Cathyb's REI Journal

Today I had to go to landlord school. Our city participates in the Drug free/crime free multi housing program, and in order to get lisenced you need to take this landlording class. It was from 8am to 4pm. I thought it was going to be a complete bore, but it was actually quite good and had a ton of information that I really did need to know about. A policeofficer is the leader, and he is also a landlord, and EVEN he has some crappy tenants.
Some of the most important things are:

Screen, Screen, Screen and
Document, Document, Document

Seem kind of simplistic but very important. A lawyer came and spoke about leases, and terminology and the mn statute for landlord/tenants. We also had a woman who is the city's Section 8 liason and a fire investigator. We had another police officer talk about locks and lighting on rentals. Did you know that you can now buy a key pad entry for your doors? It can create a random entry code (based on ss#) so is unique to each individual and you don't have to change locks after tenants leave, you can just change the code! Very ingenious. Takes the place of a deadbolt I think. Even though it was along day, and I was getting a little antsy from sitting so long, it was a good day

Cathy

Deal, is not moving the seller cancelled our meeting for Friday, recheduled for Sat, now has cancelled that and resched. for Monday. In the meantime I have talked to the Success Academy and was reassured that desperate sellers are willing to leave money on the table to get out of the deal. After reading Randy's journal, I know I need to get with an attorney to get some of my paperwork done. Does anyone use Prepaid Legal? I think I'm going to join, it's kinda like legal insurance, yearly fee, access to lawyers in your town, without additional fees. Will review up to 10pages of documents for you. Sounds like it could pay for itself in after one use.

Cathy

Drove to the house that the buyer who wants to unload today. It is around 1hr 20minutes from my house. Brought my bro-in-law along. The house is nice and clean and has a lot of potential. It was built on clay, so settling has taken place over the last 10years and some landscaping needs to be done to keep the water flowing away from the property. My biggest problem with the property is the location. It is only commutable to the southern suburbs of Minneapolis, so it limits my buyers. I have put out some ghost ads, trying to see if I have any interest in rent to own. But have also put out an ad on the real estate investor club website, to possibly flip to investor. There is definitely money to be made on this prop. Will keep you posted.

Cathy,

How did you find out that the property was built on clay. Was this just due to noticing that settling had taken place?
I feel like it is a very simple question and I feel kind of embarrased asking but, hey, I'm new!

Roger

I asked the seller what kind of soil they have here, sand or clay? You can see the settling from the clay though, it's much more significant than sand. Thanks for stopping by my journal, It's kind of lonely being the only one posting on your journal.

Have been negotiating with the bank on a different property for my brother, one that wasn't stripped of everything. Unfortunately the bank and I are about 18k apart, and they rejected my last offer without countering. I called my brother and had the "come to Jesus" talk with him. I told him the banks last offer was at the very top of my price range, and there would absolutely be no money for repairs etc so he should continue to look at properties. Why does every child in the family need their own bedroom? His oldest is heading off to college next fall and one year later another will be off to college. College kids don't come home that much can't they make do with a 3 bedroom house instead of 4? He grew up in the same house he, didn't get his own room until he was 16 or so. I have 4bdrooms and 3 boys. One bedroom is big enough for two so the two closest in age are in there together. They like it, and don't want to be in seperate rooms. I'm rambling again. Anyway... I told him I would resubmit an offer to the bank again next week or so to see if they are interested in moving this property.

Called me about the "subject to" house I had listed on the REIA website. She said she was interested in it, but wanted to lease option it from me. I told her if she was planning on doing a sandwich lease, I don't allow subletting or assigning my leases. She said she has a tenant buyer currently living in the same town as my "subject to" and she is looking for a rent to own on a "newer" home. The house is 10years old. I offered one months rent if she brings me tenant/buyer that I place in the home, and she jumped on it. I think she new that she wouldn't be able to make that much money by sandwiching and getting a 100 month cashflow. Hopefully I will hear back from her soon. It can't be that easy can it?

Just got an email from my sister in law whom I affectionately call "Mrs Biscuits" because she is crackers! Been doing my best to try and buy a home for them, before they kicked out of theirs, but somehow I am not working hard enough or spending enough money! I won't tell you what she said to me in her email, but the top of my head nearly blew off, and if I hadn't called my sister to vent, my email reply would have created a MAJOR family rift. Thank goodness cooler heads prevailed (my sisters, not mine) My husband just laughed when I read him the email. I did forward the message to my bro, and told him he needed to respond to it. There is a rental rule out that I'm breaking isn't there, about not renting to relatives? It may be time for me to let this go and they can soldier on into the rental market and see what you can get for what they can afford to pay.

Glad all of you got everything smoothed out I've never heard of a law that says you can't rent to relatives but maybe that is so in your area. One of our cash buyers has 1 rental (he usually flips) and he is renting to a relative. However, when they pay the rent late because they are a relative he lets it go so there are times they'll get behind a couple months. I'm not saying this would happen in your case but just something to keep in mind.

