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NWCLANorthern Worcester County Landlord Association

“Landlords Helping Landlords”“Landlords Helping Landlords”

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Volume 54 April 2009Landlords Helping Landlords

NWCLA President’s April LetterDear NWCLA Membership,

Our first meeting in the new venue at Monty Tech was a smash success. We had 74 NWCLA members in attendance to hear what our local Board of Health officials had to say about property

owners’ responsibilities at the local and state levels of compliance. If you missed the meeting, you really want to check out the web site under our legislation page to keep informed of the issues facing landlords in Northern Worcester County.

I also want to extend our extreme thanks and gratitude to our special guest speakers featuring Bernie Sullivan from the Gardner Board of Health and Jeffrey P. Stephens of Fitchburg Board of Health, as well as Cindy Soule from MOC to talk to us about the “Get The Lead Out Program.” We will also be welcoming back Cindy this month to give us updates to issues that were not available for comment on from our last meeting. Also be sure to key an eye on the NWCLA web site for future postings as the the news breaks.

If you haven’t noticed yet or popped your head outside lately, the flowers are popping up through the ground, the temperatures are warming, birds are chirpping, and there has been a significant change in the climate over the past month. The real estate market climate that is! We have seen lots of activity over the winter months and have been watching the savvy investors scooping up deals at super discount prices. With the Spring rental season ramping up, there is a lot of activity. But you have to know what to look for in today’s market. That is why it is my pleasure to announce our special guest speakers for this month.

Our April meeting will feature our very own NWCLA Board Members, Realtors and property owners, Jamie Merrill and Jay Johnson. Jamie and Jay will be covering many of the hot topics we need to be aware of in this changing real estate market and how to continue being successful landlords in the state of Massachusetts. I have worked with Jay buying properties and benefitted from his market expertise. Jamie is a veteran investor although you wouldn’t think of it to look at her because she looks so young. Don’t let her looks deceive you. Jamie has a one-two punch being a highly educated and well informed Realtor, as well as being a seasoned expert property manager of her own real estate investments. This month’s meeting will be a special treat to

all attending members to get their unique perspective from all sides of the fence. Not only as professional Realtors who have tenure in the market, but also as the season landlords who talk the talk and can definitely can walk the walk. Bring your best questions with you for the open floor forum discussions.

We also have representative, Mary Ann Cantu, President ofNational Tenant Network, Boston Chapter. I have read testimonies from some of of member’s emails who are excited to have them as speakers as they have used their services in the past with outstanding results. We do the best we can at the NWCLA to keep you informed on best practices for screening, but at this month’s meeting, you will learn from the best. She is not just a member of the National Tenant Network, Mary Ann is the president, and this is a privledge and unique opportunity to have her address our members in our open forum format.

We are also planning to have a brief presentation from Sherri Way next month from the Massachusetts Rental Housing Association to inform us about updates to the Rent Escrow Bill and what we can do to see it gets passed. You don’t want to miss this event and we absolutely must take action together to contact our Senators and Representatives to be heard on this topic. Get involved! Take action! See results! Sincerely, Brian LucierNWCLA President 2009 – [email protected]

In This Issue Page

President’s Letter 1 NWCLA Useful Notes 2 NWCLA Members’ Sponsor Testimonial Program 2 Upcoming Topics, 4 BUY-SELL-TRADE-FREE 4 NWCLA Member Testimonial for: Country Fuel 5 Landlord of the Month: Anonymous 5 Web Site: http://www.massrha.org/ 5 Lawyer’s Corner with Michael J. Ciota – Identity Theft 6 – 8 Real Estate Investment is About Finding Good Deals 8 – 9 Strategies for Strong Note Resale 9 – 10 Things NOT to do to stop foreclosure on your home 10 Home Maintenance Checklist 11 Schmidt’s Smorgasbord 12


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NWCLA Membership $80 Membership Benefits Include:• Monthly NWCLA Newsletter• Local Drug Arrest List • Housing Court Eviction List• Member to Member Support• Informative Monthly Seminars• Association Attorney• Legislative Updates• E-mail Alerts on Housing Issues• Web Site - www.nwcla.com• NWCLA Blog posts at

www.realestateinvestor.com

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PresidentBrian Lucier [email protected] Vice PresidentDebbie Greelish [email protected] TreasurerTina [email protected]

Secretary/ClerkTheresa [email protected]

Membership DirectorBrenda [email protected] Newsletter DirectorRick Dupuis [email protected]

Welcoming CommitteeTheresa [email protected]

