Landlord Newsletter April 2009

Please e-mail us if you have any questions or would like to add or share any material / information.
John Nuzzolese
John@theLPA.com

We are cheerleaders for an industry and market that we believe have a vast upside for the wise investor.

BEAT BACK THE NEGATIVE

The news driven by money-center based media is money-centered. If you work in New York, Washington, or Charlotte, you and your neighbors are undergoing significant changes as traditional financial institutions are being remade or wiped out. The gap between Wall Street and Main Street is wider than ever. There are two Americas: one east of Hoboken and west of Oakland, and then the rest of us. Wall Street and Madison Avenue have tried to marginalize any investment that’s not part of Wall Street, residential real estate in particular. Wall Street’s misunderstanding has created an industry of misinformation about real estate and its value as an investment.

SELF-MANAGING RECESSION OBSESSION

Now is a great time to buy at values few of us will see again.

THREE SIDES OF OUR MOUTHS

Second, a recession is what you make of it. By all means, be a victim, but don’t rain on our parade. If you are a seller who believes that you need to get out of the property at any price before losing your shirt, you are ripe for being taken advantage of. Panic and urgency for a seller can mean profit for a deliberate buyer.

Third, as a seller, the market in many neighborhoods is moving in a positive direction. Rushing to sell may not be the only, or best, option. Holding and renting could generate inflation-proof income, tax advantages, and an early return to appreciation. History has been kind to well-located and wisely leveraged residential real estate. Understand your role and objective and use the market mood to your advantage.

WHY BUY NOW?

1. Presently, buyers have a wide choice of stock and very little competition.
2. Building permits dropped 41 percent from 2008 to 2009, after a similar drop from 2007 to 2008. They are still falling. A shortage of well-located homes will start to show up late 2009. Along with new-builds, many of the homes banks are returning to the market (REOs) are located in less desirable far-burbs and exurbs.
3. Resale prices are often less than replacement costs. This cannot last too much longer, as the market abhors this type of illogical financial vacuum. New homes will be more expensive because the time and cost of permits, construction material, and reactivating labor is higher than buying existing stock. It will take 12 to 18 months to correct once the builders return to the market.
4. Foreclosures (at double the normal rates) create more demand for well-located, quality rentals. Rental demand for well-located properties is still strong and a recipe for a future appreciation, says Greg Dawson of GoRenter.com.
5. Falling interest rates, down payment assistance, and first-time homebuyer incentives have made home ownership more affordable; the best it has been for a long time. Buyers and investors with a good credit history, a down payment, and a demonstrated ability to make mortgage payments consistently, are able to get FHA financing.
6. The real estate market has not imploded. Prices are off an average of 10 percent to 1 percent from their highs in good central and near-burb neighborhoods. In some cases value has held steady in the face of negative media. Far-burbs, exurbs, locations that are overbuilt, have an onerous commute, or where owners were sold aggressive loan products, are being punished. Their underlying economics were based on fragile and unsustainable housing promotion. The national median house price was down last month. This is expected to level off and stay flat, beginning to rise in 2010 as the supply of foreclosures is worked through.
7. Vendors are now very negotiable on price compared with this time a year ago. They are increasingly aware that they may need to leave some money in their property, in the form of vendor finance, if they want to sell to investor-buyers looking for positive cash flow properties.
8. Positive cash flow property deals can again be found all over. Go to www.InvestorLoft.com for a shortlist of discounted, cash flow positive properties that meet you investment criteria.
9. Prices will recover and property values will increase. The downturn is due to a lack of confidence rather than any change in the property market fundamentals.
10. Real estate is still the best place for most people to invest their money. Property has doubled in value, on average, every seven to ten years for more than 70 years; there is nothing to suggest that will change.

    BONUS: Real estate is titled, real, can be leveraged with a mortgage, can be refinanced to take out profits tax free, can be depreciated, can earn income and be expensed, if held longer than 366 days – and if you must sell, profits are taxed at capital gains tax rates currently at 1 percent.

    Show us another investment that delivers this level of investment, financial and tax efficiency!
    
    

    ***********************************************
    

    Ask the Attorney

    The Landlord Protection Agency® is proud to introduce John Reno, Esq., a highly experienced Landlord - Tenant attorney based on Long Island, NY.

    If you have a landlord tenant problem you'd like to ask a question about, please feel free to e-mail me your question.
    Submit a landlord / tenant question for Mr. Reno
    Please try to keep your questions as short and to the point as possible.
    
    

    Dear Mr. Reno: I am in California but own a mobile home park in Texas. I am trying to evict a tenant for non-payment. They "own" their home but still have a lien on it from a lender and also owe back taxes. The judge has granted the eviction but what are my grounds if they do not remove the home at the end of 5 days? I doubt they have the money to move it....Can I take possession? What are the required procedures with the lien holder (who we can't locate)? Also, title does not appear to have been transferred from the prior owner..... Thanks in advance for help on this mess. - Tawnya F., TX A: You have to call the Sheriff (here it's the Sheriff- other places, the "Marshall", or the Ranger, or maybe call Chuck Norris (for Texas). They're the ones that physically perform removals when they don't remove voluntarily) Dear Mr. Reno: I am in NYC. My tenants were finally evicted by the marshal. They left a lot of damages, most likely more than $10,000. Could you tell me the statute of limitation to file a claim against them? Thank you so much for all your help. - Nina, NYC A: Assuming its normal neglect, lack of maintenance, sloppiness and stupidity (legally "negligence") it's 3 yrs. If its intentional spitework (i.e. "vandalism") it's 1 yr. (It could also be breach of the lease (i.e. breach of contract) and then it's 6 yrs; so it's not so simple- Just do it within one year, okay?

