Find a mentor

Sometimes I have a problem that I can not solve with my property management business.  When that happens I try to find someone who has experience that can or will assist.  This is one of the main reasons I belong to the professional organization, NARPM (National Association of Residential Property Managers).  If you have the opportunity join a group like this.  If you can not, ask your lender, insurance agent, vendor's or friends if they know anyone who is managing a property like yours.  See if you can get an introduction, or use their name and call that person.  They might just appreciate being consulted as an expert in the area. You might also watch for rental signs around your property to see who knows the area.  Sometimes you can call a licensed property manager and they might assist.  Especially if they know that your question will be a quick one, that does not require them spending too much time out of a busy day.

Time to change tenants?

“You can’t turn back the clock.  But you can wind it up again.”  Bonnie Prudden , rock climber, dancer, gymnast, swimmer, diver, and horseback rider.

Sometimes the wrong tenant was chosen for a rental.  It is tempting to just let things be.  Often this is the wrong decision.  A short term vacancy may be better than coping with a continual nagging problem.  Many times the decision to ask someone to move is postponed, thinking that the situation will get better.  Numerous times we have had to take over a property that has been misused, abused or neglected.  It almost always cost much more to repair the property, than if the decision to change tenants had been made earlier.

So, is it time to rewind the clock, - start over again with new players?

Rental Screening and Fair Housing

When I do a screening for rental homes,  I generally want to get as much information from the prospective tenant as possible.  Still, there are some areas that are risky to inquire about. You can ask about their income.  You can ask about their employment.  You can ask about their past rental history.  Disability questions pose a potential problem. Fair housing rules do not allow you to ask about disability causes, what a service animal does for the tenant, medications, or rehab programs the tenant may have attended.

One other danger area is telling a prospective tenant what unit or home is best suited for the tenant.  It is their choice to make.

One safe practice is to use routine policies the same with every applicant.  Tell them what the requirements are before they apply.  Be consistent with everyone.

Fair Housing Center ow Washington has an excellent brochure titled: Top 100 frequently asked questions and answers for Property owners and managers.  Get a copy and actually read it!

HUD regulations May severely restrict seller financing

I just received this notification of proposed rule making by HUD that would  Severely restrict the ability of sellers to offer seller financing.  The apparent justification is a limitation on events that might threaten the banking system.  If you ever buy a home where seller financing may be necessary, a Fixer or other, you need to read the regulation and comment immediately.
I have posted a comment.  Unfortunately the deadline is 2/16/10.  I will post additional info if I get it.
John Parker
 This is the web site to leave a comment for HUD
 http://www.regulations.gov/search/Regs/home.html#submitComment?R=0900006480a6b033

Date: 2.14.10
From: Steve Zehala, Columbus REIA Exec Director, Entrepreneur
Re: Onerous HUD proposal to Take more of our rights AKA "FR-5271-P-01
Safe Mortgage Licensing Act"

If you own Real Estate or even aspire to this could change things for
the worse.....forever. Even if you don't own real estate please help
us. Your industry could be next! We must stand together to stop the
insanity in Washington!
URGENT CALL TO ACTION:
HUD tries to Outlaw Owner Financing for Landlords!!!
The following information is extremely important!
HUD Issues Dramatic Anti-Landlord Rules Interpreting SAFE Mortgage
Licensing ACT
HUD has proposed to eliminate ALL seller financing unless the seller
lives in the home or becomes a licensed mortgage originator. The
proposed HUD Rules interpreting the federal SAFE mortgage act can be
viewed at www.regulations.gov & use the search parameter "HUD" and
the keyword "safe" OR Use this link:
HUD Safe Mortgage Act

For those of you who would rather poke your eyeballs out than read
this here is the problem in a nutshell: "HUD's proposed rules in
Section II F mention the sales of owner occupied residences as an
exception to their proposed licensing law; however, there is no
exception mentioned for non-owner occupied residential property. This
would make it illegal to sell any non owner occupied property that you
have With owner Financing, Land Contract, and maybe even Lease
Options!

So any of you out there who own rental property, inherit property or
want to sell any kind of property that you don't live in cannot do it
unless you get a mortgage license. YES YOU READ THAT RIGHT, YOU WILL
NEED A LICENSE TO SELL YOUR OWN PROPERTY! What's next a license to
breath?

