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Tenant Thursday - Bed Bugs in Baltimore.  Ever heard of bed bugs? Yup, they're for real, and they are a real problem.  The cost and inconvenience of removal is enormous.

Last year, one of my tenants in a multi family unit had a bed bug problem.  As an accomodation, I treated the property using a licensed professional and the property was cleared of bed bugs.  The tenant claims they complied with all of the instructions provided to them by the pest removal service.

Fast forward, one year later.  The tenant has bed bugs again.  Fortunately, it is only this one unit.  The other units in the property are bug free.

The tenant works in Baltimore City, and is in and out of the city's high rise project homes.  These homes are notorious for their rampant bed bug infestations.

I've checked with the Baltimore County Department of Health and was referred to the Maryland Department of the Environment who told me to again check with the Department of Health.  I've given up, and am checking with my attorney.

In the meantime, I'm interested in your opinion - in this scenario, who should undertake the expense of this second infestation?

Tenant Thursday - Maryland Real Estate Investing Advice. A Weekly Series on handling Tenant issues when investing in Real Estate in Maryland.

It doesn't happen, often, but it does happen.  You have a disagreement with a tenant over refunding a security deposit, or backing out of a lease, or other financial matters, and the tenant says It - "I'm calling my attorney!"

A novice investor could be concerned about such a threat.  I've had my share of such confrontations in my experience as a Real Estate Investor, and I can tell you that in my opinion, 9 out of 10 times the tenant is not going to call an attorney.

And what about in the rare instance where a tenant does call an attorney?  What is the first thing the attorney is going to ask for?  The presiding document.  In this case, it is going to be your lease.

What you and the tenant have agreed to in writing takes precedence over any other ‘agreement' the tenant may claim you have made with them.  Know the terms in your lease.  Know them before a confrontation arises.  Stick to the conditions you've outlined in your lease, and make any amendments in writing.

If you'd like more information on investing in Real Estate in Maryland, feel free to contact me.

Photo credit: http://www.flickr.com/photos/umjanedoan/497345293/

Tenant Thursday - Maryland Real Estate Investing Advice.  A Weekly Series on handling Tenant issues when investing in Real Estate in Maryland.

Want to hear a tenant mess?  Two friends who want to be roommates, sign a lease for an apartment.  Shortly after they are settled, Tenant One decides to let his girlfriend move in.  His roommate, Tenant Two, hates the girlfriend and decides to move out.  I continue to get the rent, but then a month later, Tenant One kicks the girlfriend out and is no longer able to afford the apartment.  Tenant One said I could have the security deposit, but that he doesn't want a judgment, bad credit or a bad reference from me.

In the meantime, Tenant Two would like to move back in to the apartment, but would like to have Tenant One's name removed from the lease.  The only problem is that Tenant Two wants to add someone new to the lease - a new roommate - who has bad credit.

As a Landlord, how would you handle this situation?  Email me to find out how it all got resolved.

If you'd like more information on investing in Real Estate in Maryland, feel free to contact me.

Photo credit: http://www.flickr.com/photos/umjanedoan/497345293/

Thursday Q & A - Your Maryland Real Estate Investing Questions Answered

Q:  What expenses should I plan for when selling an investment property that I have rehabbed?

A:  The only way to handle this is to Do Your Best to Plan for the Worst.  You need to know ahead of time how far you are willing to go to help the Buyer buy this home.  Will you offer:

• Maximum Closing Costs (Currently FHA loans allow up to 6% of the purchase price, and VA is unlimited)
• Seller Financing
• To make necessary improvements

Keep in mind the current market conditions and what they call for.  If you would like a detailed list of settlement expenses for your investment property, or help in making a plan to sell, please feel free to contact me.

Thursday Q & A - Your Maryland Real Estate Investing Questions Answered

Q:  I've found a property that seems like a really good investment deal.  The only problem is that the Seller wants a quick settlement and doesn't want a lot of contingencies in the contract, or to have to do any bank related repairs.  Is it still a good deal?

A:  Is it still a good deal? It could be, however, it's only as good as what you can sell it for later.  This has a direct effect on what you're buying it for now.  If the Seller doesn't want any contingencies, tell him you have to have an inspection and that you'll take a few DAYS to get it done.  That way, should anything come up, you're done with it quickly and both you and the Seller can move on.

Buying your first investment property can be tricky.  If you have questions, or need advice, please feel free to contact me.

Thursday Q & A - Your Maryland Real Estate Investing Questions Answered

Q:  I'm thinking of purchasing an investment property that was built in 1942.  What are the concerns about lead based paint?