    Read more from John Reno, Eviction Attorney

    
    
    
    *********************************************** The Rent Statement Mailer Delivers

    Fact:
    Rent is Paid More Timely When the Tenant Receives a Monthly Rent Statement

    Whether you mail your tenant a monthly statement the same way your bank mails you your credit card statement, or supply your tenants with a Payment Book with pre-printed payments slips, the results are the same. The tenants are reminded of what they owe, when it is due, and what the penalties are for not paying on time.

    Most landlords have positive results and more timely payments when using a Rent Statement mailer. It helps tenants Want to pay their rent on time and preserve their credit record with their landlord.

    The Rent Statement displays the key monetary terms agreed in their lease. That's important because the tenant is reminded of these key items every month when they fill in the amount of their payment before sending it.

    Tenants find it a little intimidating and a little more official when their Social Security # is on a document. This part is optional and need only be included at your discretion.

    On the top right below the rental address is a payment breakdown area which includes:
    

    • the rent due date
    • the rent amount
    • the late date and late fee
    • the daily late date and daily late fee
    • early payment discount date and amount of early payment discount (optional)
    • Added rent incurred (any current or past due charges in addition to the rent)

    The top tear off slip also includes the landlord's mailing address and instructs the tenant to whom to make the rent payable. Since it is editable in MS Word, it is also easily fitted for window envelopes with the tenant's address showing through.
    The bottom portion has a place to record paid amounts and a check # and can be kept for the tenant's records.

    When sending the Rent Statement Mailer, it is a good idea to enclose a pre-self-addressed envelope for the tenant to simply drop the top portion of the statement in along with the rent payment. Some landlords even prefer to stamp the envelope in an effort to remove every possible obstacle in the way of getting the rent paid. Personally, I say let the tenants buy their own stamps. If they are that helpless, we shouldn't have them as tenants!
    
    

    NEW ESSENTIAL FORM DOWNLOAD The LPA Rent Statement Mailer The LPA Rent Statement Mailer (You can download this free till April 20, 2009 in Word or Adobe PDF)

    
    
    

    ***********************************************

    Tenant Excuses

    "I had to bail my husband out of jail for stealing a snowmobile." Jennifer, NY

    "I wanna renegotiate our lease. MY sister is in real estate and she says I'm paying too much." Sorry the lease stands. So does the late fee. Ask your sister if you can stay with her after you are evicted. - Jack Klein, NY

    "My Dad said he was going to pay the rent for me this month for my birthday. What? You didn't get it yet?" I called the father to verify the story. Luckily the embarrassed dad didn't argue much about the late fee. - Michael C., Kansas
    
    

    ***********************************************
    

    Quotations...

    
    
    
    
    "Your most unhappy customers are your greatest source of learning." - Bill Gates

    "Accept that some days you are the pigeon, and some days you're the statue." - Roger C. Anderson

    "You miss a 100 percent of the shots you don’t take." - Wayne Gretzky

    "You'll have time to rest when you're dead." - Robert De Niro

    "How much did your last tenant problem cost you?"
    - John Nuzzolese
    
    

    ***********************************************
    

    Books by LPA Members

    The Landlord Protection Agency is proud to recommend the following landlord books written by LPA Members, Dr. Dani Babb, Robert Irwin, Timothy Spangler, Tony & Sandy Midea and Dan Auito. Just click on the book for more information about it.
    
    
    
    
    
    
    
    
    ***********************************************
    
    

    LPA Membership Expiring?
    Take Advantage of the Renewal Prices!

    How to Check your LPA Membership Expiration Date:
    1. Be logged in with your LPA username & password
       
    2. On the "Main Menu" (top right), click on "Your Orders" (right below your name)
       
    3. The beginning date of your membership will be listed to the left of your membership order # in this format: YYYYMMDD
       
    
    
    

    NEW! Save Money with our Promotional Membership Renewal Prices! *Your Membership Expired? No Problem!

    
    
    
    ***********************************************
    

    How many landlords do you know?
    
    Make money as an LPA Affiliate!

    We've DOUBLED referral fees so you can earn twice as much!
    

    
    

    Earn a 20% commission on all orders placed with The Landlord Protection Agency by customers that you refer to us!

    You get paid for each order placed through your specially coded internet address for The LPA site!
    How many landlords do you know?
    
    Join The LPA Affiliate Program!
    
    
    
    ***********************************************
    
    
    
    SPECIAL BONUS FORMS DISK
    for New 2 -5 year LPA Members
    
    This offer also applies to 2-5 year Membership Renewals!
    Check out our low renewal prices
    *Your Membership Expired? No Problem!
    
    ***********************************************
    
    
    
    
    ***********************************************
    
    Interested in past LPA Newsletters?
    Feel free to view the LPA Newsletter Archive