This is not a false alarm! We have researched and vetted this
regulation in detail and have had our law staff investigate it well
and they they have confirmed just how bad this regulation is. Please
confirm this for yourself, google "FR-5271-P-01 Safe Mortgage
Licensing Act" and you can see the alarm has been sounded.

History:
Also, as you may recall, Investors's around the country lobbied hard
last year to maintain the right for individuals to make up to five
seller financed transactions per year before being subject to mortgage
originator licensing, etc... However, LIKE EVERYONE IN WASHINGTON
THEY ARE IGNORING US SO WE MUST SHOUT LOUDER. In a nutshell, seller
financing would no longer be allowed for non-owner occupied homes.
Ouch!

How YOU can help:
We Just learned about the publishing of the rules very late in the
process... and the deadline for comment is upon us on February 16, as
usual they did this last minute to plow it through. So we desperately
need for as many citizens who don't want to lose their right to sell
their own property across the country to go on record with HUD on this
issue. We will be working to try to affect this law in other
legislative ways, but cannot hope to gain traction unless our members
have clearly communicated that they are opposed to this portion of the
rules. This is your chance to be counted on this issue. IF IT PASSES I
MIGHT TAKE A CONSTITUTIONAL CHALLENGE TO BEAT IT WHICH COULD TAKE
YEARS!

STEP-1 PLEASE SUBMIT YOUR COMMENTS TO HUD AGAINST THIS & TO STOP
THIS! We have less than 2 DAYS to flood this system to try stop this!
Thank GOD for email!

Follow these simple steps:
1. Go to HUD Safe Mortgage Act
2. On the right of the screen, click on "submit comment".
3. Complete the form providing required information and VOICE your
comments and then submit.

But Steve, what should I say?
Say what you feel, but say it politely! The message should include
that you would like the definitions in the proposed rules to be
changed so that private individuals can originate and service loans on
properties they personally own. Some ideas from others:
* bank loans are not available on some types of properties

* the tight lending climate has made bank financing "out of reach" for
many
* seller financing is an "age old" tradition based on private property
rights
* these rules would prohibit even partial seller financing - i.e. a
"seller second"
* according to HUD's "Residential Finance Survey" in 2001, roughly 40%
of all non-farm residential properties in the US are owned free and
clear
* an estimated 6 million Americans own a property other than their own
primary residence
* an estimated 4.5% of Americans own three or more properties, many
purchased solely as investment properties
* 40% of non-owner occupied residences are mobile homes which are more
difficult to sell with bank financing
* approximately 5% of homes in US are for sale or for lease... seller
financing may be key to liquidating this inventory
STEP-2 Forward this to everyone you can! Ask them to help. We have
power in numbers!

STEP-3 Contact your Federal Legislators and tell them to stop this!
Find them here:
Find your Senator Here
Find your Congressman Here (put the zip code in)

Email, Call, or Write them but remember we don't have much time! We
need to do it Now!

The continued success of Real Estate as we know it is threatened by
these proposed regulatory changes. Not to mention your property rights
are evaporating. Please do not hesitate to follow the steps above and
make your voice heard.

We Must Take Action or we will lose our Rights! Please help!

Thanks!


Steve Zehala
Exec Dir
1800PayCash.com | Expert Home Buyers Ltd.
Real Estate Investors Assoc of Columbus | Real Estate Investments
Offc: 614-258-1000 | Fax : 614-737-5304 | 458 N. Cassady Ave. Bexley
Oh 43209 (2nd Floor)

Rental Repair Big Trouble

Yesterday I visited a home that I was told needed some minor repairs before it was ready for lease to a new tenant.  It was a home we were considering managing.

The same tenant had been in it for the last 10 years.  They were asked to move after they got behind in rent for another time.

While in the home they never called for repairs.  The owner was pleased because the tenant was very handy and could take care of minor fixes, thus saving expensive repair costs with contractors.

We found leaky faucets, torn carpet, damaged sinks, broken light fixtures, appliances with missing handles and parts, and doors with holes in them.

By saving the cost of minor repairs along the way, by not insisting that the tenant report items needing repair, this owner incurred major expenses.