Advertising DirectorJay Johnson [email protected] Web Site DirectorBrian Lucier [email protected]

Oil Program DirectorJay Johnson [email protected] Food CommitteeDave & Laura Schmidt [email protected]

Program ManagerJeff Landry [email protected]

Legislation DirectorJamie Merrill 978-407-7174 [email protected]

Board MemberMatthew Moore 978-345-7971 [email protected]

Board MemberRon LeShane Jr. [email protected]

NWCLA Board Members “NWCLA – Landlords Helping Landlords”

We are proud to serve the following communities:Ashby Ashburnham Athol Clinton

Fitchburg Gardner Harvard Hubbardston

Lancaster Leominster Lunenburg Phillipston

Sterling Townsend Westminster Winchendon

P.O. Box 276 – Fitchburg, MA 01420 – 978-345-1887 – http://www.nwcla.com

NWCLA Members Testimonial Program Every month we are going to extend to you an opportunity to highlight the positive experiences you’ve had with any of the vendors in our newsletter. Please take a moment to e-mail me a few words describ-ing the work that was done for you and the name of the contractor who completed the job. Your affirmative input will let other property owners in our group know that working with our advertisers can be a positive experience. This is also a great way to say “thanks” to the business men and women who contribute to the Northern Worcester County Landlord Association and our goal of being the best landlords that we can be!

Jay’s e-mail is [email protected] or mail him stories to:NWCLA, ATTN: Jay Johnson, P.O. Box 276, Fitchburg, MA 01420

NWCLA Useful Notes• Summary Process Summons &

Complaint Forms are available for $5.00 NWCLA meetings

• The newsletter committee needs you to E-mail your stories, ads, helpful hints, to [email protected]

• The Successful Landlord is avail-able to purchase at our meeting. Cost is $40.00. while supplies last

• Anyone seeking past eviction lists please go to our web site to download the latest copy.

24-Hour Heating & Plumbing Emergency ServiceFREE Estimates • Residential & Commercial Work

Senior, Active Military AND Volume $$DISCOUNTS$$Pre-Pay & Budget Plans • Online Bill Payments • Energy Saving Products

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Full BURNER ServiceFull PLUMBING ServiceFull AIR CONDITIONING Service

“Why Make More Than ONE Call?. . .When COUNTRY FUEL Does it All!”

212 West St., Gardner, MA978-632-1100 • 800-995-6395

MA LIC #10588


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Our office is a dedicated Real estate Law Office. We strict-ly handle Real Estate conveyancing matters. Count on us to assist you in your next Real Estate transaction. Visit our web site for more information and news updatesOur clients consist of: • Real Estate Investors • Real Estate Buyers and Sellers • Local and National Mortgage Lenders • Private Mortgage LendersWe provide our clients: • General Counsel in the sale & purchase

of Real Estate • Settlement & closing services • Title examinations • Title Insurance • Escrow Services

100 Erdman Way – Leominster, MA Tel: 978-847-0104 – Fax: 978-847-0105

www.myrealestateattorney.net

Member of the Real Estate Bar Association of Massachusetts

The Law Office of

David R. Rocheford Jr., P.C.Real Estate Law

You have the right to choose the LOWEST COST Eviction Mover / Public Warehouser

See our web site at:www.evictionmover.com for information and licensing or call

1-617-966-6684

DON’T GET RIPPED OFF!

NWCLA MEMBER DISCOUNTS We hope you will find these discounts helpful

for the maintenance of your properties

Aubuchon HardwareGroup # 1000501 – Membership card required

20% off Glidden paint 10% off merchandise

Grand Rental StationCash Acct. # *195 – Membership card and

Photo ID required 10% off

Maki’s Building Center Cash Acct. # *195 – Membership card and

Photo ID required 2% - 10% off

Sabourin HardwareMembership card and Photo ID required

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Please Note: The information in this newsletter is not intended to be construed as legal, accounting, or other professional advice. Seek legal advice from licensed professionals for answers relating to your particular questions and circumstances.


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FOR SALE 2 Stoves 2 Refrigerators1 Washing Machine1 3-bay metal sink1 plastic utility sinkGreat for your apartments! Starting at $100.00Call Tim Damon @ 978-297-5254 __________________________ http://www.forrentorsale.net/ 3 different Ken Roberts training videos, and tapes complete with the manuals. Call Mark @ 978-502-5723 or e-mail: [email protected] __________________________NEW, sliding glass door unit for a 4 foot tub enclosure. Hard to find. Paid $200., Will sell for $100. Call Marria @ 978-534-5982 ___________________________ 1.) Used HP MX.70 17 inch desktop monitor color grey apx 4 yrs old not used for 2. Complete with box manual, pwr cord Excellent condition like new.Asking $65.00 or BO. First $50.00 takes it2.) Also have HP 845c color ink jet printer (grey) excellent condition like new with pwr adapter, no ink. Asking $35.00 or Bo. First $25.00 takes it.

