This was just sent to me from one of our leading Real Estate Attorneys. I thought I would share for those of you who are still a little confused on the what is happening for the Landlords in Michigan.
To Your Success,
Wendy
This latest development in the ongoing health emergency comes as no surprise. The complete text of the temporary order is below. Here is the latest information and advice from Piper Legal.
#1. Do not slow your process down. If the rent is unpaid send a notice. The order specifically requires notice to be mailed – no personal delivery. A tenant who does not receive a notice of unpaid rent will assume the order halts rent payments, it does not. The order temporarily suspends the end of line enforcement mechanism: execution of the order of eviction (“writ”).
#2. Most Courts remain open. The Michigan Supreme Court has left the decision to close courts up to the local Chief Judge (by county). You should continue to turn over cases. Our office will provide you property specific status updates via email.
#3. When the Governor’s order is lifted (currently April 17, 2020) the standard processes and time frames will still apply. Do not get behind. The order does allow extensions for deadlines affecting current judgments or pending writs.
#4. By doing steps #1 and #2 you will be in the best position to maintain your cash flow, avoid a vacancy and ensure your tenant has a roof over their head.
Piper Legal
601 S Saginaw St Ste 202
Flint, MI 48502
(810) 235-2558
Please see order below
EXECUTIVE ORDER No. 2020-19
Temporary prohibition against entry to premises for the purpose of removing or excluding a tenant or mobile home owner from their home
The novel coronavirus (COVID-19) is a respiratory disease that can result in serious illness or death. It is caused by a new strain of coronavirus not previously identified in humans and easily spread from person to person. There is currently no approved vaccine or antiviral treatment for this disease.On March 10, 2020, the Michigan Department of Health and Human Services identified the first two presumptive-positive cases of COVID-19 in Michigan. On that same day, I issued Executive Order 2020-4. This order declared a state of emergency across the state of Michigan under section 1 of article 5 of the Michigan Constitution of 1963, the Emergency Management Act, 1976 PA 390, as amended, MCL 30.401-.421, and the Emergency Powers of the Governor Act of 1945, 1945 PA 302, as amended, MCL 10.31-.33.
The Emergency Management Act vests the governor with broad powers and duties to “cope with dangers to this state or the people of this state presented by a disaster or emergency,” which the governor may implement through “executive orders, proclamations, and directives having the force and effect of law.” MCL 30.403(1)-(2). Similarly, the Emergency Powers of the Governor Act of 1945 provides that, after declaring a state of emergency, “the governor may promulgate reasonable orders, rules, and regulations as he or she considers necessary to protect life and property or to bring the emergency situation within the affected area under control.” MCL 10.31(1).
The current state of emergency would be exacerbated by the additional threats to the public health related to removing or excluding people from their residences during the COVID-19 pandemic. To reduce the spread of COVID-19, protect the public health, and provide essential protections to vulnerable Michiganders, it is reasonable and necessary to provide temporary relief from certain eviction-related requirements and to temporarily prohibit the removal or exclusion of a tenant or mobile home owner from their residential premises, except in extreme circumstances.Acting under the Michigan Constitution of 1963 and Michigan law, I order the following:
GEORGE W. ROMNEY BUILDING • 111 SOUTH CAPITOL AVENUE • LANSING, MICHIGAN 48909 www.michigan.gov
PRINTED IN-HOUSE1. Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, no person shall remove or exclude from leased residential premises or residential premises held under a forfeited executory contract a tenant, a vendee of a forfeited executory contract, or a person holding under a tenant or vendee, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. This order should be broadly construed to effectuate that purpose. This section is effective immediately and continues until April 17, 2020 at 11:59 pm.
2. Nothing in this order is intended to abrogate the judicial power, which is vested exclusively in this state’s one court of justice by section 1 of article 6 of the Michigan Constitution of 1963. This order does not affect the inherent power of a judge to order equitable relief.
