertain to your unique situation… of course you never have access to the underwriter but they are the golden goose. So yeah using a rough number of 75% of the rental income is a good swag. Seasoned rentals (having at least a tax return with that rental on it) are more helpful then recently purchased rentals but that doesn’t mean that they will not use your income from a recently purchased rental. You will most likely have to prove it. Also in my case we had to prove (I think) it was 6 months reserves for all of our properties combined. Again, this was our case with Aim and doesn’t mean it will apply to you.

When you say foreign properties do you mean internationally foreign? I am not sure how they would treat it but if they are on your schedule C then that would help, simply ask. If they are anywhere in the USA then not a problem at all.

[SD Realtor]

The rates you quoted sounded on target early. You may want to also try aimloan.com. They are pretty competitive and I have used them for rentals in and out of state and they are located in San Diego.

[SD Realtor]

It is a tough call. As a landlord I have played it both ways. I do have provisions in my leases that discuss different scenarios. For the most part I have told the tenant that if it is not identified at the time of their pre occupancy inspection then I will not cover it. If the property has a pre-existing condition, for instance, alot of homes have water ants that can be problematic on a seasonal basis, I do tell them that up front and that they need to be aware of it and deal with it.

I also apply what you said, hey if it is a good tenant and goodwill is kept by ponying up a few hundred to deal with the problem professionally I take care of it or maybe offer to split it or something like that.

[SD Realtor]

I am done with you.

Here is a cut and paste from my original post.

“Let it run its course and hit the bottom,” Romney said. “Allow investors to buy homes, put renters in them, fix the homes up, and let it turn around and come back up.”

Look at what you turned it into.

A more generalized comment is that this website was created to discuss real estate. Real estate is not limited to primary occupancy. Yet it has degenerated into not much more then a political sounding board. Against my better judgement I participated in those discussions.

Not any more. If it is not real estate related I will not bite.

[SD Realtor]

CAR once again it is your entire point of view comes from your own perception. You fail to consider any other point of view. As I said many a poster on this site owns rental property or multiple rentals.

You make is sound as if passive income from rentals is some crime against humanity. You therefore slot any other people who earn income from rentals as doing something that is in your own words, “not the right thing to do”.

I had my first rental when I was making less then 40k. I know many many families who are doing much better with rentals and make middle class money and are quite happy as opposed to putting that money at risk in the stock market.

Let’s make darn well sure that over the past four years the current administration has bailed out Wall Street, and furthermore been at the helm of all these institutional deals that you want to whine about. The current administration has also been 100% on board with all of the measures that keep people who are slaves to underwater properties in that position. Let’s not forget that with all of the inventory there would be plenty of properties available for everyone, investors and owner occupants alike. Furthermore if policies were enacted that wouldn’t give ANY IDIOT a loan then that would serve to provide a stronger foundation for homeowners. Mandatory large downpayments would go a long way as well. Contrary to your point of view home ownership is NOT A RIGHT. Most of the problem is an entitlement attitude that we “had” to get people in homes. It was shared by republicans and democrats and was plain wrong.

Once again, Romney said nothing about these sorts of institutional deals and programs that were given birth UNDER THE CURRENT ADMINISTRATION. In fact letting the foreclosures happen TAKES MONEY AWAY FROM the super rich. However rather then addressing that issue of the fact about letting foreclosures happen, you jumpt to a conclusion about what happens to the inventory based on programs that exist today under the current administration. You have nothing with regards to facts what Romney would do. You have speculation.

I on the other hand have seen four years of TRILLIONS of taxpayer money move from the public to the very very rich… It is amazingly hypocritical but it is nothing that I don’t expect.

You take a very fair and level statement and jump to a conclusion that is speculative. Whereas you conveniently don’t comment on what has gone on.

Talk about favoring the rich…

Honestly it is not even worth debating. I am out.

[Author]

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