What most landlord don’t know is that there is liability piece in the tenant’s policy and the landlord can be named as an additional insured.  This is very important because the tenant’s policy will supersede the landlord’s policy if there is a liability claim; the tenant’s insurer get sued before the landlord’s insurer – HOW COOL IS THAT!

Here is the complete paragraph in my Lease Agreement:  Before occupying the Property, the Lessee/Tenant must obtain a tenant insurance policy with liability coverage of at least $500,000.00. The Landlord/Lessor is to be named as an addition interest with notices mailed to the Landlord/Lessor at the address herein provided.

I’d like to offer you a Free Copy of my Residential Lease Agreement by clicking here.

For more about Tenant’s Insurance, please visit this article.

This link in blue is from About.com and is also a good explanation.

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I’ve been a real estate investor for over thirty years and I love selling a house on a lease purchase.

There is not a lot else I can say about arbitration other than to say landlords need to include a clause in their lease and that the parties agree to arbitrate before they litigate.

The only exception is in the of an eviction proceeds.

Bottom Line:

• Arbitrate before you litigate and put in writing before there is a problem. See my clause below.

For a Free Copy of my Net Net Net Lease Agreement and more

Forms and Agreements for Real Estate Investors,
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From My Lease:

ARBITRATION: (Try to Arbitrate before you litigate – everyone will save money and it’s much simpler.) Any controversy or claim (except for dispossessory proceedings which are adjudicated in Magistrate Court) arising out of or relating to this Agreement specifically concerned with the claimed injury or illness of the Lessee/Tenant, his relatives, guests, visitors, or invitees, relating to the claimant’s use (incidental or otherwise) or occupancy of the Property, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial [or other] Arbitration Rules [including the Emergency Interim Relief Procedures], and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.  The Lessee/Tenant agrees to reimburse or advance to Landlord/Lessor, on demand, all legal fees, expenses, costs, fines and penalties incurred in connection with the defense, contest or prosecution of any claim made, threatened or asserted by the Lessee/Tenant.

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I’ve been a real estate investor for over thirty years and I love selling a house on a lease purchase.

In a lease purchase agreement, it is customary for the tenant/purchaser to pay for utilities, assessments, maintenance, etc.

Bottom Line:

All costs of ownership are the responsibility of the tenant/purchaser.

For a Free Copy of my Net Net Net Lease Agreement and more
Forms and Agreements for Real Estate Investors,
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From My Lease:

7. UTILITIES AND ASSESSMENTS: Tenant pays all utilities, HOA, taxes, insurance  – this is a NNN Lease which is customary for a Lease/Purchase contract.

Lessee/Tenant shall pay for all electricity, gas, fuel, garbage pickup, trash pickup Homeowner’s Associations Dues, property taxes, property insurance and other services used in or assessed against the Property.

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When making a decision about a private money loan, it is necessary to gather as much information as possible. The lender and borrow must be creative; not a robot or a decision machine like a traditional bank lending committee. There is no lender matrix in private lending and borrowing.

The human creative and analytical process is powerful in private lending; the direct opposite of the black and white world of the traditional banking world.

The niche private lending is providing is that creative process and, for you as the lender, make a yield, tax free in a Self Direct IRA.

The point is that you need to think about private money in a different way especially the  profit potential of being a lender using your Self Direct IRA. Be a good listener and understand your worse case exit strategy

For example: I was recently approached by a homeowner needing a second mortgage on their home – owner occupied. Most investors would not take a first look at the deal because it was second mortgage. Well, as you can guess, I did do the deal, along with a small group of investors. The CLTV (combined loan to value) was so low, the underlining loan’s terms were excellent and the home would have been easy to see if we did foreclose, I (and the other investors) felt very comfortable. Actually, without sounding harsh, I would have loved to foreclosed on the home and sell it on a ‘wrap mortgage’. We would have made a ton.