3. Nothing in this order shall be construed to abrogate the obligation to pay or right to receive payment due under a lease, nor the obligations and duties prescribed by sections 5716 and 5718 of the Revised Judicature Act (“RJA”), MCL 600.5716 and 600.5718. Effective immediately and continuing until April 17, 2020 at 11:59 pm, demand for payment may not be served by personal delivery.
4. Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, no person may enter residential property in order to remove or exclude from the premises a tenant, a vendee of a forfeited executory contract, a person holding under a tenant or vendee, or the personal property of a tenant, vendee, or person holding under them, including pursuant to a writ authorizing restoration of a plaintiff to full, peaceful possession of premises under section 5744 of the RJA, MCL 600.5744, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. This section is effective immediately and continues until April 17, 2020 at 11:59 pm.
5. Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, a sheriff, under-sheriff or constable, deputy, or other officer must not serve process requiring forfeiture of leased residential premises or residential premises held under a forfeited executory contract. Any requirements to that effect imposed by the RJA are suspended. This section is effective immediately and continues until April 17, 2020 at 11:59 pm.
6. Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, no person may deny a mobile home owner access to their mobile home, except when the mobile home owner’s tenancy has been terminated because the mobile home owner poses a substantial risk to another person or an imminent and severe risk to property. This section is effective immediately and continues until April 17, 2020 at 11:59 pm.
7. Until thirty (30) days after the restrictions on eviction provided by sections 1 through 6 expire, any statutory limits on the court of this state to adjourn any proceedings, toll any redemption periods or limitations periods, or extend any deadlines are suspended.
8. As used in this order, all terms have the meaning provided by the Revised Judicature Act of 1961, 1961 PA 236, as amended.
9. Consistent with MCL 10.33 and MCL 30.405(3), a willful violation of this order is a misdemeanor.
10. A copy of this order will be transmitted to the State Court Administrative Office.
Given under my hand and the Great Seal of the State of Michigan.
Date: March 20, 2020 Time: 4:09 pm
GRETCHEN WHITMER GOVERNOR
By the Governor:
___________________________________
SECRETARY OF STATE
Author: Wendy Patton
Sandwich Lease Options – Details of the Paperwork
The sandwich lease options concept is pretty straightforward and easy for most investors to understand. However, there are a lot of details that go into the paperwork the needs to be drawn up. Here, I bring to your attention some of the most important requirements that go into sandwich lease options.
I’ll begin by sharing how I organize the paperwork. For sandwich lease options, I establish two separate files. The first is for the paperwork involving the seller. This contains all of the paperwork the seller and I will be signing. The second file includes all of the paperwork that the end buyer (my tenant) and I will be signing. Both of these files go into the same folder that I title with the house address. Nice, neat and tidy. Everything for sandwich lease options is easy to find when needed.
Sandwich Lease Options – Three Main Documents
The three main documents can be reduced down to one or two documents but everything remains clearer as to the intent when they are written as three distinctly separate documents. The primary documents for sandwich lease options are:
- Rental/Lease Agreement
- Sales Agreement
- Option Agreement
You’ll need at least four copies of each. You need one set of two for you and the seller and a separate set for you and the end buyer. I prefer for everyone to have their own copies with original signatures.
Both sets of paperwork will be close to the same but there will be important differences. Most notably, the different dollar amounts that determine your profits from sandwich lease options. One important difference is you’ll require the seller to maintain insurance on the house and put you on the policy as “additionally insured”. You will also want the seller to sign off on an “Affidavit of Liens”, a “Sellers Disclosure”, and “Bank Authorization”.
Protecting Yourself and Your Tenants in Sandwich Lease Options
Although you have the seller sign an “Affidavit of Liens”, you still want to have the title researched to be sure there are no liens or that you at least know what the liens are. In most states (probably all states), you cannot purchase title insurance because with sandwich lease options, your name is not on the title. That is the reason for the “Affidavit of Liens”. It says that the sellers are not aware of any pending liens and that should any arise, you will be formally notified. You can never be sure that the seller didn’t recently have major repairs made to the septic system and failed to pay for it.
