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Landlord Newsletter - Complete Home Rehab in 10 Days

The LPA Newsletter, March 2004


Dear Fellow Landlord,
I hope all of your rentals are running smoothly in these ever changing times in real estate. I'm sure you will enjoy the articles we have in store for you in this month's LPA Newsletter.

In this issue of The LPA Newsletter:

  • We are fortunate to have a SPECIAL REPORT by Dan Auito, author of the upcoming real estate book, "Magic Bullets in Real Estate".

  • Included is an article written by Cathy Taylor of Rate-A-Renter called: "How to Read FICO Reports".

  • And last but not least, we will find out what "sitting ducks" we really are when we read the article by LPA Member, Charles, entitled "Are you a Sitting Duck Waiting to be Sued and Risking It All?"

  • Our Affiliates self service page is now ready for action. More info later in this issue.

    Please e-mail us if you have any questions or would like to add or share any material / information. I hope you find this month's newsletter useful and enjoyable. Have a great month!
    John Nuzzolese
    John@theLPA.com



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    SPECIAL REPORT: #5

    Complete Home Rehab in 10 Days


    Provided by Dan Auito, Author of "Magic Bullets in Real Estate". Dan's exciting new book is due to be released in Mid-June 2004!

    This report is about taking a house and restoring it to an aesthetically pleasing dwelling that has reclaimed it’s functional utility. In effect, it is the anti-aging medication for bricks and mortar.

    This report assumes that you have already or will soon acquire the proper house. The one that is in essence, ripe for rehab. Be selective and sure of the house’s potential to allow for a profit after all the hard work is done. I will help you find your house or houses.

    In the proverbial nutshell, it helps if you choose a house from the start that has a sound plumbing, heating and electrical system.

    • Plumbing
    • Heating
    • Electrical

    These are things that are expensive to correct in relation to the value they return to you upon resale. Most often, people cannot see the inner workings of these systems and they take them for granted.

    Very few buyers are going to give you an extra $15,000-$20,000 in your asking price because you have replaced things that they can’t see and already take for granted as just a basic component that is buried in the structure. Also, they assume these components to be warranted against defects by you.

    After all, it is mandatory in most, if not all states that you fill out a disclosure form that tells the buyer of every defect that exists or ever has to your knowledge. So inspect the systems of your investment alternatives carefully, as they can be expensive to repair and replace, with minimum dollar return value being realized at the sale.

    Along these same lines, you should also pay close attention to the following cash vacuums:

  • Roof
  • Foundation
  • Structural Integrity

    Here are a few ways to quickly gauge a home by its appearance:

    Stand across the street from it. Now look at the bones of the structure. Does it look like a sway-backed horse, with the roof sagging in the middle? Does it have flat areas in its design that don’t allow water to be drained away quickly? click for the full article...


    Printer Friendly Version of this Article



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    March 2004

    LANDLORD TIP

    Provided by Cathy Taylor of Rate-A-Renter

    How to Read FICO Reports

    FICO stands for Fair, Isaac and Company, a California firm founded in 1956 by Bill Fair and Earl Isaac. They created a unique credit scoring system based on the FICO rating system.This rating system include several parameters from your credit file including length of credit history, number of open accounts, loans, mortgages, and public records that is formulated to produce a 3-digit score between 300 and 950.

    If your credit score is above 680, you are considered a “prime” or a low risk in terms of someone who wants to rent or lease to you.  If your score is below 680, you are “sub-prime” and fall in the middle category in terms of risk of renting/leasing. Anything below a 560 is considered a “shafted’ score and this person is not someone who is a good credit risk.

    A prime score means you are a good risk. A sub-prime score doesn’t mean you shouldn’t get a rental/lease, but you may be required to go a step further in terms of possibly providing a security deposit or first and last month rent payment before move in. Shafted scores are not good risks as tenants, but again doesn’t mean you shouldn’t get a rental or lease. Further provisions may be required from the landlord. click for the full article...




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    KNOWLEDGE IS POWER

    Are you a Sitting Duck Waiting to be Sued
    and Risking It All?


    by LPA Member Charles

    Is it possible for a Landlord to extremely diminish the severe risk of being sued for Liability/Injury to a tenant?

    Currently, one of the most profitable legal fields to specialize in is personal injury. Not only are the biggest awards given in the specialty of Personal Injury, also the most consistent monetary wins are awarded in this area. Typical wins exceeding a million dollars are common. Numerous times disgruntled and even friendly tenants have been known to report that they injured themselves at their rental unit, when in fact they injured themselves at a park, friends house, or wherever, to collect on the landlords liability insurance. Tenants often falsely believe that landlords are wealthy and have millions of dollars worth of insurance. Each year thousands of legitimate and false liability suites are awarded against landlords, and typically they are the most costly and devastating thing that could ever happen to the owner of a rental. Like sharks drawn to blood, injury lawyers romance tenants into lawsuits against their landlords with thoughts of prosperity and grandeur. The average payout range is $400,000.00 to $600,000.00, for the usual back injury fall that disables a tenant and prevents him from gainful (profitable) employment. Most conventional landlords to not have more than $300,000.00 in liability insurance, and the award of $400,000.00 to $600,000.00 or more obviously has a devastating effect on the landlord. Some aggrieved landlords are fortunate and are able to keep their own home, while only losing their rental properties, life savings, assets, and also having their earnings garnished. Some victimized landlords are not so fortunate and lose all, their own home included. The solution to this vulnerability may appear to be, to pay a much more costly and excessive premium and raise the liability from $300k to $500k or 1 million or even two million. However, consider two of many incidents, a child who fell through a window and critically cut himself or the child who fell and impaled himself, both were awarded $2.5 million. Obviously again, the extra half a million that the landlords had to come up with was devastating and life altering. A better and substantially truer protection from this vulnerability comes from a very little known but extremely powerful New York State Statute: “A Landlord is not liable for injury when the lease made the Tenant responsible for all repairs. The Landlord does not reserve any control over the premises and thus the Tenant was liable for the injury.” . I have seen and marveled at how this statute has saved landlords on more than one occasion. Needless to say, most landlords in truth do not want their tenants making repairs and yet would greatly welcome and appreciate this protection from a costly liability lawsuit. To satisfy and fulfill both requirements, there is a distinctive and proper way to correctly incorporate this statute into a lease without having the tenant actually do repairs, and now it appears that this statute may even give the landlord extra protection from a liability claim created by the tenants breaking the rules. Such as, a tenant sneaking in a dog and that dog biting tenants from another apartment .
    God Bless


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    Quotations...



    "Take a chance! All life is a chance. The man who goes furthest is generally the one who is willing to do and dare."
    - Dale Carnegie

    "Find out what works and keep doing it."
    - Unknown

    "They say money can't buy happiness, but I'd like to find out for myself."
    - Unknown

    "There is no tomorrow."
    - Apollo Creed from "ROCKY II"

    "Time is the stuff life is made of."
    - Benjamin Franklin

    "Stay on the financial offensive, not on the defensive."
    - John@theLPA

    "Watch the crowd, go in the opposite direction."
    Wealth Secrets from Robert Allen

    "Even if you're on the right track, you'll get run over if you just sit there."
    - Will Rogers

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


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    SPECIAL BONUS
    for New 2 -5 year LPA Members





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