Will sell all items above for $75.00 cash. All items are in working order and sold as is. I have all boxes; will deliver for slight fee w/i 30 mile radius of Fitchburg. These are my sons units - I need the room, he needs the money. Call Ken @ 978-342-0639 or e-mail: [email protected]___________________________36” x 80” outside door, hardwood with 6 windows, with frame. Dead-bolt lock included. $50.00 or BRO call Ken Anderson at 978-534-9533 or 508-641-1559 ___________________________ 4 COLOR MONITORS!!! 19”& 20”VIEWSONIC Each in excellent condition. Left overs from recent professional graphics studio upgrades. Asking $80 each or BRO call Brian at 978-448-3873 or [email protected].

REAL ESTATELOOKING FOR INVESTORS!!!Seasoned real estate investor seeks other like-minded investors to partner on large apartment complexes. Call Brian at 978-448-3873 for more information or e-mail. [email protected] ___________________________Looking for Property in Gardner, Leominster, Athol Areas. Any and all calls welcome for 10+ multi-family units. Have financing approved and ready to go. Call 978-448-3873 and mention this ad from the NWCLA Newsletter for more information. Ask for Brian. [email protected] ___________________________Timeshares Available For Rent in Aruba, Florida, Las Vegas. Any and all calls welcome 978-448-3873 and mention this ad from the NWCLA Newsletter for more information. Ask for Brian. [email protected] ___________________________Ad listings are free to members. There are three ways to submit your ad: (all ads are subject to review and editing)1.) Bring your classified ad(s) to the

meeting and post on the bulletin board

2.) E-mail your classified ad(s) to: [email protected] 3.) Mail your classified ad(s) to:

Attn Terry NWCLA PO Box 276 Fitchburg, MA 01420

a.) State classification – Wanted, For Sale, Free, etc.b.) Describe the item – color, size,

condition, age, model number, price, etc.

c.) Contact name – first and last name please (must be NWCLA member)

d.) Contact information – telephone and or e-mail address

All ads subject to space limitations in our newsletter.

BUY-SELL-TRADE-FREE

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NWCLA Program Schedule 2009 April 9, 2009 Will feature Mary Ann Cantu, President

of National Tenant Network, Boston, and our own Jamie Merrill and Jay Johnson

May 14, 2009 Representatives from Housing Court that will address our landlord/tenant questions in a casual open forum.

June 11, 2009 Representatives from State Police will address our landlord/tenant questions in a casual open forum.


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Useful Web Site of the Month http://www.massrha.com/The Massachusetts Rental Housing Association (MRHA) is a statewide organization which helps landlords through education, networking and influencing the legislation. The MRHA is an umbrella organization consisting of over 20 independent affiliate associations around the state.

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NWCLA Members – Did You Know?... That Legislation Director Jamie Merrill has been tracking pending legislation that effects all of us as land-lords including helping members deal with out of town landlords? Be sure to visit the Legislation page on the NWCLA Web Site for this information and more related legislation topics. Take Action!!! http://www.nwcla.com/

NWCLA Members’ Testimonial for Our Sponsors

Country Fuel When we purchased our rental (Foreclosure) in Gardner, we needed the water turned back on, furnace serviced and inspected. We chose Country Fuel initially because they are close to our house. We could not have made a better choice.

First they came to turn on the water and when we did, a pipe burst. They had the plumber there in 15 minutes to fix. We have had a numerous amount of problems due to a tenant that have had us calling Country Fuel quite a bit. All we have to do is ask for Lenny and say our first names and he knows exactly who we are. The boiler in our house is steam and there is only one for the whole house (which we have Lenny working out a quote to split the heat.). What I like is the fact that Lenny listened to our needs and gave us all the options that fell into the parameters of the job; he did not just try to sell us the most expensive. They do all this work with us and we do not even get our oil from them (due to timing in signing a contract). We will be in the future.