The title work will also show the names of all owners on the title. More than once, there has been a divorce involved where one spouse has full ownership in the divorce paperwork but the title was never cleaned up. Something else I prefer to do is have both the wife and husband (all owners) sign even when only one of their names appears on the title. The name is different in various states but there is something called “dower rights” that give both spouses rights to the house even when only one of their names is on the title.
Something else that is vitally important to sandwich lease options is recording the “Memorandum of Option” with the county. It’s not good enough to only have this document notarized. Recording it with the county puts the world on notice that you have a legal interest in the title. This makes it almost impossible for the current owner to refinance the home or sell it without your signed approval.
The paperwork is vital to your successful ability to create sandwich lease options, so don‘t skip any steps. Until you have several successful sandwich lease options under your belt, you need to have the paperwork reviewed by a competent attorney before signing it.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Options System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
If you found this information useful, please visit again soon at wendypatton.com.
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What did you think of this article? Please leave a comment below.
Rent to Own Properties
I continue writing about rent to own properties because this is the best win-win scenario that you will find without a full purchase price cash out on a property you are selling. Also, when it comes to rent to own properties, there are so many possible variations to how the contract is written that it’s worth highlighting different variations from time to time and repeating some as the readership grows.
One important key to rent to own properties is that the buyer has a reasonable chance of improving his or her credit score to the point of qualifying for a mortgage. The down payment usually isn’t as big of issue because most of that should be covered by the option to buy fee being applied to the down payment.
Rent to Own Properties Agreement
What leads to successful rent to own properties deals is a solid and detailed agreement. The three most important provisions of the contract are the price of the home, the cost to rent until the purchase is completed, and the deadline to complete the purchase. Also, what the option fee is and how much will be applied towards the down payment.
Other important language needing to be in the contract is exactly who is responsible for repairs and maintenance during the rental period. Often, the buyer/renter is responsible for routine repairs and maintenance but this should be spelled out in detail. For instance, the seller should maintain insurance on rent to own properties until the sale is final. Therefore, a major cost such as a tree falling on the house should be the responsibility of the seller. However, replacing a worn out refrigerator is the responsibility of the buyer. This can be written into the contract as a dollar threshold along with an agreement of how the dollar value of a repair is determined.
Something else to consider is if additional funds will be applied towards the purchase price. In the past, this has sometimes been a portion of the rent. Clearly keeping the rent payments separated from purchase payments is best done when the buyer/renter writes two separate checks for the rent and any money to be applied towards the purchase.
Two Basic Rent to Own Properties Arrangements
The most common rent to own properties arrangement is a lease option. This typically involves a lease option fee of between 3 and 5 percent. The lease option time frame is typically between one and three years. The buyer/renter has the option to buy but is not required to complete the sale. However, the option fee is forfeited if the buyer does not complete the transaction. The seller cannot sell to anyone else during the lease option period.
The other basic rent to own properties arrangement is the lease purchase. In this less common scenario, the buyer/renter is required to complete the sale. This arrangement provides the seller with more security that the sale will be completed. However, it’s not absolute security because the entire deal still relies on the renter/buyer being able to qualify for a mortgage from a third party. This arrangement does place the renter/buyer at higher financial risk because if he or she fails to complete the sale within the allotted time, a civil lawsuit for failure to complete the contract can be brought against the renter.
The best rent to own properties usually involve a buyer that is on the cusp of being able to qualify for a loan. Their score is only slightly below the requirement and they have a solid plan to bring it up to qualify within a short period of time. It’s a good idea for the buyer to work with a mortgage broker to learn the quickest way his or her credit score can be improved before signing the lease to purchase contract. That’s what makes win-win rent to own properties.
Real estate investing does not need to be about owning as much property as possible. It should be about controlling as much property as possible for the least amount of money and risk. That makes the Sandwich Lease Option the most attractive investing method I know of. You can take control of the property for a couple of hundred dollars. You then put an option buyer in place that takes on most of the homeownership responsibilities until they make the purchase and take on full ownership responsibility. The Sandwich Lease Option let’s you make a big profit for a small investment. This is the method that I highly encourage my students to use.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
If you found this information useful, please visit again soon at wendypatton.com.
