Real Estate 101 and Beyond

Considering the shortage of money and abundance of bad credit it’s no wonder these two terms are coming up more often. I’m not here to teach you how to broker either one of these deals, but rather just set you straight on what they are, define/clarify some terms   and offer my input on   some of the benefits, risks, etc. First and most importantly , let’s get the language down first.   A subject to deal is not the same as an assumption which also means the terms are not interchangeable.   Please… stop doing this. You will get yourself into major trouble by promising a deal using one term when what you are really intending to do is another – innocently or not. SUBJECT TO MORTGAGE A subject to deal is when you agree to purchase a property subject to the existing mortgage already attached to the property. This means the existing loan will not be satisfied at closing. In a conventional deal, that existing mortgage would be paid off at closing and a satisfa...

If you are not familiar with the new CFPB requirements you better get that way. Any closing involving a loan will be very different. As a real estate agent, investor, closer, attorney, etc., get ready. If you are prepared the transition will be much smoother.   As a result of these CFPB requirements taking effect October 3 rd , the Far-Bar As-Is Contract all investors know and love has changed. The changes to be noted and things to consider are as follows: I. When to use the new Far Bar As-Is Contract The new Far-Bar should be used on any deal in which Buyer will be submitting an application for a loan on or after October 3 rd   .  Keep in mind, “any loan” involves those loans with conventional financing. This does not apply to private or hard money loans. II. What Has Changed In order to keep this blog from being pages and pages long let me caveat this section by saying that I am giving the very short version of what has changed in each section. You must r...

So, your broke tenant who hasn’t paid you in 3 months has apparently abandoned the unit, and the neighbors say they saw the tenant carrying out boxes in the middle of the night. You take a peek and see that the place is cleared out except for an old mattress on the floor, a huge poster of a unicorn on the wall and a box of toiletries in the bathroom. You’re thinking, “What a stroke of luck!” and you start marketing the property for a new tenant. Not so fast.  While you may think this is a pretty cut and dry issue, you need to at least consider the law of abandonment of the premises. Florida Statute 83.59(3) (c) sets forth how to determine if a unit has been abandoned : In the absence of actual knowledge of abandonment, it shall be presumed that the tenant has abandoned the dwelling unit if he or she is absent from the premises for a period of time equal to one-half the time for periodic rental payments.  However, this presumption does not apply if the rent is current ...

I am honored to announce that I have been asked to sit on the panel dealing with land trust at the Seminole County Subchapter Meeting for the Central Florida Real Investors Network on September 9th. For more information and to sign up for the meeting please visit the CFRI Subgroup Page.

As promised, this is going to start off a short series on the FAR BAR As-Is Contract. I was feeling bad about how long it has taken me to get a new post on here, but it turned out for the best. Last week I gave a short little presentation on the As-Is to a group of investors at the Leverage Connections Network Meeting and the questions from the attendees were fantastic. Their questions made me more aware of what content will be helpful for newbie investors – and some more experienced ones who may have gotten a little lazy. Sorry, truth hurts. Before we get into the terms of the contract let’s first have a quick little discussion about what using an As-Is Contract means. An As-Is offer means the buyer accepts the property in its current As-Is physical condition. That means if the house has a bad roof buyer accepts the responsibility of that roof. It does not mean buyer accepts the fact that there is an open roof permit pulled to fix the roof or that there is a code lien on the p...

I recently jumped back into the eviction arena after taking a break from all litigation in order to start my family. I was very hesitant to do so because the last time I filed an eviction in Central Florida it was a very tenant friendly environment where landlords were villainized, tenants’ requirements under the statute were completely ignored and judges threatened attorneys and property managers with contempt of court. It had become an area of practice where my law firm was losing money because tenants knew they could file any old thing and drag out an eviction if there were willing to show up for hearings. When the new landlord tenant statute changed I read it over to compare the old with the new and was totally surprised at the changes. I blogged about some of these changes in an earlier post which you can see here http://richardslawfirm.blogspot.com/2014/09/new-landlord-tenant-statute-seriously.html . Even with the landlord friendly changes I was still hesitant, but one of ...

I am the biggest advocate for land trusts you will ever meet. I have successfully used them in so many scenarios that have made deals, saved deals and killed deals (on purpose) that there is no way anyone is going to successfully argue with me that land trusts are not one of the best tools available for real estate investors. Hands Down. With that said, anyone that knows me will, I hope, say that I am a pretty straight shooter. So, today, I am going to admit that there are two sides to every coin and will discuss a few of the negatives. Negative #1: Hazard insurance is more expensive when property is held in a land trust. Some clients tell me the price difference was enough to steer them away from land trusts completely while others have said it wasn’t that big of an issue. I believe it all depends on your agent. Like everyone else on your team, make sure your insurance agent is investor friendly. Negative #2: Some counties will require that an attorney file an eviction o...