There is one “BIG” thing I would like to share that most of us never think of, these guys have plumbers. Since the Furnace business is on call 24/7, so our there plumbers. We had an incident (again, the tenant) that plugged our sewer pipe going to the road solid. We got a call from another tenant at 7PM on a Sunday night. I took a shot and called Country Fuel. They have a live person that answers and by 7:30, there were two plumbers fixing our problem and the fee was incredibly low. When was the last time an independent plumber answered a call on a weekend? We feel that Country Fuel is an excellent company with good, honest people (not always what you find) and we would recom-mend them in a second, as we said, we are going to be splitting the heating in our two family and there isn’t a question in our mind who is doing it.

Lenny and his crew are great folks, always polite and clean and they know their business. We welcome them as new sponsors of the NWCLA.

Fellow NWCLA Landlords,David & Laura Schmidt

Landlord of the Month Landlord Name: AnonymousCity/Town of property location: Gardner, Athol How long have you been a property owner? 8 yearsHow many units do you own or manage? 32 units Total occupancy rate today: 93% + occupancyWhat is your best tenant screening tip and/or tool? Go to the NWCLA web site member section to

download and search the Drug Arrest and Housing Court Eviction Lists. ALWAYS confirm incomes, and speak with the current and previous landlords.

What advice would you give a new property owner? Make sure you have a written rental agreement that clearly

defines the do’s, don’ts, and consequences for failure to comply. Learn the eviction process at Housing Court BEFORE you need to appear before the Judge. Simple mistakes can void your case.

What do you see as your biggest benefit as an NWCLA member? The meetings are great, filled with a lot of positive energy

and vital information for Massachusetts Landlords. Great members, referrals for vendors, networking and get the Successful Landlord for $40, it’s cheaper than a lawyer.

What changes/subjects would you like to see at the monthly NWCLA meeting? It seems at the meetings we are getting a lot of new

members? Can we start having name tags to make it easier to break the ice for the newbies to the NWCLA?

Note: All subject matter will be reviewed prior to printing.


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LAWYER’S CORNERBy Michael J. Ciota

REGULATIONS DESIGNED TO PROTECT AGAINST IDENTITY THEFT

A new statute affects anyone in Massachusetts who keeps personal information about a

Massachusetts resident. In October 2007, G. L. c. 93H took ef-fect. The statute regulates the security of certain personal information. The Office of Consumer Affairs and Busi-ness Regulation promulgated regula-tions at 201 CMR 17.00, which estab-lishes standards for protecting this personal information and computer system requirements for all businesses, non-for-profits, and any other person or organization holding personal infor-mation about Massachusetts residents. The statute is intended to prevent identity theft. This article is only a brief summary of the regulations. You need to read them carefully and comply with them fully.

1. DEFINITIONS Personal information means a Massa-chusetts resident’s first name / first initial and last name in combination with any one or more of the follow-ing data elements that relate to such

resident: (a) Social Security number; (b) driver’s license number or state-issued identification card number; or (c) financial account number, or credit or debit card number, with or without any required security code, access code, personal identification number or password, that would permit access to a resident’s financial account. “Per-sonal information” does not include information lawfully obtained from publicly available information. first name (or initial) and last name of Mass. resident in combination with one of the following

1. SSN; 2. Driver’s license (or state ID card)

number; 3. Financial acct. number (including

credit/debit card number ( with or without security code)

BUT NOT information lawfully obtained or made available from publicly available information

Breach of security means the unau-thorized acquisition or unauthorized use of unencrypted data or, encrypted electronic data and the confidential process or key that is capable of com-promising the security, confidentiality, or integrity of personal information, maintained by a person or agency that creates a substantial risk of identity theft or fraud against a resident of the commonwealth. A good faith but unauthorized acquisition of personal information by a person or agency, or employee or agent thereof, for the

lawful purposes of such person or agency, is not a breach of security un-less the personal information is used in an unauthorized manner or subject to further unauthorized disclosure. !unauthorized acquisition or use of: » unencrypted data or, » encrypted electronic data +

the confidential process or key capable of compromising the secu-rity, confidentiality, or integrity of personal information

2. THE DUTY IMPOSED Duty to Protect the Information and Standards for Protecting Personal Information

Every person that owns, licenses, stores or maintains personal informa-tion must :

1. develop, implement, maintain and monitor

2. a comprehensive, written infor-mation security program for any records with personal informa-tion. The program must :

a) be consistent with industry standards;

b) have administrative, tech-nical, and physical safe-guards;

c) ensure the security and con-fidentiality of the records;

d) consistent with protections imposed by governmental regulations.