For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.
What did you think of this article? Please leave a comment below.
Cash Out or Reinvest
There are many ways to raise money to invest in real estate. Or if you already own investment real estate, you could decide to sell and cash it out. The question is if you should cash out or reinvest? Before you answer that question, you need to ask yourself what you will do with the money if you cash out. You could use the money to fund a retirement account like a 401k or IRA but then you still need to find a way to invest and grow that money.
![Save-Money[1]](https://wendypatton.com/wp-content/uploads/2014/12/Save-Money1.jpg)
Do you want the money in the stock markets where a self-serving financial adviser is making your investment decisions or at the least, a self-serving board of directors makes all of the financial decisions for a corporation that you personally make a decision to invest in? When making the decision to cash out or reinvest, you could use the money to start you own business. At least you’d still be in control. One thing you almost certainly don’t want to do is put the money in CDs or a saving account paying less than the rate of inflation.
Cash Out or Reinvest? – Reinvest
You could invest in gold as many people have done over the past few years as a hedge against hyperinflation. So far, the hyperinflation hasn’t materialized and as the economy has stabilized, the value of gold has declined over the past few years. Real estate is what has been appreciating those same years, out-pacing inflation.
Deciding to cash out or reinvest leans heavily towards reinvesting. When your investment property is appreciating in value and turning a positive cash flow monthly, the logical decision should be to stay in real estate. What you should do is take the time to study the current market. Ask yourself if your current investments are the best investments you can be holding? When it comes to the cash out or reinvest question, the real question is if your current investments are the most profitable that you can be holding.
Cash Out or Reinvest – Find Something More Profitable
First, look at your least profitable investment property. Can you sell that property to invest in one that is more profitable? Maybe, you don’t even want to sell your least profitable. Can you use existing properties to cross-collateralize a new investment property to further grow your real estate empire? As I’ve said often, real estate investing isn’t about fully owning the most properties; it’s about controlling the most properties. Using existing properties to finance another property could well be your best answer when deciding to cash out or reinvest.
Let’s say that you have an investment property that currently has about a $150,000 mortgage. It’s a 15-year mortgage but you can pull $25,000 of equity out by refinancing. That will raise the cost of the monthly payment on that property by about $35. If that property is worth keeping, it’s certainly paying much more than $35 a month in positive cash flow. Now, you use that $25,000 cash out to invest in another positive cash flow property. This is truly leveraging your investment money because you end up with another profitable investment and another property that is appreciating in value.
What is always smart is to be constantly asking yourself if it’s better to cash out or reinvest. Too many investors get into a property and forget about it. They go year after year without asking themselves if there is a better investment opportunity that they should be pursuing. Or if they should be looking for ways to leverage the investment money they already have. From my experience, even part time investors should be looking for a new real estate investment opportunity about every 18 months. Not only do you have the opportunity to leverage your money, but the more real estate that you control, the more your investments are diversified.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
If you found this information useful, please visit again soon at wendypatton.com.
For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.
What did you think of this article? Please leave a comment below.
Making the Leap to Commercial Property Investing
If you have experience in residential real estate investing, now is the time to consider moving up to the investing big leagues. While residential real estate is a profitable business, the serious money is made with commercial property investing.
Many investors are afraid to make the leap from residential to commercial property investing. They think it’s to complicated. While it is different, it’s not something to fear. Once you make the change you won’t want to go back to residential. Here’s the easy way to make the leap…..
Commercial Property Investing Often Begins With Apartments
A good strategy for moving into the NFL of real estate investing is starting with apartments. Apartment buildings with four units and less are considered a residential investment by the banking community. Banks will require that you personally guarantee any loan you take out. Five units and more are considered commercial property investing. Loans for these properties are almost always nonrecourse, meaning they are only secured by the property. Your personal credit and assets are not at risk.
Commercial property investing brings more opportunities and typically more profit than residential investing.
Moving up to commercial apartments makes perfect sense if you already have experience with residential properties. All you are really doing is moving up from a few tenants to multiple tenants. However, residential is more hands on than other commercial property investing. Most commercial properties don’t have tenants calling with plumbing problems at 2:00 a.m.