So, again, when making a private loan, look at the entire deal and plan for a conservative exit.

For a Free Copy of my Net Net Net Lease Agreement and more Forms and Agreements for Real Estate Investors, clicking here .

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Forms, Contracts & Agreements for
Residential & Commercial RE Investors.
Also includes Cash Flow & Value Analysis Spreadsheets

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Due Date:

My rents are due on the 25^th of each month, not the 1^st.

Two reasons I do this: 1 – my mortgage payment is due on the 1^st and I need their rent to make the mortgage payment. 2 – Because my rent is due on the 25^th and not the 1^st as all other landlords, I start the eviction process before them and usually and get better service from the Magistrate Court (quicker court date) and Sheriff (quicker eviction notice delivered to tenant).

Some tenants will complain that they get paid on the 1^st and the 15^th and won’t have the money until the 1^st. I simply tell them to pay me on the 15^th.

Explain to your tenants you start evictions on the sixth day after the due date and then they will also be responsible for my court cost and there is a $200 reinstatement fee. This is for my time to file the eviction process.

Bottom Line:
Due Date is the 25^th, not the 1^st.

For a Free Copy of my Net Net Net Lease Agreement and more

Forms and Agreements for Real Estate Investors,
clicking here .

For more great real estate blogs, please go to About.com and ActiveRain.com .

From My Lease:

3. RENT:

All my rents are due on the 25^th of each month. This way, the rents comes in before I have to make mortgage payment due on the first of each month. Also, most landlords make their rents due on the first. By make you rents due earlier than the first, you will get a jump on other landlords on the eviction process at the Sheriff’s office.

The Tenant will make a full rental payment on the 25^th.

I do not take personal checks. Remember, this people have bad credit because of poor financial management skills. Also, it’s hard to collect on a bounced check and you’ve already written check to cover your expenses based on collection of rents. If you tenant’s check bounces, you checks will bounce too.

Starting on _________, 200___, the Lessee/Tenant shall pay unto Landlord/Lessor rent of $______.00 (certified funds), subject to the rent discount (see Paragraph 5) (see Paragraph for more explanation) and paying monthly (on the 25^th)  thereafter. The monthly rent is due by 2:00PM of the twenty- fifth day of each month thereafter (see Paragraph 4). This rent excludes the cost of the property insurance, property taxes, mortgage insurance, homeowner’s association, etc. currently being assessed.  The Lessee/Tenant is responsible for these assessments in addition to the rent. See Paragraph 9 for more detail. (See Paragraph 9 for more explanation.)

However, on each sixth month anniversary of the signing of this Standard Lease Agreement, the monthly rent will increase by $200 over the pervious six-month period.    Remember, I use this Lease on a Lease/Option  – I want the Tenant to buy. I want to them to do what is necessary to close. This increase at each six month anniversary gives them financial incentive to close.

Lessee/Tenant’s Initial:   ____________    _____________

I get the Tenants to initial after this paragraph – make sure they understand they need to get this closed

See also rent discount explained in Paragraph 5.and late payment fees explained in Paragraph 6.

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Projections are that IRA’s will account for $5.6 Trillion in 2011 and 75% of Baby Boomers will rollover their 401k’s to an IRA’s. Much of this will be rolled over to Self Directed IRAs. Why? Attend Entrust seminar and learn the benefits and higher yields earned in a SD IRA.

For those that already own or will own residential real estate and need a really great lease, go to my site

For a Free Copy of my Residential Lease Agreement clicking here .

For more about Self Directed IRA’s , click here.

This link in blue is from About.com and is also a good explanation and is good source for more information on Self Directed IRAs.

Also, please complete the form on the right to receive your Free Self Directed IRA eBook.

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Title IX – Investor Protections and Improvements to the Regulation of Securities

• Contains a credit risk retention provision requiring securitizers to retain an economic interest of at least 5% of credit risk of assets they securitize.

