Wednesday, August 30, 2006
Did you ever have to eject a tenant for non-payment of rent, and then get stiffed for the bill? You might be able to gather what is owed to you, even years later.
First, you require a court-ordered money judgment. If you filed for an expulsion in court, you received a judgment and order of possession. The real name of this court order might modify slightly from state to state, but it's the same thing - a document signed by a judge that allows a local sheriff or constable to compulsorily remove the tenants from the property.
In most states you could also get a money judgment against the tenant, but this requires one of two things:
1) The tenant should have been personally served with the court papers
2) The tenant should have shown up in court. If the eviction papers (the court papers, not the notice to pay rent) were posted on the door of the unit and/or mailed to the tenant, you usually do not get a money judgment from the court.
What about Security Deposits?
If you have a safety deposit from the tenant, you could apply that against anything he owes you for back rent or damages. However, you still should comply with state law for notifying the tenant of your aim to keep the deposit. Even if you return the security deposit, you could still charge the tenant for actual rent payable and/or damages incurred to the unit.
If the tenant left before the court date or you did not otherwise obtain money judgment, you could always sue the tenant in your local small claims court for money payable and any damages to the property. The process is quite easy, and does not require a lawyer. You have to file the claim before the end of the decree of limitations, which usually ranges from three to six years, depending on which state you live in.
Once you have a money judgment, you could collect it against all non–exempt assets of the debtor. Certain assets, such as retirement accounts, are excused from collection by creditors. Also, keep in mind that assets of the debtor's spouse might be attached as well in states that recognize community property (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin).
Tuesday, August 22, 2006
The real estate agents have a precious source of potential deals for the real estate investor - the Multiple Listing Service. Unfortunately, real estate agents have a control on this information, so they might be a necessary part of an investor's game plan.
Dealing with real estate agents could be hard as an investor. Agents prefer home buyers with cash to put down, fine credit and conventional buying power. Their interest is getting a commission with as little hassle as possible. Most agents have never done a creative real estate transaction with an investor, so they are not frequently open to unusual offers. Most agents associate a "nothing down" offer with a buyer who is not serious.
Offer a sensible Earnest Money. You cannot present a bid with a $50 earnest money and expect an agent to take you seriously. You could expect to pay at least $500 as earnest money to get their attention. If you are presenting a solid cash bid, you must put up more money. If you are worried with losing your earnest money, consider using a promissory note.
Appeal to the Agent’s Greed Factor. Real estate agents are in the game to make money, just like anyone else in any other business. If you could offer the agent an incentive to make money out of the deal, you would get his cooperation. If you present a bid which does not allow sufficient cash to come out of the deal to pay the agent, why will he cooperate with you? If you present a lease/option bid on a listed property, how would the agent receive a commission? You require finding a way for the agent to get paid, even if you pay him out of your own pocket.
Fax first round Offers First. Don't waste your time filling out a deal bid until you have preliminary approval. Most agents are not this formal and would take any offer in writing to the seller. Simply sum up your offer in writing and fax it to the listing agent. Once you have an oral endorsement, and then take the time to fill out a contract and an earnest money check. Never put up earnest money until the bid is accepted!
Don't be bullied by unhelpful Agents. If you cannot skill an agent, don't be afraid to stand up to him. Some agents are immoral and would refuse to present your offer. Many times the agent would lie and tell you that your offer was rejected when, in fact, it was by no means presented. If this is the case, do not be scared to go over his head to the listing broker. If the listing broker is unhelpful, contract directly with the seller (unless, of course, you are also an agent).
Dealing with real estate agents could be hard as an investor. Agents prefer home buyers with cash to put down, fine credit and conventional buying power. Their interest is getting a commission with as little hassle as possible. Most agents have never done a creative real estate transaction with an investor, so they are not frequently open to unusual offers. Most agents associate a "nothing down" offer with a buyer who is not serious.
Offer a sensible Earnest Money. You cannot present a bid with a $50 earnest money and expect an agent to take you seriously. You could expect to pay at least $500 as earnest money to get their attention. If you are presenting a solid cash bid, you must put up more money. If you are worried with losing your earnest money, consider using a promissory note.
Appeal to the Agent’s Greed Factor. Real estate agents are in the game to make money, just like anyone else in any other business. If you could offer the agent an incentive to make money out of the deal, you would get his cooperation. If you present a bid which does not allow sufficient cash to come out of the deal to pay the agent, why will he cooperate with you? If you present a lease/option bid on a listed property, how would the agent receive a commission? You require finding a way for the agent to get paid, even if you pay him out of your own pocket.
Fax first round Offers First. Don't waste your time filling out a deal bid until you have preliminary approval. Most agents are not this formal and would take any offer in writing to the seller. Simply sum up your offer in writing and fax it to the listing agent. Once you have an oral endorsement, and then take the time to fill out a contract and an earnest money check. Never put up earnest money until the bid is accepted!
Don't be bullied by unhelpful Agents. If you cannot skill an agent, don't be afraid to stand up to him. Some agents are immoral and would refuse to present your offer. Many times the agent would lie and tell you that your offer was rejected when, in fact, it was by no means presented. If this is the case, do not be scared to go over his head to the listing broker. If the listing broker is unhelpful, contract directly with the seller (unless, of course, you are also an agent).