Networking Your way into Commercial Property Investing
When it comes to commercial property investing, you need to think about networking. Commercial real estate investors benefit by staying in contact with a network of professionals involved with commercial property investing. Often the best deals are done without the commercial property ever being listed. These are called “pocket listings”. An “in the know” realtor is aware these properties are for sale but they aren’t listed in the MLS. Typically, the seller doesn’t want a bunch of potential but not serious investors constantly touring the operating business. The realtor in the know only brings around the most serious buyers. But because of this arrangement, the property is listed at a nice discount to attract serious buyers.
Besides starting your commercial property investing career with apartments, consider other strong positive cash flow properties such as self-storage, mobile home parks, senior living, and offices. Look for investments that appeal to a wide cross section of renters. Multi-use properties are easier to keep rented out. However, there can be more profit in specialty use properties such as restaurants. But with that comes the risk of long periods when the property sits vacant.
You need to Learn About Commercial Property Investing
Market and sector knowledge is critical to your success when moving into commercial property investing. If you have personal knowledge about a particular commercial sector, stay with that sector. If you have no knowledge about a sector, gain the knowledge you need before investing. Even if you’re only the landlord, you don’t want to invest in a hotel if you don’t know anything about the hospitality industry. Same thing with the manufacturing sector. You don’t want to own an industrial strip if you don’t know the best use of the property to maximize cash flow.
Different formulas are used with commercial property investing. Along with sector knowledge, you need to learn new profit and loss formulas before investing in commercial properties. In residential you may have only bought properties for 75% of after repair market value or rentals that cash flowed 20% above expenses. In commercial real estate, you need to understand cap rates, net operating income, and loan to value ratios. These are not difficult but you need to fully understand what each means and how they affect your profitability before moving into commercial property investing.
Real estate investing does not need to be about owning as much property as possible. It should be about controlling as much property as possible for the least amount of money and risk. That makes the Sandwich Lease Option the most attractive investing method I know of. You can take control of the property for a couple of hundred dollars. You then put an option buyer in place that takes on most of the homeownership responsibilities until they make the purchase and take on full ownership responsibility. The Sandwich Lease Option let’s you make a big profit for a small investment. This is the method that I highly encourage my students to use.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
If you found this information useful, please visit again soon at wendypatton.com.
For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.
What did you think of this article? Please leave a comment below.
Seasoned Funds and Paper Trails
We are well into the most popular season for home purchases. The good news is that qualifying for a mortgage has gotten easier but that is not the same as being “easy”. There are still requirements that you must meet to obtain a loan and one of those is having seasoned funds and paper trails documenting your down payment.
Seasoned funds and paper trails may have been off the radar of many mortgage underwriters during the heyday of undocumented mortgage loans but seasoned funds and paper trails are being verified today. More than likely, a lack of seasoned funds and paper trails were a contributing factor in many of the loans that ended in foreclosure.
Understanding Seasoned Funds and Paper Trails
Seasoned funds are money that has been in your bank account for at least 60 days. The reasoning is that if the money is from a loan that you recently took out, within 60 days that loan will show up on your credit rating account. It can then be applied to the debt to income analysis that mortgage underwriters perform to determine if you qualify for a loan. Something else you want to consider is if anyone other than the names of the people applying for the mortgage are on the bank account the down payment money is coming from. If other people’s names are on the account, the mortgage company probably won’t consider the funds exclusively yours to be used for the down payment.
Seasoned funds and paper trails go together. Because saving for a large down payment can be tough, lenders want to know where the money came from – that’s the paper trail. Traditional places the money comes from are tax refunds, gifts from family members, or taking cash out of a retirement account. Often, it’s a combination of all of these and also you being diligent about saving money from your paycheck. You create the paper trail by keeping copies of the checks that you deposit into your down payment account. You’ll find it difficult or impossible to get the IRS to send you a copy of the refund check after you deposit it. You’ll create a stronger paper trail if you take a copy of it at about the same time you deposit it in your account. You can resort to submitting a copy of your income tax form but that isn’t as strong of paper trail.