• Exemption from risk retention requirement for “qualified residential mortgages” and loans insured or guaranteed by the U.S. government.

Title X – The Consumer Financial Protection Act of 2010

• Creates new regulatory agency – the Bureau of Consumer Financial Protection (the “Bureau”) to be housed within the Federal Reserve Board.

• The Bureau has authority to examine and enforce consumer protection regulations for all mortgage related businesses, large non-bank financial companies, and banks and credit unions with assets greater than $10 billion.
• The Bureau will be responsible for enforcing “federal consumer financial law” – essentially, almost all existing federal laws regulating consumer financial products and service providers – including but not limited to TILA, FCRA (portions), RESPA, HMDA, HOEPA, FDCPA, ECOA.
• Bureau comes into existence upon the President’s signature.  However, authorities and personnel must first be transferred to Bureau.  This will not happen until a “designated transfer date” is determined by the Treasury Secretary.

Title XIV – The Mortgage Reform and Anti-Predatory Lending Act

• Expands TILA to apply to “mortgage originators” in addition to creditors (i.e. those that actually extend credit to consumers).
• “Mortgage originator” includes loan originators and brokers (also creditors in table-funded transactions for certain provisions).
• Requires licensure/registration of all mortgage originators in accordance with applicable state or federal law and the inclusion of the NMLS unique identifier of the mortgage originator on all loan documents.
• Prohibits payment of YSP under new anti-steering provisions.  A mortgage originator is generally prohibited from receiving from any person, and any person is generally prohibited from paying to a mortgage originator, any compensation that varies based on the terms of the loan (other than the principal amount).
• Anti-steering provisions do not prohibit incentive payments to a mortgage originator based on the number of residential mortgage loans originated during a certain period of time.
• Generally prohibits a mortgage originator from receiving any compensation from any person other than the consumer, with certain limited exceptions.
• Includes new section requiring all creditors consider the borrower’s ability to repay.  Sets forth factors that must be considered in determining a borrower’s ability to repay.
• Creates presumption of ability to repay for “qualified mortgage” loans, which is rebuttable.  Sets forth definition of “qualified mortgage.”
• Prohibits prepayment penalties for all loans that are not qualified mortgages.  Prepayment penalties are limited and must be phased out for qualified mortgages.
• Prohibits mandatory arbitration provisions for loans secured by principal dwellings.
• Establishes new disclosure requirements regarding partial payments, ARM loans, fees and settlement charges, escrow payments, negative amortization, anti-deficiency protection provisions.
• Substantially revises HOEPA thresholds and definitions.  Reduces both APR and points and fees thresholds.  Ties APR threshold to APOR rather than Treasury securities.  Adds third threshold regarding prepayment penalties – a loan will automatically be high-cost if it provides for a prepayment penalty more than 36 months after closing, or in excess of 2% of the amount prepaid.
• Revises points and fees definition to include (1) all compensation directly or indirectly paid by a consumer or creditor to a mortgage originator, including a creditor in a table-funded transaction; (2) credit life, disability, credit property, debt cancellation premiums and charges payable at or before closing; (3) all prepayment fees or penalties which may be charged under the terms of the loan, and all prepayment fees or penalties incurred if the loan refinances a previous loan made or currently held by the same creditor or an affiliate.  Will exclude from points and fees calculation government agency insurance premiums and any private insurance premium up to a certain amount (provided certain conditions are met).  Will also exclude up to two bona fide discount points under specific conditions.
• Adds new data elements for HMDA reporting.
• Requires mandatory escrow accounts for certain first lien loans for a minimum of five years.
• Amends TILA and RESPA relative to servicing practices
• Establishes new requirements regarding appraisals, appraiser independence, appraiser management companies.

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For a Free Copy of my Net Net Net Lease Agreement and more
Forms and Agreements for Real Estate Investors,

clicking here .

For more great real estate blogs,

please go to About.com and ActiveRain.com

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