You are getting a lot accomplished!

Lea
SPR Property Solutions, LLC

Seems you're having some real issues with the sister in law huh? Maybe she needs to be reminded you're HELPING them. If she thinks she can so a better job at finding that "perfect" house for them let her step in your shoes! It's hard to make family happy sometimes, hang in there. Good Luck.

I enjoy reading your journal, best wishes and much success to you!
Dawn

I didn't mean a law I meant an unwritten rule, cuz more than likely they are going to take advantage. Like how do you tell your brother and his 3 kids they need to leave because they haven't paid in 3months? Bad situation. The part my husband keeps telling me is going to happen is that this is supposed to be a rent to own situation and he "guarantees" that when the time comes they are going to move on and I will have a house I didn't really want, that I will have to sell because it is not in a place where I want to be. What I really want is the lake place they are currently losing. That has value to me because it's on water and I could actually use it. But they aren't interested in letting me try and buy the note from the bank directly. I still let them live there but there would be no rent to own.

deal is getting interesting. I am getting my paperwork together with the help of some dger's and trying to get with the seller. In the meantime, the investor got a hold of her buyer, and they did a drive by and she definitely want to see it. She is looking to buy soon, but since she has only been at her current job 3mos may not qualify for a while. So I could literally have this wrapped up in a week. Seller papers signed and lease option papers signed. With the 5k down the deal will have cost me 5k total and the net will be around 30+k. Probably shouldn't type that out loud may jinx it.

After the nasty emails my sister in law sent, I have decided that I am unable to help my brother and his family by purchasing a home that they can rent to own from me.

I got the O&E back from the title company, on the subject to deal (what does o&e stand for anyway?) and it turns out my seller hasn't been completely honest with me. He took a mortgage of 161k in 2004 then a line of credit for 63k a month later. He also has fed. tax lien for 15k, (that stays with the property doesn't it?) He told me he owed a total of 83k. he also has
Many credit card judgements, but I don't think those attach to the property do they? So, I called the seller and left him a message, letting him know what I found and told him to give me a call if things are different than what I am seeing on this report. I am not expecting to hear from him. I also called the other investor with the buyer and told them that I don't think this house is going to work for her buyer, and that the deal is not what it first appeared to be. I spent $125 for the o&e and 4 hours of my time, and do not regret a minute of it. I learned how to do a subject to, the paperwork involved and what questions to ask, (even though sellers don't always tell the truth) I think it was worth every penny.

I went to the MNREIA meeting early last night and met a new DG'er and Rina and her new neighbor Laura (formerly from NJ) Were there as well. I had to ditch early, but it was good to see them.

Signing the paperwork for my tenant/buyers soon they are planning on moving in May 1st. Once I have the paperwork signed, the bank is ready to do the cash out re-fi and I will have some money ready to go to the next one

Cathy,
I call a owner about a property and he said I'm liquidate some of my properties,Oh I see but the property I call about will be ready in three weeks. Its hit me I had some buyer for his property. I miss the sign too. But we learn something too.

The original tenant/buyers who were supposed to sign the lease agreement, ended up cancelling both appt we had set up to sign the papers and give me the option consideration. After the first cancellation I told them that I have no reason to hold this house for them because I don't have any money or signed contracts for them, he assured me they will be ready in a week, so we rescheduled for a week later and lo and behold two days before that sched. meeting I got a call from them saying they didn't have the money. I realized that this is what our rental relationship was going to be like. They are losing their house to foreclosure and haven't made a payment in I don't know how long, so I can't imagine where all the money is going. We recheduled the meeting but in the meantime I contacted all the people who inquired about it AFTER I accepted this couple, and let them know it was avail. Showed it 3 times that day, and the next day a lady I showed it to called and said she has her application finished and a check for $3k. Needless to say, after running her credit and background check I accepted her and she is moving in tomorrow. I felt bad about calling the other couple but they understood. So as of Friday April 23rd. I will have a tenant buyer in my rent to own property.

with the tenant buyer on Thursday, Gave her the keys and I'm assuming she is moved in don't know though. Can't wait to get my first rent payment!! Am getting some post cards ready for preforclosures, am having trouble with the 4closurealert website though. I've been busy, working at school, I am the propmaster for the school play that two of my boys are in so am treasure hunting for the props they need.

Hi Cathy,
How are you doing? It's been awhile since I commented here. I tried a couple of days ago with a very nice post in your journal but I disappeared into the matrix somehow. Obv I did something wrong. At any rate, I just want to say a big CONGRATULATIONS! on the tenant/buyer you got for your property. That monthly check will be very nice. It sounds like a deal that got done.
If you don't mind... send me a note regarding if your are successful with the cash out on the property against equity after the dust has settled. I am interested in doing something similar except that it is with our personal residence - a short sale townhome in Woodbury that we will be closing on either May 11 or May 13. We are paying cash but I would like to get a cash out against the equity and use the funds for further investing.
I am following right behind your steps now. I was accepted into the success academy just a few days ago so there is no lack of things to do that is for sure! And with EDGE2010 coming up in just three weeks... wow.

