How To Choose a Mortgage Broker…
Some Questions & Answers
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Q1
I want to refinance my apartment building and need to know how to choose a mortgage broker with minimum risk of problems.
A1
The most important thing is to verify that the broker is properly licensed in your state. You should also check for violations. Mortgage broker regulations vary widely from state to state. Some states refer to mortgage brokers by different names while others license brokerage offices, but not individuals. Some states, California for example, allow real estate brokers to also be mortgage brokers. Some states impose significant educational requirements. Others demand proof of sound financial footing. A few states impose no regulations at all while others conduct background checks designed to weed out applicants convicted of fraud or other crimes, as well as those who have had their licenses revoked in other states. Be particularly careful about using a broker in another state, as you would likely have less protection than one licensed in your own state.
For a more detailed discussion about mortgage brokers see Lesson 4 of our “9 Professionals for Your Real Estate Investing Team” Mini Training Guide.
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Q2
I’m trying to collect a judgment for a case won in California, but now the debtor is in Texas. I won a judgment for $5,000 and have to pursue collecting it. How can I find his assets and collect my debt from him.
A2
Our ”Collecting Judgments” eCourse provides information regarding finding assets and collecting the judgment. Often, the first place to start for finding an ex-tenant is to utilize documentation you collected (or should have collected) when you rented the property to him. Such documentation includes ID verification, application form, and credit report. These items should provide information such as emergency contacts, employers, automobiles, etc. from which one can often track skips. Assuming that they signed an adequate permission statement when you originally took their application, you should be able to obtain a current credit report which may have a variety of clues to their current location.
Collecting a judgment in a state other than the issuing state requires you to file certain paperwork with the court of jurisdiction where he now resides. After you’ve determined the Texas residence of the ex-tenant, contact the Texas court of jurisdiction to obtain the details of their procedures.
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Q3
I have a tenant who has requested the outside of a few of his windows (ledges/sills) not be painted. The painters have been removing the chipped paint and painting all windows outside/around the building for the past 2 weeks. So, about 2 weeks ago, this tenant was notified (via email) that his particular windows would be done on a certain day and to keep some of his windows closed (it would not affect all of them). He said (all via email) that it was too hot to keep the windows closed and it would smell. This tenant has been verbally threatening me for months about keeping away from his unit as well as the building and he only communicates by email, not phone or in person. (I have not been in his unit since he 1st moved in). There were other issues about repair that he said was needed but would not let us in to see. So, to avoid more confrontation, I emailed back that we would not be painting his windows at that time. But the painter told me today that the wood needs to be protected from the elements and I want to notify him again that his windows would be painted this Friday. He threatened in the past that I cannot post anything on his front door, so how else can I notify him? Is email ok or posting on his mailbox and hallway wall in front of his unit? Do I even need to notify him if no one is entering his unit and he was already notified when the work first started?
A3
You are allowing a tenant to manage your property. You have the right to maintain your building, including having the painter finish the painting.
I would also be very concerned about not ever having access to the inside of this unit. You (or your contractor or other agent) should periodically (at least quarterly) thoroughly inspect the inside to be sure that there are not any minor problems that could become expensive problems.
For example, a leaky water supply valve under a sink involves a part costing a few dollars and can usually be repaired for $50 or less by a handyman or probably less than $100 by a licensed plumber. If not repaired, a tiny leak can eventually result in destruction of the cabinet bottom, even part of the sides and the floor underneath. It can also result in a mold problem. It will cost many hundreds of dollars to have the cabinet replaced, possibly close to a thousand dollars if it is a custom size or when it was once a stock cabinet type/size that is no longer available.
As another example, failure to maintain caulking around bathtubs and showers, that might cost a few dollars to occasionally touch up the caulk, can result in rotted wood and serious mold problems inside the walls and rotted floor boards if on a raised floor. Mold can result in expensive lawsuits, even by the very tenant who doesn’t want anyone to enter the property. In the worst case, the bathtub might eventually fall through a wooden floor. Replacing the bad wood and remediating the mold could cost several thousand dollars.
You and/or your agent have the right to enter a rental unit with the notice required by your lease (regular inspections should be a clause in the agreement) and/or state law. The minimum notice period is usually 48 hours.
If the tenant refuses to cooperate, you can enforce your rights through the court, including evicting the tenant. If you don’t want to actively manage your property, you should consider hiring a licensed property management firm. The benefits of professional management is often much greater than the costs. You could instead turn the matter over to a competent landlord-tenant law attorney who will be able to deal with this particular tenant with a letter that should get the tenant’s attention.
Finally, landlords should always communicate via written notices rather than via phone or email, as email may have no legal standing in court.
Again, I advise you to consult an attorney if you don’t feel that you can deal with this tenant.