A:  Any property built before 1950 has to be registered with the EPA because of the concern over the presence of lead based paint.  There are still Agents listing properties and representing Sellers that haven't taken this step.

My advice:  if you are purchasing a pre-1950 property as an investment property, make the Seller register the property with the EPA.  Otherwise, you  could be buying a lead paint problem.  AND...if there is a tenant in the property, you are putting yourself in a legally vulnerable position.

If you'd like more information on investing in Real Estate in Maryland, please feel free to contact me.

Thursday Q & A - Your Maryland Real Estate Investing Questions Answered
Q:  How do I go about purchasing a home at foreclosure auction?

A:  So far we've talked about due diligence, and what to do on the day of the auction.  Today, it's time to talk about the Bidding Process.  The most important part of the Bidding Process in a Foreclosure Auction is keeping your emotions in check.  The Auctioneer's job is to get people to pay more money for the home.  You've got to be able to keep your head on straight and remember that this home is an investment - you're not going to live there.

Before you go, know exactly how much you are willing to pay at the foreclosure auction.  If you're not comfortable committing to a specific number, have your ideal number in mind, and consider going a specific percentage above that number.  Use this method to figure out the most you are willing to pay for this home, and don't go $1 over this number.

It is especially important at a foreclosure auction that the auctioneer reads the entire ad.  Request it if you have to.  In the case of a foreclosure auction, if you purchase the home for less than market value (which you'd really like to do), the Homeowner can dispute the auction process (particularly if your purchase price is drastically less than market value).  My attorneys have explained to me that in cases like this, that a Judge will probably rule in favor of the Homeowner because the process wasn't followed, and the auction will be invalid.  Judges don't want to see people losing their homes if they don't have to.

The Bidding Process begins after the reading, and it goes very quickly.

If you'd like more information about purchasing a home at foreclosure auction in Maryland, please feel free to contact me.

Thursday Q & A - Your Maryland Real Estate Investing Questions Answered

Q:  How do I go about purchasing a home at auction?

A:  Last week, I talked about some of the due diligence you need to perform before the auction.   On the day of the auction, you need to be prepared as well.  You'll need to have a deposit check in certified funds for the amount listed in the auction notice.  You'll need to give yourself plenty of time to get to the auction.  Don't be late - the auctions happen very quickly and if you're just two minutes late, you could have missed your opportunity.

On the way to the auction, call the auctioneers at least twice to see if the auction has been cancelled.  Many times the auctions are cancelled at the last minute and it can be a big waste of your time if you get to the courthouse and the auction is off.

Preparation to buy a Maryland home at auction is essential.  If you're a first time investor, knowing what to expect can help lead you toward success.  Next week:  The Bidding Process.

Thursday Q & A - Your Maryland Real Estate Investing Questions Answered

Q:  How do I go about purchasing a home at auction?

A:  The first word that you need to think about if you are going to buy a property at auction is preparation.  For instance, if you're going to a foreclosure auction in the great State of Maryland, they happen at the courthouse steps, not at the property.  So you don't get a chance to go in the property to see it before you buy it.  In fact, you probably run the risk of great bodily harm or death if you go to the home.  If you go to someone's home to view it or ask questions, they're probably not going to be happy that you're trying to profit from their misfortune.

That being the case, in a foreclosure auction, there's plenty of due diligence to be done.  Here are just a few that I would do:

• What's sold in the area recently, and how it compares in age, square footage and condition
• You can find out how many mortgages the Seller has, because it may not be worth your while if they owe more than the value of the property.  In these cases, the bank usually takes them back.
• You want to find out if the taxes have been paid

This is a short list of a much longer list that I'll be blogging about over the next several weeks.  If purchasing a foreclosure property at auction is of interest to you, be sure to subscribe to this blog to follow the Thursday Q & A conversation.

And if you're an experienced investor, what diligence do you perform before an auction? 

Q:  I've purchase a home once already, and I did pretty well in the deal.  What's so different about buying an investment property?

A:  I've said them all before, but I will say them here again.  The differences seem simple:

• You do not fall in love with an Investment Property
• You do not fix up an Investment Property the way you would fix up your own home.
• An Investment Property is all about the numbers.  Unlike your home, whose primary function is to be your residence, an Investment Property's sole function is to make you money.  There is no other purpose.

It seems simple.  You would be surprised once you get caught up in the emotion how quickly you might forget these things.

If you're ready to purchase an investment property, give me a call.  I'll help bring you back to reality and determine if your excitement is based on the numbers, or on the emotion.