If we do not hear from an occupant for a long time in a home that may have problems over time from ordinary wear and tear, we start to worry what may be waiting for us when we do our next inspection.  We do an annual walk through.  Sometimes tenants want to know why we are looking. They often will not report problems because they do not want the rent to increase.  That is not the reason we are there.  Owners should expect periodic expenses to keep their property in good operating condition.  Homes need and oil change every so often too.

NARPM manager since 1996
Property Manager since 1973

Screening Credit report For Rental

The following article was supplied by Rebekah Near from Orca Coummunications. She can be reached at: rebekahn@orcainfo-com.com

John Parker
Willow Properties
Property manager since 1973
NARPM member since 1996

LANDLORDS CAN’T GET CREDIT REPORTS?
There is a rumor going around that the “individual landlord”
can no longer get credit reports for the purpose of screening potential
tenants. This rumor is false. The truth is a landlord now
has to work harder to obtain a credit report. Gone are the days
when you can fax a request to your favorite screening service and
receive a credit file on a prospective tenant. The consumers have
complained, and moaned and groaned long enough and loud
enough to successfully make it more difficult, and in some cases
next to impossible for anyone to obtain their personal credit file.
Blame it on personal privacy and identity theft, blame it on unnecessary
fears held by the public, blame it on Homeland Security.
Whatever you blame it on the bottom lime is that now there
are “more rules” for a landlord to follow.
The new rules also created a lot more work for everyone involved
so now the credit reports are more expensive. So, who has
to pay out of pocket for the cost of this “extra security” on their
personal financial information? The consumer, your rental applicants
are the ones that have to pay.
The Bad News:
In response to tougher laws in the Fair Credit Reporting Act
(FCRA) the major credit bureaus (Trans Union, Experian, Equifax)
tightened up their policies on who can access credit reports.
They are the ones that won’t allow you to receive credit reports
unless you comply with the following directives:
1. Get a Washington State Business License for the purpose of a
rental business and have a UBI#.
2. If you operate the rental business from your home there must
be an office space that is separate from the living quarters.
3. An “Onsite Inspection” of your home-office is required. Two
of the major credit bureaus require the Onsite Inspection to be
done by an outside third party that they have pre-approved. Only
Trans Union allows your screening service to do their own Onsite
Inspections. Oh yes, it does cost money!!! The going rate for an
Onsite Inspection is from $65.00 to $125.00.
4. Fill out new and/or additional paperwork committing to following
the rules laid down by the FCRA and the major credit
bureaus.
The Good News:
For the landlords that choose not to make the changes described
above there are some alternatives to receiving a credit report from
your screening service. Some screening services offer a financial
“grade” or “scoring” in lieu of a credit report. After many hours
of studying the different options a screening service can offer a
landlord under the new restrictions to credit files I believe there is
a better choice than the “grade” or “scoring”. I call it an
“Alternative Report”.
The “Alternative Report”
1. Ask your rental applicant(s) to bring in a current copy of
their credit report - preferably no older than one or two weeks.
Here is how: By law everyone is entitled to one FREE copy of
their credit report annually from each major credit bureaus
(Equifax, Trans Union, Experian). However, your applicant
must order from the correct website: www.annualcreditreport.c
om or call their toll free number, 877-322-8228. Again, there
is no charge IF they ordered correctly and only from this site
and or phone number. If they want to purchase a credit report
the cost is reasonable. Each credit bureau has their own website
where they may purchase a report as well.
2. Upon review of their credit report - you can decide if you
want to continue with the screening. If you decide that an applicant
with a certain level of negative credit—apartment collections,
unpaid judgments and/or tax liens etc. no longer
qualifies for the apartment then:
a. Make note on their file of your decision not to rent,
what part of their credit was derogatory, and any other details
regarding your decision not to rent to them based upon their
credit information
b. Return the credit report to them
c. Explain why they no longer qualify for the unit
d. Hand them a copy of the Consumer Rights Letter
(required by law) and thank them for their time
or
Continue the Screening Process
3. Send your screening service the completed rental application.
Make sure you ask your screening service to provide the
following type of information:
a. In lieu of the credit report - validation of the applicant
(s) identity such as: confirmation of name, Social Security
number, date of birth, and AKA’s, plus addresses where they
have lived an other pertinent demographic information.
b. All other desired information that you have previously
received such as court records - criminal and civil including
evictions as well as rental and employment references.
A private landlord/investor can still receive a good background
investigation on their prospective tenants. They just
need to be a little more “savvy” and willing to make some
changes.
By, Rebekah Near, CEO of Orca Information, Inc.