It may be easier to go back to family and ask for a copy of the check they wrote to create a paper trail. When you need seasoned funds and paper trails for a down payment, you’re best off when you set up a separate account for your down payment. Then you can show regular deposits that correspond to your paychecks being made into the down payment account.
When It’s Not Seasoned Funds and Paper Trails
Cash deposits made shortly before applying for a loan can be problematic. Maybe part of your down payment strategy is taking a second job for a while. If the work pays in cash and is under the table, it’s not considered documented income and most lenders won’t count it towards your down payment. Same thing if you sell a major asset such as a motor home for cash. You might get away showing a bill of sale or a copy of the title being transferred but it creates a weaker paper trail than a check being deposited along with the title being transferred.
Sources of funds that often don’t need to be seasoned include:
- Regular payroll deductions going into your savings account. The last few deposits don’t need to be seasoned when the lender can see a long pattern of regular deposits.
- Retirement funds when you can show they came from an account in your name. Often you don’t want to season these funds because IRS rules allow first time buyers to use these funds, penalty free, if the funds are used to purchase a home within 120 days of making the withdrawal.
- Gifted funds when you can show a proper paper trail. It’s not your paper trail the lender wants to see. It’s the paper trail for the account the gifted funds came from. The lender wants to be sure that the gifter didn’t take out a loan in your behalf that they are expecting you to repay. The lender wants to see the funds were seasoned in the gifter’s account.
The bottom line is that there is more to it than only coming up with the down payment. You also must be able to show seasoned funds and paper trails.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
If you found this information useful, please visit again soon at wendypatton.com.
For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.
What did you think of this article? Please leave a comment below.
Disclosures and Tenant Agreements
Disclosures and tenant agreements differ greatly from state to state. This article is not a comprehensive list of everything that landlords must disclose. Rather, it is only an indication of what, as a landlord, your disclosure and tenant agreements need to contain. Or as a tenant, what you landlord should have provided to you.
In most, if not all, states there are landlord / tenant laws requiring a signed lease. This is especially true for residential properties. Typically, these require a description of the property and the amount of rent being charged. The point is to inform the tenant what they are getting into and for the landlord and tenant to have a formal agreement. Disclosures and tenant agreements are intended to protect tenants from unscrupulous landlords and also to establish conditions for when landlords can have unwanted tenants evicted.
Disclosures and Tenant Agreements Protect Tenants From Harm
Some disclosure requirements are less obvious than rental details. At the federal levels are requirements to disclose some toxic substances and certain types of criminals.
If the leased premises were constructed before 1978, federal law requires the landlord to disclose the possibility that there is lead based paint or lead based paint hazards in the apartment or house. If known, the landlord must disclose the location of the lead based paint or the lead hazard. The landlord also must disclose the condition of the painted surfaces. Additionally, the landlord must provide the tenant with a pamphlet with instructions about identifying and controlling lead based paint hazards.
The tenant is allowed 10 days to conduct a risk assessment and inspect the premises. Landlords not complying with the federal law are subject to civil and even criminal charges. They can also be held liable to the tenants for up to three times the amount of damages a tenant suffers as the result of a lead based paint hazard.
In some states, landlords are required to notify tenants in writing when the premise is known to be contaminated with mold. This must be done whether the mold is visible or invisible when the landlord knows or has reasonable cause to know mold is present.
State Level Disclosures and Tenant Agreements
Although based on federal laws, the specifics are written at the state level that require individuals convicted of sex crimes against children to register and that information is made available to the public. Typically, this is done on websites managed at the local, state, and federal levels.
At a minimum, most states require landlords to provide a notice in the lease about how the tenant can access registered sex offender information. Some states require the landlord to inform tenants about any sex offenders known to be living in the area. This is a little more of a gray area because the landlord has to have actual knowledge.
In some states, the disclosures and tenant agreements must also notify the tenant before pest control is performed. The notice is often prepared by the pest control company to include the type of pest to be controlled, the pesticide that will be used, and the active ingredients of the pesticide.
