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Landlording advice, oversimplified

By Tara-Nicholle Nelson, Tuesday, June 9, 2009.

The premise of this book is simple: Those who can't sell, rent. Almost as obvious (and accurate) is the subtext that "accidental landlords" need a primer on investment property ownership, from cash-flow analysis to property management, and all points in between.

In its effort to be a simple, accessible and educational initiation to the basic concepts involved in owning a rental property, this book is successful. But for a novice landlord looking for guidance and tools, I would describe this book as a nice first step on a longer crash course in being a landlord, as you'll definitely need to reference more comprehensive, locality-specific and detailed guides. more...

Debating fairness of upfront tax credit

By Tara-Nicholle Nelson, Monday, June 8, 2009.

If you've been reading this column since it started a few weeks ago, you by now have realized that I have a lot to get off my chest. So much so that I never took the time to introduce the new column and its subject matter, which is somewhat different from my normal real estate consumer advocate-cheerleader material.

However, the May 29 announcement of U.S. Housing and Urban Development Department Secretary Shaun Donovan's decision (after much very public dithering) to allow homebuyers to use the $8,000 first-time homebuyer tax credit upfront, toward their down payment and/or closing costs, was such a pure manifestation of behavioral economics in practice that it reminded me to circle back and do a proper introduction to this "Mood of the Market" column. more...

Walkaway's unfortunate consequence

By Tara-Nicholle Nelson, Friday, June 5, 2009.

Q: My parents signed the title of their home over to me some years ago, with a small mortgage. The place is in a high-crime area, and has depreciated significantly over the last few years. No one in our family wanted to live there, and I didn't want to deal with tenants, even though my Realtor told me that with Section 8 tenants, I would have $700 in positive cash flow every month. (There is rent control in my area, and tenants can be a real hassle.)

Anyhow, I put the place on the market several times over the last few years, but it never sold. Finally, I stopped making the payments and decided to walk away from it. At the same time, though, I let my Realtor put it back on the market on the off chance (it would sell). more...

Double-dipping the loan-mod pool

By Tara-Nicholle Nelson, Thursday, June 4, 2009.

Q: About a year ago, I obtained a loan modification from WaMu that dropped my interest rate about 1.25 points, turned my adjustable-rate mortgage into a fixed-rate loan, and reduced my monthly payment by about $100 per month. I would like to see if I can get the payment down even further under the stimulus plan. Is there any reason I can't go back and request a second modification?

A: All loan modification agreements are different, so first things first -- read your entire agreement from the modification you got last year to see what, if anything, it says on the matter. It's rare for one loan modification to expressly prohibit another modification in print; what's not quite as rare is ... more...

Builder saved by bell in defects suit

By Tara-Nicholle Nelson, Wednesday, June 3, 2009.

In the case Gundogdu, et al. v. King Mai Inc., the homebuilder (King Mai) filed a notice of completion for a home and continued to own it for nearly a year and a half thereafter before selling it to the buyers (the Gundogdus). After about nine years of owning the property and finding numerous defects in its construction, the buyers sued King Mai.

King Mai said the Gundogdus were barred from bringing suit by the 10-year statute of limitations on construction-defect litigation set forth in California Code of Civil Procedure section 337.15.

The Gundogdus, however, argued that the 10-year statute of limitations didn't begin running at the time the notice of completion was filed ... more...

Fear factor distorts financial advice

By Tara-Nicholle Nelson, Tuesday, June 2, 2009.

Cover image courtesy <a href="http://www.workman.com/products/9780761151371/table_of_contents.html" target=blank>Workman Publishing</a>.

Just because you're paranoid doesn't mean they're not actually following you, goes the adage. Similarly, I found with "1,001 Things They Won't Tell You: An Insider's Guide to Spending, Saving, and Living Wisely," just because the premise of the book is paranoid, doesn't mean it doesn't actually have lots of useful, consumer protection-type information. Enough with the double negatives already -- even though I believe the genre of tip compendiums charading as conspiracy busters is borderline passé, I found some valuable tidbits in this book, and I think the average reader will, too.

Based on the author's "Ten Things They Won't Tell You" column in Smart Money Magazine, "1,001 Things" sets out to be an exhaustive encyclopedia of need-to-knows compiled from the perspective of what the purported experts and insiders don't want you to know, rather than the normal lists of what they do want you to know. more...

Family fallout fuels foreclosure fear

By Tara-Nicholle Nelson, Tuesday, June 2, 2009.

Q: I am a recently divorced single mother of four kids, but I earn a great salary. About a year ago, during my divorce, I lost my home through foreclosure, and then declared bankruptcy. When I lost my home, my mother and I went in together to buy a $550,000 home where she, the kids and I could all live together -- her name went on the mortgage and she provided a $60,000 down payment; I paid the monthly mortgage payments; and both our names went on the title.

Recently we had a falling out and she moved out. Now she's filed for bankruptcy herself and has notified me that she plans to give the house back to the bank, since it's upside down -- even though I live there, I'm on title and I've been making the mortgage payments! more...

Today's buyers need thick skin

By Tara-Nicholle Nelson, Monday, June 1, 2009.