Government in Action

Yesterday, I participated in a Day on the Hill event with the Washington Rental Housing Industry Coalition. It was my 4th year of Going to Olympia for this event. Each year I am amazed at the incredible demands that are made on those who have chosen to serve in Elected office. There were so many other groups on the Capitol grounds, each lobbying for their chosen interests. Our legislators were gracious, attentive and willing to spend time out of their busy schedules to hear our concerns I asked several what they thought of Day on the Hill events. One, who has been there many years, said it is like a farm. You don't come to the farm in the fall and expect to see a harvest. It takes preparation. You have to get to know the legislator, out of the pressure cooker of the Session to know them. They likewise, if you walk in off the street, need to know you. He suggested that you find a way to introduce yourself long before the session begins. You have prepare the soil, plow the soil, sow the seeds, and do all of that long before you can expect to have a harvest in the Fall.

Two others echoed each other when they said that, events like these allow Legislators time to hear constituents concerns. Often the Legislators do not know as much about their constituency as they would like. So when a group comes to them, in Olympia, and tells them what they do, and what their concerns are, the Legislators are hearing from the people who actually do the day to day work in their districts. They are hearing from the experts. People who are concerned enough to take time out of their own busy schedule to come to Olympia. They appreciate the opportunity to hear from them.

Water Damage in Rental?

In this winter season, water can be a difficult to contain. If you have had a flood, either from backed up pipes or groundwater invading the home, here are some hints to help you. First and foremost, use a professional company to remove the water and dehumidify the property. While you are waiting for them to respond you can remove as much water as possible by mopping and blotting up water. Remove wet rugs and other floor coverings that are not permanently attached. Remove for cleaning any draperies that have gotten wet. Wipe down furniture and elevate above wet floors. Open drawers, closet and cabinet doors to encourage drying. Probably most important stay away from any electrical appliances until you know that power has been turned off.

Most of this came from a flyer provided by:

Linzie Reynolds -Account Manager -Service Master of Greater Tacoma
lreynolds@smtac-brem.com
Cell: (253) 208-9038
Phone: 1-800-339-5720
Fax: (253) 627-2709
www.smsouthsoud.com

I thank Linzie for her assistance to our profession.


John Parker- Willow Properties
Property manager since 1973
NARPM member since 1996

Hiring a contractor?

Do you have a project you need to hire a contractor to complete? If you do do not forget to check with the State department of Labor and industries to see if they are registered.

You can do this at: https://fortress.wa.gov/lni/bbip/Search.aspx

Through this site you can find out if a contractor is currently licensed, how long they have been registered, if they have worker's com for their employees, if their are any pending or past actions against the contractor's bond, other business names the contractor may have used or registered in the past, and if they have been cited by L & I for unsafe practices.

You still need to remember to get verifiable references, a written bid, a copy of their insurance policy to see coverage, and a written lien release for all major subcontractors if it is a large job.

A property manager since 1974
A NARPM member since 1996

Landlord and Fireplace

A landlord/owner recently asked me what I thought about a request from their tenant to clean the fireplace. They had used it quite a bit this winter and wanted to make sure that the creosote buildup would not be a problem. He also wanted to know why this would not be normal maintenance that an owner does periodically.

My answer to him was : yes I agree that the fireplace needs to be checked periodically after use. But since the tenant was using it and getting the benefit, they should pay the cost not the landlord. When they moved in they should have been given a clean fireplace. It should be done by a licensed contractor. This insures that you know it is cleaned properly and safe. Someone you know or someone who was referred to you by someone you trust. At the very least, get references. If they are not licensed and bonded, find another contractor.

NARPM member since 1996
Property manager since 1973

Willow Philosophy

A good property properly maintained and correctly managed brings the greatest return.