Jump to content
The forums have been archived and are now read only. Years of great info saved for your reading pleasure. Thank you! Visit us on Facebook: https://www.facebook.com/NakedInvestor/ ×
The Naked Investor Forums
outlawmp22

Service-members Civil Relief Act

Recommended Posts

Hello everyone! I just want to say how glad I am to finally be a part of this forum. Tons of great information here and hours upon hours of priceless reading so far. I have quite a few different questions, and yes I have read A LOT before I got up the courage to finally register and ask my own so I hope these don't sound like newbie questions and I really didn't know if I should ask them all in the same post or not. But I decided from reading many other posts that I should probably break them up to benefit not only current members but also future members as well.

 

Recently I transitioned from the military and am once again a normal citizen. I currently live in Clarksville, TN which is just outside one of the biggest military bases in the U.S., Fort Campbell, KY. The population is approximately 123k, and earlier this year Clarksville was recognized as the 9th fastest growing city in the U.S. (Not anymore) The city is booming and quite frankly if it wasn't for the military base it wouldn't be what it is. I know this area has a good opportunity for a real estate investor, as a majority of the military personnel do not stay longer than 3-4 years as they are transfered somewhere else. There are tons of rental properties just outside the base and many more all over the city. Which brings me to my biggest concern and question regarding L/O and my situation.

 

With the Service-members Civil Relief Act how would that affect a C/A or SLO?

 

The SCRA allows Active Duty military, Reservists and National Guard to terminate their lease if they are deployed, called to duty for longer than 90 days, or PCS (Permanent Change of Station). It also states that any prepaid rent or security deposit must be returned within 30 days after the termination of the lease.

 

It also allows these personnel and their family members protection from being evicted from a property for a minimum of 90 days (unless by court order) which I presume you would go get a court order anyway to properly evict someone? But it is only for those below a certain dollar amount for rent which is I believe close to $2,900.

 

I know that the option fee is not a security deposit, I also know that the rent credits are the seller concessions so technically it would not have to be given back since the option fee is non-refundable, and the rent credits are only given if they exercise their option to buy. But how would this truly affect a C/A or SLO?

 

Am I just worrying too much, or if they actually hired a lawyer and took me to court would the judge see me as a slum investor trying to steal from the military personnel and their family?

 

Don't get me wrong. I completely 100% believe in the SCRA and its purposes and being former military and having used some of its protection myself, I can tell you it is a very powerful thing and much needed for our military and their family.

 

But am I getting into a gray area here and should just not do these types of deals in this area. Or should I just do a really good job of disclosing everything and making sure they understand that even under the SCRA it is non-refundable and that they are adults and if they wasn't looking to actually buy then they should just go rent from a regular landlord or property management company and not worry about it. Or maybe just add a one page Cover My Assets addendum that they sign stating that they fully understand what is happening and that I strongly encouraged them to seek the advice of an attorney before signing, this is non-refundable, blah blah blah?

 

I feel that if I am protected from my contracts (which I will be getting your manual very soon and be using your contracts in the future) than I will be able to do quite well for myself even if they do break the lease, because I will then have repeat business whether I am doing C/A's or SLO's. Also I think with a lot of people every year having to leave due to a PCS, then there will be a lot more motivation because they have a deadline that they have to leave by whether they like it or not. So I would think there would be a lot more motivation for them to choose my program rather than trying to rent it out or sell it themselves.

 

What do you guys think? I know you guys will give it to me straight, and sorry for the lengthy post.

 

Also Michael by any chance do you offer any type of Military/Veteran discount on your manual? Sorry, had to ask. :unsure:

 

Thanks for any and all replies in advance!

~Smitty~

Share this post


Link to post
Share on other sites

Hi Smitty!!

Let me toss in my 2 cents for what it's worth.

When I get inquiries from service personnel, I approach it like I do when someone calls and says they are "relocating" to my area. I let them know upfront that this is a commitment to purchase, and not a straight rental, and if they don't plan on staying in the house for at least 3-5 years, I recommend they look for a rental.

Especially service personnel. I REALLY want to make sure they are going to be here for the long haul. If they have no clue, I tell them I'd love to help, but my program is not for them.

I'm sure I'm losing some money that way, but who cares. What good have I done if I've taken their money knowing they aren't going to buy?

If they don't know the area, or are hopping from base to base in the military, they aren't a good fit for me, and I have to let them know that.

In regards to the SCRA, it's just never been an issue or even brought up in conversation, because I'm being so upfront with what I do and don't do.

IF you are going to marketing to military people though, I would not only be upfront before they even see the house, but probably add a CYA addendum.

HAving said all that, the rent credits are non-refundable as is the option fee.

Share this post


Link to post
Share on other sites

Thanks pilot.