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3. THE STANDARDS The law evaluates the security pro-gram and determines compliance taking into account: (I) the size, scope and type of business of the person who is required to safeguard the personal information, (ii) the amount of re-sources available to the person, (iii) the amount of stored data, and (iv) the need for security and confidential-ity of both consumer and employee information. However, every security program must include, at least : • Designating at least one employee

to maintain the security program;• Identifying and assessing rea-

sonably foreseeable internal and external risks to the security, confi-dentiality, and/or integrity of any electronic, paper or other records with personal information, and evaluating and improving the effec-tiveness of the current safeguards for limiting such risks. This includes : (I) ongoing employee (including temporary and contract employee) training; (ii) employee compliance with policies and procedures; and (iii) means for detecting and pre-venting security system failures.

• Developing security policies for employees for whether and how employees should keep, access and transport records with personal information outside of business premises.

• Imposing disciplinary measures for violations of the security program rules.

• Preventing terminated employees from accessing records with per-sonal information by immediately termination of their physical and electronic access to records, and deactivating their passwords and user names.

• Taking reasonable steps to verify that third-party service providers with access to personal information have the capacity to protect such personal information, including (I) selecting and retaining ser-vice providers that are capable of maintaining safeguards for personal information; and (ii) contractually requiring service providers to main-tain such safeguards. Before per-mitting third-party service provid-ers to access personal information, you must obtain a written certifica-tion that the service provider has a written, comprehensive information security program in compliance with the regulations.

• Limiting the amount of personal information collected to what is reasonably necessary to accomplish the legitimate purpose for which it is collected; limiting the time such information is retained to what is reasonably necessary to accomplish a legitimate purpose; and limit-ing access to those people who are reasonably required to know the information to accomplish a legiti-mate business purpose or to comply with state or federal record reten-tion requirements.

• Identifying paper, electronic and other records, computing systems,

and storage media, including laptops and portable devices used to store personal information, to determine which records contain personal information, except where the comprehensive information security program provides for the handling of all records as if they all contained personal information.

• Imposing reasonable restrictions on physical access to records with personal information, including a written procedure that describes how physical access is restricted; and storage of records and data in locked facilities, storage areas or containers.

• Monitoring on a regular basis to ensure that the security program is operating reasonably to prevent un-authorized access to, or unauthor-ized use of, personal information; and upgrading information safe-guards as necessary to limit risks.

• Reviewing the scope of the secu-rity measures at least annually or whenever there is a material change in business practices that may reasonably implicate the security or integrity of records containing personal information.

• Documenting responsive actions taken in connection with any in-cident involving a breach of secu-rity, and mandatory post-incident review of events and actions taken, if any, to make changes in business practices relating to protection of personal information.

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The deadlines for compliance are:

1. May 1, 2009 for general compliance;

2. May 1, 2009 for ensuring that third party providers are capable of protecting the data;

3. May 1, 2009 for ensuring laptop encryption;

4. January 1, 2010 for having writ-ten certification from third party providers; ensuring security of portable devices ( PDAs, DVDs and memory sticks etc);

For more information and a copy of the regulations, go to the website of the Massachusetts Office of Consumer Af-fairs and Business Regulation at http://www.mass.gov/?pageID=ocahomepage&L=1&L0=Home&sid=Eoca

Real Estate Investment is About Finding Good DealsBy Pedro Gonzalez It is no secret that investing in real estate can be a good way to poten-tiallymake a lot of money and build wealth. It has been said that real estate investing has created more millionaires in the United Stated than any other in-vestment field. However, it is also true that the wrong investment can end up costing you a lot of money. This is one of the reasons that makes investing in real estate so intimidating.

The goal of real estate investing is to locate real estate investments that can give you a good return. If you have been watching any late night televi-sion, you have probably seen infomer-cials about investing in real estate (You know which ones I am talking about). Those infomercials make it seems very easy just to go out the next day and start making deals. Eventhough it is not that simple, where the deals are

just like low hanging fruits waiting for you to pick them, the opportunities are available no matter where you live and what market you are looking at. The key to your success are:• Have a plan• Develop your power team of

professionals (buyers, realtors, title company, insurance agent, lawyer, accountant, banker, etc)

• Develop a mutiple prong system to get leads for good deals

• Have a strong desire to develop wealth through real estate investing

• Persistence• Take action

How can you find these potential profit-making deals?

1. Your first avenue for finding good deals is the local newspaper. Just search for properties that are listed directly by the owners who want to avoid paying commission to the real estate brokers. Since the owner is saving on the commission that they would otherwise have to pay to the broker, they would probably be able to offer a lower price to you and be more open to negotiations.

2. Search website like Craigslist for real estate investment. In fact, you would be astonished by the number of real estate investment opportunities you are able to locate on the internet. Not only that, searching for real estate investment opportunities (i.e. property for sale) is much easier and faster on internet than anywhere else.