Before I came into this business, my mental reference images for the home-buying process lived at two equally ridiculous extremes of a fully unrealistic spectrum. On one end were my selective memories of house hunting as a child, in which my brother and I got to run into a single, perfect house and choose our rooms (I'm pretty sure my parents had already closed escrow on the place before we got there). On the other end were scenes from that last of Richard Pryor's PG-rated films, "Moving," where his family showed up after closing to realize that the doorknobs, sinks and even the in-ground swimming pool had been jacked up and hauled off by the sellers.

Then, I started selling real estate, in a booming seller's market. more...

Refi vs. sell: the cost-benefit analysis

By Tara-Nicholle Nelson, Thursday, May 28, 2009.

Q: I have a high-interest-rate loan. I would like to sell the house due to downsizing and neighborhood changes. Because interest rates are low now, I can't decide whether I should refinance and then list to sell, or just go ahead and sell with the high-interest-rate loan. Because of the area, the house may not sell right away and could be on the market for as much as a year.

A: "High" interest and "low" interest are totally relative, my friend. Every time I mention a high-interest loan that's in the 6 percent range, my dear father reminds me that when he bought our family home in the 1980s, interest rates were in the 15 percent range! more...

Landlords accused of renting dangerous home

By Tara-Nicholle Nelson, Wednesday, May 27, 2009.

In the case Reyes v. Egner, the tenant (Reyes) renting a vacation home for a two-week holiday brought her elderly father along for the trip. He fell on a hidden step with no handrail, which should have had one under the building code, and severely injured himself.

When the tenant sued the beach house's landlords (Harry and Holly Egner) and the real estate broker who rented it out, the landlords defended themselves and the broker from the suit on grounds that because the step defect was not obvious, they were not liable unless they had "fraudulently concealed" the defect. The trial court agreed, clarifying that either (a) the defect was obvious or (b) it was non-obvious but not concealed by the landlords, concluding that either way, the landlords could not be held liable, and dismissed the case. more...

Real estate 'experts' book 'hit and miss'

By Tara-Nicholle Nelson, Tuesday, May 26, 2009.

Because I casually follow him on Twitter and elsewhere, the publication of Robert Kiyosaki's latest, "The Real Book of Real Estate," had been a blurry blip on my mental radar screen for some time, so I was interested to lay hands on it. Very quickly, it became apparent that the thick book was not, as I'd expected, a mid-career or post-bubble revisitation of his original classic, "Rich Dad, Poor Dad." Rather, it was a compilation of article/chapters by 22 other real estate personalities. I use the term personalities because, well, neither "expert" nor "charlatan" would fit all of the contributors.

What an assortment of folks! You've got real experts, like Garrett Sutton, who is an attorney who has both pioneered and mastered asset protection for real estate investors, and you've got infomercial investing pioneer Carleton Sheets, of "No Money Down" fame (or infamy, as the case may be). more...

Buying home under the influence

By Tara-Nicholle Nelson, Monday, May 25, 2009.

I was showing a new client into my office the other day when she remarked on how lovely and off-the-beaten-path it was, and then asked how I found it. I related how I had first come into the area to look at an office across the way that was up a steep, long flight of stairs, but I decided against it, "because so many of my clients' down payments are provided by their parents, so I wanted to be sure I had a ground-floor office that their parents can get into!"

That got me to thinking -- my clients' parents had a pretty major impact on my choice of office location, but they often play an even more significant role in their adult children's real estate transactions -- sometimes intentionally, other times totally unwittingly. more...

Losing the home-equity gamble

By Tara-Nicholle Nelson, Friday, May 22, 2009.

Q: I'm 61 years old and in a bad situation. In 2006, I paid my house off and retired as chief financial officer for a public company. I wanted to invest in a new technology, so I called this mortgage broker who was always sending postcards to me in the mail. I had very little income, but had just entered into an agreement to work part time as the CFO for a startup earning a six-figure salary. The mortgage broker was able to get me a loan with nothing more than my Social Security earnings documentation and a letter from the startup's president.

I pulled about $600,000 out of my home, with a first and a second mortgage (of course, now my home is worth only about $400,000). But I didn't realize that the first mortgage was a pay-option loan, so every month, my loan balance is going up. My investment opportunity flopped, so the money is gone. more...

The truth about 'liar's loans'

By Tara-Nicholle Nelson, Thursday, May 21, 2009.

Q: I am a freelancer, and I want to fulfill my dream of buying my first home. Will they -- that is, everyone involved in the home-buying process -- take a chance on me? I don't have much on paper.

A: Once upon a time, in a mortgage market far, far away, there was a loan called "stated income." Nowadays, people call it a "liar's loan" because lots of folks abused it by just fabricating an income that they knew would qualify them for the lovely manse they really wanted when their real income would get them only a plain tract home. There was, however, a legitimate use for stated-income loans at the time, and one of those uses was to allow freelance and commissioned workers to qualify for a loan without having to fully document their income with paycheck stubs, the way a salaried employee would. more...

If it ain't blight, don't try to fix it

By Tara-Nicholle Nelson, Wednesday, May 20, 2009.

In the case City of Long Branch v. Anzalone, the city declared an entire neighborhood to be blighted and put a redevelopment plan in place. As part of the plan, a number of homeowners were notified that their homes would be condemned to make way for new buildings, and the homes were appraised by the city's contractors.

The homeowners objected that the appraisals incorrectly described their homes and that the city's blanket declaration that the area or their homes were blighted, without providing specific facts supporting that designation, did not justify the condemnation of their homes under the New Jersey state constitution's blight and eminent domain provisions. more...

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