Roger

It's been a while since I posted. I haven't been lighting the REI world on fire. My kids are in the school play, and I signed up to be the prop master so I have been hunting props instead of real estate. I did go to a garage sale(looking for props) and asked if they were moving, but they said no. I was at a party last Sat. and started taling with my bro-in-law about realestated and I woman chimes in "I have a house you can buy" turns out her mom is losing a rental to forclosure because the tenants never paid. The house is in great neighborhoood, and even with the back payments, it will make a good subject to deal. We are meeting next week to look at the house and discuss details. And of course the big news was that I recieved my first rent payment in the mail on May 3rd. It was a very exciting day for me.

Cathy,

just read through your journal and it's great. how exciting. you are out there "doing" it. i hope you got to celebrate that first rent check. how fun.

Thanks for stopping by my journal. My celebration of the first rent check was smiling all the way to the bank!

Enjoyed just catching up your journal! You are doing amazing juggling life and RE together - a true challenge for all of us! Our meeting at the MNREA group was brief - but we will have plenty of time to chat at the EDGE! Almost here! Yay......

Just read through your journal from the beginning. I didn't realize how much you have been doing and dealing with, and how great thngs are going now! AWESOME! And congrats on your first rent check! NICE feeling, isn't it? (Wait til you get a whole bunch of them! )

I promise to keep up in here now. Thanks for sharing all your details. You are helping a lot of people overcome fears and move forward.

See you at the EDGE???

Rina

P.S. You were a Saint in the whole brother/sister-in-law thing! lol

at house mentioned above tonight, to get a sense of repairs and am hoping to find out what is owed overall and what total would be to get them caught up.
I have also been calling banks to try and get a cash out re-fi on my first property, the original bank I had lined up no longer does one, but I have found 2 that do cash out re-fi without seasoning, although the LTV is only 70%. The house I am looking at tonite would be done as a subject to, and I am excited. I already have a couple people interested in lease optioning it.

Hi Cathy,

Sounds like you are having to be very efficient with your scarce time lately! Good job just to keep moving ahead. Regarding cash-out re-fi.. lauraj stopped by my journal and mentioned Rina is the cash out re-fi Queen! I am looking forward to hearing Rina at E.D.G.E. 2010. Just that comment from laura encouraged me to dig a little deeper and I have since found a reputable Mtge Broker willing to do an 80% out on my townhouse "any time you are ready!". So that put some more wind in my sails. Not that I really needed it~!

Roger

I made an offer on a an MLS listing 'free and clear" house on friday. I offered them an almost full offer but on contact for deed with great terms (for me) AND I also offered them an all cash low ball offer. My RE presented the offer to the sellers herself, (no faxing it over) because we both wanted to be sure that the understood each offer. Should hear something today. I did go check out the house in forclosure, needs carpet and paint and some doors/doorknobs. Don't understand why people take the doorknobs when they leave. Am hoping to get everything with this house finalized this week before I take off for the EDGE. Yeah!

that is awesome. since i'm a realtor, i'm trying to figure out how to mesh investing with being a realtor. whew! i love the comment about people taking the doorknobs. i started laughing out loud at that. people come up with the funniest things. have a great time at the EDGE.

Finalized the sub2 on the house mentioned above. I now actually have a buyer for this house but don't want to tell her until I get it locked up. Made an offer on a "free and clear" mls home. Offered them close to asking price on a contract for deed (even though it was overpriced) and ALSO offered them a low ball cash offer. They turned me down. Will wait and see on that one. Am going to look at two more houses today and see if I can get some offers in before edge event. Leaving tomorrow morning....I cant wait!!!

Hey there!! So fun hanging out with you at The Edge! Loved it!

I finally finished reading your whole journal this morning and I have missed out the past few months!!! WOWOW! You have so much going on, and have a renter in your property....(I know, I know, I'm so late to read this stuff!!) That check must have felt awesome! A much belated congrats to you!

Keep us posted on the sub2. Exciting stuff.

Thrilled for you.

We're making the stage next year, yes? Deal.
Louisa
p.s. I loved your "dear sweaty" story....it has made me laugh out loud just thinking about it at random times. Hilarious.

I owe you Cathy B from Cathy L a huge apology for not keeping up with your journal. I see your name everywhere wondering who this Cathy B is and now I know. I enjoyed meeting you at the Edge. That was the best. And I too give you a BIG CONGRATULATIONS on that first rent check. I understand completely the outside obligations and doing REI too. It was great that you helped with the school play. I have yet to read it from the beginning but I will be sure to do that and very soon. I have a big to do list after this event as I'm sure we all do. I wish you the very best.
Blessings,
Cathy L

Thanks for stopping by enjoyed both of you at the EDGE.

Cathy L you do not owe me an apology, your here now aren't you. Can't wait to see what you will do now, with your newfound confidence and knowledge from the EDGE.

Louisa, save me a seat next to Dean!