3. Develop a good relationship with other real estate professionals. Real estate professionals like real estate agents and wholesalers can be an excellent resource for you when you need to buy or sell your properties.

4. Locate builder-developers. Often they have a large inventory of properties and are motivated to sell units at a discount.

5. Look for Foreclosure-REO. When lenders foreclose on a deliquent loan, they end up with Real Estate

Owned (REO) which they general-ly prefer to sell rather than operate. REO properties can sometimes be a great source for good deals.

6. Look for management problems/dis-tressed properties. Properties in need of maintenance can be an indication that the owner no longer has the heart (money) to continue manag-ing the property and might consider selling the property. A phone call or a visit to the owner might be all it takes to negotiate a good deal.

7. Another good way to hunt for real estate investment opportunities is by using the services of real estate brokers. Some people use real estate agents as their first (and maybe the only) touch point for getting real estate investment op-portunities. The real estate agents act as information hub for people looking to buy property. In fact, a lot of sellers find it much more convenient to sell their properties by listing it with real estate agents.

8. Multiple listings service is an-other good way to find real estate investment opportunities. Since the multiple listing book is pro-vided only to the real estate agents and not to the general public (unless you are very lucky), all the cream (good real estate investment opportunities) would have already been taken before you get to see the book. The key here is to look for expired listings that didn’t get converted to a deal.

9. Divorce settlements are another good real estate investment op-portunity. Attorneys can be a good resource for this type of properties.

10. Newspaper ads. Ads are an inexpensive way to reach a lot of people. The trick is writing the ad itself. You will often see ads that say “I buy houses”, but there are so many with this header that yours may not stand out. Think like the homeowner in trouble you are try-ing to reach – what is it that they need? Money. One suggestion is placing your classified ad under the “money to lend” section.

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Conclusion: Real estate investment is really about finding good deals. And finding good deals does take some effort, a plan of action, persistence, taking action on your plan, and follow up.

Strategies for Strong Note Resale When property sellers need to re-ceive as much cash as possible imme-diately for the down payment on their next house, it is critical to anticipate this need in order to use seller financ-ing to their advantage.

Getting top dollar for a note

In a typical seller-financed closing, the seller only receives cash from the down payment at the time of sale. This amount could be used to pay the real estate agent and put the remainder toward their own down payment on another house, but in many cases, the amount received is not enough. In ad-dition, sellers who uses private financ-ing to close the sale will not get the full amount financed when the note is sold.

Most sellers need as much money as possible when they “cash out” their newly created note, so their objective is to sell the note at the lowest discount possible. And to do this, they will need to create a secured cash flow that is at-tractive to note buyers.

Note pricing factors

The size of the discount - i.e., the difference between the purchase price and the remaining balance - depends largely on factors such as the specifics about the payer, the property/price, and the note terms. If the note is cre-ated without these important criteria in mind, the seller may have a difficult time finding a buyer to pay the amount that the homeowner needs.

The Payer

Clearly, there isn’t much the seller can do about the “quality” of the payer because most people interested in ac-cepting seller financing are higher-risk borrowers. Still, if there is more than one party interested in buying their property, sellers offering financing can still discriminate based on credit history or the amount of the down pay-ment offered.

The Property/Price

Similarly, the seller can’t change the basic facts about their property - where it’s located, the type of structure, or its age or condition. But, the seller can control the price they set for their property.

Most sellers have a specific amount in mind that they need to get out of a sale. In traditional real estate sales, get-ting that money usually is determined by the property’s price. But with seller financing, there is another step that is taken before the seller ends up with the total amount of money they were look-ing for - the note must be sold.

Since private notes are typically sold at a discount, the seller must set their price higher than the amount they were looking for to compensate for the drop that will come with the buyer’s offer. By setting the price slightly higher than market value, the seller can create a note that sells with a minimal discount. Individuals that don’t qualify for con-ventional funding are motivated to buy real estate, even if the price is some-what higher than market value.

Increasing the sales price and the implied value of the property will not actually affect the buyer’s discount, but the adjustment could lead to more money in the seller’s pocket.

A higher sale price means a note with a larger unpaid balance, which could still bring the seller the desired net amount after discounting. Keep in

mind that higher sale prices can also lead to larger down payments (as a set percentage of the price), resulting in more money in the seller’s pocket.

