Investment Property Seller Antics
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Typically the purchase of an investment property is smooth. Sometimes title work complicates the process or the buyer’s financing falls through. Occasionally, you see a property seller start to do strange things.
My customer purchased a multi-unit property that had one vacant unit. As part of the purchase agreement, we require that we are able to show and lease the property prior to the closing. This helps us get a jump start on finding a new tenant.
The customer was at the property showing a unit and ran into one of the other existing tenants. She told him she was moving out at the end of the month because the existing owner was a crook [her words]. Seems she claims that he stopped by looking for not just this month’s rent, but next month’s rent also (when my customer would actually own the property). Luckily she was smart enough to realize that she had no reason to pay him next month’s rent early regardless of who owned the building. Needless to say, my customer was quite upset. A quick call to the listing agent put that problem to bed.
I recommend that when you buy a building that is currently rented, you as the buyer should go over to the property as soon as possible to introduce yourself and assure the tenants that you want them to stay. Talk to them about what they like and don’t like about their unit. Confirm that in fact there have not been any side deals made with the current owner.
This short 30 minute visit can help alleviate many silent deal killers prior to closing!
Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.
Scott Ficek is a Minnesota Real Estate Agent with RE/MAX Advantage Plus in Minneapolis and helps new and seasoned investors buy and own Investment Property. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.
Carnival of Real Estate-Election Results
In the spirit of the upcoming election, I thought it would be fitting to spin a little political terms and political history into this week’s Carnival. (Don’t worry, I am not going to start a long diatribe on why I am voting one way or another. I don’t want to be the first (I think), Carnival host censored by the Carnival Admin!~)
The United States Presidential Line of Succession was first passed into law in 1792 naming the Senate Majority Leader and then the Speaker of the House as in line after the Vice President to take office. In 1885, the President’s Cabinet was added in place of the Majority Leader and Speaker, but, in 1947, the Speaker and the Majority Leader were added back in above the cabinet. The only other changes were to remove the Postmaster General, in 1971, from being in the succession and add the Secretary of Homeland Security to the bottom of the list in 2006.
Despite there being many, many topics discussed in this election, between Joe the Plumber and arguing about how many houses McCain owns and what Obama paid for his mansion in Chicago, this election has been lately centered around the economy with the housing crisis in the spotlight. Seemed only fitting that the top political office awards go to those posts about that topic.
The Presidential Award goes to The Digertati Life. As SVB (Silicon Valley Blogger) states, we often disconnect the foreclosed home (that we are excited to get a good deal on) from the family that once lived there and lost everything. The video is especially eye opening about Foreclosure Alley’s Personal Stories of Financial Loss: The Aftermath of Foreclosure.
Toby Boyce at Saide’s Take on Delaware takes home the Vice Presidential Award for explaining the recent market collapse associated with Mortgage Backed Securities. He puts on his Bubba Gump hat to simplify the explanation and gets Forrest’s Take on Mortgage Backed Securities.
Even after all the doom and gloom you hear on television these days about the housing market, it 
was amazing to have Amy Bohutinsky at the Zillow blog tell us that 32% of the people they surveyed still believed their house when up in value over the last 12 months! Amy gets the Speaker of the House Award as she explains Strangely, “Not My House” Sentiment Continues, Albeit a Smaller Group.
The Senate Majority Leader Award goes to The Mortgage Reports Blog that explains How Cutting The Fed Funds Rate Helps The U.S. Economy. While many people believe cutting the Fed Rate helps the economy, Dan cautions that we could be overheating it.
After that big dose of reality and the stress of watching the political coverage you need to get a laugh now and then. Two posts gave me a smile and are worth honorable mentions.
- Purva Brown at Sacremento Real Estate Girl gave me a fright when she perfectly described a customer that I am working with right now in her post titled: Who? Me? A Monster?
- Over at Mike’s Corner, Mike Price talks about How To Be A Clueless Twit and Social Media Failure and how as Real Estate agents, we need to remember that Blogging and Social Media is not an immediate return.
It’s late at night as I finish up this week’s carnival post. I suppose I am just in training for another long night of watching returns on Tuesday.
Remember: Get out and Vote!
Beware of Expired Rental Licenses
I have previously written about the new Minneapolis Rental License Fees. I have even talked about how the City of Minneapolis has hired people with the sole purpose for finding unlicensed rentals.
When buying an investment property anywhere, not just in Minneapolis, it is easy to assume that the property that you are buying has a rental license. You need to check! In many cities, you can simply call the licensing department. In Minneapolis, you can simply dial 311 and they will tell you.
The problem with no active rental license is that it can cost significant amounts of money ($1000 fee plus license cost in Minneapolis) to get the building licensed again. In some cases, the building may not be eligible for a license (See my License Lost for Good story).
Do your homework!
Carnival Of Real Estate is Coming!
For those of you that have spent anytime cruising the real estate blogosphere, you may have run across a reference to the “Carnival of Real Estate“. The goal of the Carnival, as it is know in the real estate blogging community, is to:
..bring together the best real estate bloggers from around the country (and world) to share information about what we’re all passionate about: real estate. This is intended to be a forum for everyone to participate. Like a potluck, everyone brings something and may the best dishes be recognized each week. [from their website]
The interesting part about the Carnival is that each week it is hosted at a different blog/web site. I am excited to announce that on November 3, this blog, Minnesota Investment Real Estate, will host the Carnival. It will give our readers the chance to experience different blogs, new writers, and interesting articles that they may have not have been exposed to previously.
Mark the date on your calendar!
Scott Ficek is a Realtor with Re/Max Advantage Plus in Minneapolis and helps new and seasoned investors buy and own Minnesota investment property. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.
Tenant Love Letters
Maybe this isn’t the right title for these letters, but if you are a landlord for any length of time, you will get one. They are similar in concept to the “Dear John” letter that soldiers used to receive.
This tenant love letter is slightly different, it is usually sent with the rent check folded up in it. Typically it is used to explain why rent is late, but more often it is to explain why they have short paid their rent this month. Here is an example of one:
If you read the letter it starts off by saying: “I am sending you five hundred dollars [when the rent due is $800] and I will pay the rest of Oct rent on the 31st of Oct.”
At this point, you need to make a decision whether you are going to wait for the remainder of the rent ($300) or not. I believe the decision is going to depend upon their previous pay history, the condition of the apartment, time of year, and your motivation.
If I am not willing to wait, I can start the eviction in Minneapolis. Most likely, they will be out by Mid-November (assuming they don’t pay). I would then have to clean and prep the apartment for showings for a December 1 move-in. Although leasing apartments in December is possible (and has actually gotten easier with the low vacancy rate), it is not my favorite.
I have decided that I am going to wait and see if they follow through on their commitment. If they don’t, the next day, I am at court!
Scott Ficek owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email. He is also a Minnesota Real Estate Agent with RE/MAX Advantage Plus in Minneapolis and helps new and seasoned investors buy and own Investment Property.
Next Investment Property 101 Seminar
| November 18, 2008 | ||
| 6:30 pm | to | 8:00 pm |
Are you watching the prices of the investment properties around you fall like rocks? Are you still unsure how to get started with investment real estate? Attend this FREE one and a half hour seminar. There is no charge at all, no contracts you sign with us, no consultation fees, no hidden agenda. The seminar simply will be an excellent opportunity for you to learn more about our process and meet a team of investment real estate professionals that can hold your hand through the finding, financing, buying, renting and owning your first investment property.
Let our experience get you started!
Register for the seminar by filling out this quick registration form or call 612-281-5419 for more information.