Some state disclosures and tenant agreements require landlords to disclose when a previous occupant died on the premise. Especially, if it was a violent death. This requirement often comes with a time limit such as within the past five years or less.
Most states require tenants be notified of the names and addresses of all owners, agents, and property managers that are authorized to act on the behalf of the owner. This can be for collecting rents, making requests for repairs, giving notice of the lease termination, etc.
Disclosures and tenant agreements are only one of the challenges of being a landlord. Especially, if it is your second job. That’s a big reason I prefer and teach my students about the benefits of real estate investing using low cost / low risk lease options.
Real estate investing does not need to be about owning as much property as possible. It should be about controlling as much property as possible for the least amount of money and risk. That makes the Sandwich Lease Option the most attractive investing method I know of. You can take control of the property for a couple of hundred dollars. You then put an option buyer in place that takes on most of the homeownership responsibilities until they make the purchase and take on full ownership responsibility. The Sandwich Lease Option let’s you make a big profit for a small investment. This is the method that I highly encourage my students to use.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
If you found this information useful, please visit again soon at wendypatton.com.
For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.
What did you think of this article? Please leave a comment below.
How to rehab or flip a house
Today, the residential real estate market is quickly appreciating in value in most metropolitan markets. That makes it the right time to learn how to rehab or flip a house. As any experienced flipper will tell you, you make your profit when you purchase the house. You won’t make the big money investing in just any house by making improvements and trying to sell for a big profit. For instance, investing in the gang war neighborhood is not how to rehab or flip a house.
How to Rehab or Flip a House Begins by Finding the Right Neighborhood
Because you want to maximize your profit, the right neighborhood for rehabbing and flipping is in upper middle income homes. These are neighborhoods for second or third time buyers. Places where more prosperous buyers are buying up. How to rehab or flip a house isn’t for top income neighborhoods because these people want to customize their own homes. They aren’t going to be very receptive to your remodeling choices. Neighborhoods for first time buyers aren’t a good choice either because these buyers are too price sensitive. 
How to rehab and flip a house doesn’t have a specific price range because home prices vary greatly across the country. The neighborhood is the consistent factor from city to city and town to town.
Of course, if you want to know how to rehab or flip a house in upper middle income neighborhoods you need a clear understanding of what defines those neighborhoods. What you’re typically looking for are neighborhoods where at least one parent has a college degree and works as a professional. The household income should exceed $75,000 per year. Most of these are in the suburbs, away from inner city crime and poverty. These people enjoy more luxuries than most but remain on a budget. The upper middle class often have two or more cars along with a boat, motorhome, or other spendy recreational vehicles. These people are also able to take annual vacations to foreign countries or Caribbean cruises.
How to Rehab or Flip a House Becomes Profitable When You Make Mom Happy
What you want to strongly consider when deciding how to rehab or flip a house is what the mother in the family finds important. Sure, the father is going to want a workshop in the garage. However, the most important renovations are made to the kitchen, bathrooms, and master bedroom. Those are the domains of the woman of the home. When you make her happy, you’ll get your full asking price.
Here’s how you determine the asking price. It all begins when you earn your profit with the purchase price. First, find a run down and neglected property in the right neighborhood. Don’t pay more than 70% of the after repair value (ARV). Let’s assume you’re going to need to spend $30,000 on the rehab. And the house will retail for $150,000 after you rehab. That means your purchase cost shouldn’t be more than $75,000. Here’s the math equation.
($150,000 ARV X 0.70) – $30,000 rehab = $75,000 purchase price.
That cost needs to include all of your closing costs. Some savy investors use 65% of the ARV.
Your first reaction might be that houses at this price don’t exist. But they do. Retail buyers in the upper middle income range are only looking for ready to move in homes. Real estate agents don’t even want to show these run down and neglected houses to retail buyers. That’s the secret for how to rehab or flip a house. You buy the rundown house in the right neighborhood, fix it up, and sell for the full retail price.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
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