The Note Terms

The most important thing for sellers to do is to structure their note so that the buyers won.t be forced to incorpo-rate a deep discount into their offers. From the buyer.s point of view, higher interest rates and shorter terms are pre-ferred. The actual offer made is based on the yield the buyer is looking for; in general, higher yields are associated with riskier notes. The discount is di-rectly related to the difference between the interest rate on the note and the buyer.s desired yield.

While sellers can.t know exactly what a buyer.s required yield will be, the seller can certainly create a note that could minimize the expected dis-count. Generally, buyers will want to receive a yield anywhere between 12% and 20% on a note. While yield param-eters will fluctuate with the market, a 10% yield is typically the lowest they will accept for new notes.

A note creation example

Because buyers usually want to earn a yield above 12%, creating a note with an interest rate under 10% would auto-matically mean a steep discount when the note is sold.

For example, creating a cash flow with a 3% interest rate doesn.t make any sense if the seller needs to get top dollar for their note, because there is already a seven-point difference between the in-terest rate and the buyer’s desired yield. In addition, most buyers will create a gap in their favor by yielding at least one point more than the interest rate.

Sellers can also avoid unnecessary discounts by reducing the terms of their notes. Another part of a buyer’s discount is based on the time-value of money principle, meaning that notes

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that take longer to be paid off will usually be discounted accordingly. An ideal term for a private secured note is between five to ten years (60 to 120 months).

Conversely, it isn’t a good idea to shorten the term down to two years or less because a foreclosure situation will be created - the monthly payment will likely be too steep for the payer to keep up with for long.

By keeping the eventual note buyer’s criteria in mind when creating a private note, property sellers can ensure that their real estate note deal works out the best for them. and that they net the highest amount possible when a cash settlement is reached.

Things you ought NOT to do if you want to stop foreclosure on your home Life is full of uncertainties and any event such as job loss, divorce, reloca-tion, prolonged sickness, etc. could adversely affect us. The financial re-percussions of such unfortunate events may force you into a situation where you are unable to make your monthly homeloan repayments. If you are a vic-tim of such unfortunate circumstances, and have already missed three or more months of homeloan repayment, you could be faced with a foreclosure on your home. Before things go this far, let’s take a look at a few precautions to help you prevent a foreclosure.

Don’t take a second mortgage or eq-uity line of credit: If you have equity on your home you may qualify for a sec-ond mortgage or equity line of credit in order to consolidate bills. No doubt, this will momentarily improve your financial situation in an emergency, but don’t forget that you are foolishly incurring greater indebtedness. Never add to your existing debt unless you have an effective plan for meeting these new obligations during your depleted financial phase.

Don’t create a record of unexplained chronic late payments: Lenders fore-close only as a last resort to limiting further losses on a defaulted loan, as foreclosures cost them more than it can compensate. No wonder, when homeowners fall behind on payments, lenders take the initiative to work with them to bring the loan current. How-ever, your lender’s willingness to help you out with your current problems will depend considerably on your past payment records. If you have been consistently making timely payments without any serious defaults your lender will be more than willing to cooperate and help your tide over your present crisis. Therefore, it is crucial that you don’t create a record of unex-plained late payments. Always stay in communication with your lender about your financial situation.

Don’t think of leaving your home: The prospect of foreclosure is such a trauma that many homeowners overreact by deciding to just pack up and leave. Vow and resolve to face up to this problem head on rather than thinking of running away. Such deter-mination is crucial to stop mortgage foreclosure before it happens. You must realize that there exists several effec-tive ways to stop mortgage foreclosure. Remember, once you fail to stop mort-gage foreclosure, this will always be reflected in your credit record. On the other hand, if you succeed in stopping mortgage foreclosure, not only will you be able to keep your home but also have a positive credit rating for future.

Don’t hide your financial facts from your lender: If you find it difficult to make your regular mortgage payments, communicate this to your lender at the earliest. With their cooperation you may qualify for assistance. For instance, there may be another loan better suited to your needs. They may help you out with a special repayment plans, tempo-rary suspension of mortgage payments, mortgage modification, etc. All this will depend upon how transparent you are with your lender about your financial status, which you can substantiate

by furnishing complete proof of your income, expenses, and debt.

It is never too late to start taking pre-cautions. Your home is precious to you, so don’t let any opportunity slip by to improve your finances, rather than face the ugly prospect of a foreclosure.

Ginny’s FOOD DRIVE Bring your canned goods or non-perishable food items to the next NWCLA meeting Get involved and make a difference to what Ginny has been doing for years for the local community. This is also another way to get the word out about how our landlord association is helping our community By participating in the food drive at the monthly meeting, you also get a free raffle ticket for our monthly member’s incentive program raffle for door prizes.