 

I am on both sides I guess. From my experience Soldiers don't want to live "on base" due to all the politics, strict rules and plain old b.s. associated with it after already having their lives controlled most of the day. When they are "off" they don't want to be controlled just as much as they are when they are at work. So they would much rather rent or buy outside of base. But I hate seeing Soldiers that just don't know any better and end up renting a house or an apartment everywhere they go and then after 20 years of service they have no equity in anything and then get screwed on their retirement and disability. Luckily I am not one of them, but I really want to help people in this economy (to include myself). So I see this as a great opportunity to do both. I know they wouldn't have a ton of equity before they had to move again but at least they would have some. As I said earlier with people having a deadline when they have to move and sell their home it could be great motivation for me to help them out on the seller side and if I do a good job on the deal when they are a t/b maybe I could in the future turn them around as the seller. They would probably be more comfortable with the process since they were already on the other side of the transaction and would kind of know what to expect?

 

I do know that the military (or at least the army) is going towards more of a five years in one place rather than 2-3 years to try and cut down on divorce rates and have some kind of consistency in their life. So this might help but...

 

I definitely do not want to steer people in the wrong direction or be misleading and I would disclose everything up front. But as far as a CYA addendum would go. Since I will be trying to do only CA's at first to build up before I start doing SLO's how would I structure the CYA? Since I would be assigning to the t/b would I sign the addendum and then assign that as well. Or would that be only signed between me and the t/b?

 

Could I make the CYA a part of the assignment document or keep it separate?

 

Thanks for your help!

 

Is there anyone else that has come across this or has any comments?

~Smitty~

Share this post


Link to post
Share on other sites

Hello, Smitty, and welcome to The Naked Investor!

Interesting situation you find yourself facing as you begin your new real estate venture. It's a grey area, indeed. And because it is, my advice, (as much as I loathe hearing/saying this), is to sit down with a local real estate attorney and run your questions by him or her. Preferably an attorney who is also a real estate investor. You might want to try the local real estate club for some references. A 15 to 30 minute initial consultation shouldn't cost much, and might even be free. Whatever it does cost is money well spent, in my opinion. Even though the agreements we use protect our interests and speak directly to some of the questions you raised, we live in a litigious society. You can be sued by anyone for anything and some dopey judge with an axe to grind could see you as the fat cat landlord screwing over the poor, helpless tenants. So to minimize these risks, do your due diligence now and your business should go mostly according to plan and you'll sleep well at night.

 

Also Michael by any chance do you offer any type of Military/Veteran discount on your manual? Sorry, had to ask. :unsure:

Hehe. No need to apologize. Tells me you're a shrewd businessman and you're probably a natural for this biz. At only $97 the manual is already discounted. But what the hell. We're but a week away from Black Friday, the Giants are in first place in the NFC East, and my in-laws are nowhere near me at present. $75 to your door. ^_^

If you're interested, send me a PM and I'll take care of the details.

Share this post


Link to post
Share on other sites

Wow thanks MC! Wasn't expecting that. I will definitely PM you.

 

Thats what I figured better be safe than sorry, I had already planned on taking them to a local real estate attorney like most have suggested to others just starting out. After reading a lot of the forums here I have no doubt that your contracts have everything covered, but you already know that each state has its own hoops to jump through.

 

Litigious society is 100% correct! Even though I didn't know that word until now, I love it here. Learn something new from here every single day and I doubt that will ever change. There is a great family here (unlike every other forum out there) and it is all because of you MC! The more you give the more you receive and this place is just a testament to that.

 

As for shrewd, I guess only time will tell.

 

Thanks for all the help and your generosity.

 

Can't wait to GET NAKED! :unsure:

 

~Smitty~

Share this post


Link to post
Share on other sites
Also Michael by any chance do you offer any type of Military/Veteran discount on your manual? Sorry, had to ask. :unsure:

Hehe. No need to apologize. Tells me you're a shrewd businessman and you're probably a natural for this biz. At only $97 the manual is already discounted. But what the hell. We're but a week away from Black Friday, the Giants are in first place in the NFC East, and my in-laws are nowhere near me at present. $75 to your door. ^_^

If you're interested, send me a PM and I'll take care of the details.

Admin,

Actually, if you don't already know, there's a "LEGAL" way of getting your product (or any product / service) at a discount of 50%, 80% and even 100%!!

Powerful companies have been using this technique successfully for a while now to sell their products and services... and with the holidays just around the corner, what better time than now? If interested, PM me ;)

 

 

BEV!

Share this post


Link to post
Share on other sites
the Giants are in first place in the NFC East

 

~Smitty~, I hope you took MC up on his offer, I'm afraid it may have expired :unsure:

 

Go BIRDS!

Share this post


Link to post
Share on other sites
the Giants are in first place in the NFC East

 

~Smitty~, I hope you took MC up on his offer, I'm afraid it may have expired ^_^

 

Go BIRDS!

;) Damn Giants! :unsure:

Share this post


Link to post
Share on other sites

LOL I did take him up on his offer and I already have an email from USPS!

 

It might not have happened if I let him know I was a Cowboys Fan, we might not be doing all that great this year but we are 1-1 against the Giants.

With the coaching change we are on a roll now, even though we really don't have anything to look forward this year.

 

Thanks MC!

Share this post


Link to post
Share on other sites

×
×
  • Create New...