Invite NEW MEMBERS to Join Do you know someone thinking of becoming a landlord or property manager? If so, invite them to become an NWCLA member. It is the mission of the NWCLA to educate, inspire and assist landlords in their business. The membership of the NWCLA is filled with knowledgeable, ex-perienced and helpful people. Meetings are held the second Thursday of each month at 7:00 PM. Contact Brian Lucier via email at brian @bhbgroup.com or call (978) 448-3873 for more info.

NWCLA Bucks Up for Grabs For each new member that you refer to NWCLA , you will receive $10 (ten) dol-lars in NWCLA bucks. You may redeem these dollars at our monthly meetings to buy items that will be available for sale or… you may save them up towards your yearly membership fee.

The Successful Landlord Is a must have for your landlord library and is now available to purchase at meet-ings. Cost is $40.00.

Story continued from Page 9



To Do As Needed

Close fireplace damper when not in use Fix leaky faucets Unclog slow-running drains

Monthly

Inspect and test smoke and fire alarms Inspect and replace filters as necessary (air conditioner, furnace, pool, and so on)

Clean/vacuum grill and inside compressor unit of central air conditioner, when in use

Walk around the house exterior to check general condition

Spring

Replace smoke and fire alarm batteries (at least twice per year)

Cut back any trees or shrubs touching the exterior (twice per year)

Inspect and touch up exterior paint Inspect foundation for water penetration, settle-ment, and cracks

Inspect or treat exterior wood for splintering, decay, and insect damage

Inspect window insulation and remove storm windows

Clean exterior of upper-story windows (twice per year)

Install window screens, repairing as needed Clean gutters and inspect downspouts (twice per year)

Inspect roof for warping, aging, moss, and cracking

Perform seasonal pest control (quarterly) Summer

Inspect exposed plumbing areas for dampness (twice per year)

Fix loose or cracked caulking around tiles, sinks, tubs, showers, toilets, and counters

Inspect appliance hoses and ventilation according to owner’s manuals

Power wash, repair, refinish, and seal decks, reset any protruding nails

Clean and lubricate sliding-glass-door tracks and window tracks

Lubricate door hinges and locks Oil garage door(s) Patch driveway and other concrete, or treat asphalt

Perform seasonal pest control (quarterly)

Fall

Replace smoke and fire alarm batteries (at least twice per year)

Inspect and clean fireplace and chimney Service furnace or other heating system Clean and adjust humidifier on furnace Clean/vacuum heating ducts, grills, and registers Clean upper-story windows (twice per year) Inspect window screens and insulation, and install storm windows

Inspect weather-stripping around doors and replace as needed.

Cut back any trees or shrubs touching the roof or exterior (twice per year)

Clean gutters and inspect downspouts (twice per year)

Trim, cover, or bring in outdoor plants as needed Perform seasonal pest control (quarterly) Place makers for plowing and snow removal

Winter

Recharge fire extinguishers Wax and buff wood floors Professionally clean curtains and drapes Inspect and touch up interior paint Inspect exposed plumbing areas for dampness (twice per year)

Perform seasonal pest control (quarterly) Test for carbon monoxide

Home Maintenance Checklist* For appliance maintenance schedules and procedures, refer to the specific owner’s manual.

May 2008Landlords Helping Landlords

NWCLAP.O. Box 276Fitchburg, MA 01420

Association of the year for 2003


NORTHERN WORCESTER COUNTY LANDLORD ASSOCIATION

Schmidt’s Smorgasbord

NWCLA Monthly Meeting Menu

April, 2009 3 types of sandwiches, Chicken salad, Egg and Tuna salad, also 2 different potato salads, a mac salad, and coleslaw. For desert we have Danish and Whoopie pies; Beverages – Coffee, tea, hot chocolate – decaf also

May, 2009 Beef Stew, bread rolls and butter; Dessert as-sortment; Beverages – Coffee, tea, hot choco-late – decaf also

Dave and Laura are new to this post and want to hear from you. If you have menu suggestions or ideas, kindly talk with David or Laura Schmidt at the food table! We welcome your comments.

NWCLA MEETING NOTICE • SPECIAL GUEST SPEAKERS

April’s meeting will feature Mary Ann Cantu, President of the

National Tenant Network of Boston, and our own NWCLA Board Members

Jamie Merrill and Jay Johnson.

Thurs., April 9th, 2009 7 PM – 9 PM ALL Members are welcome to attend the meeting at

The Monty Tech Cafeteria located in Fitchburg, MA

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