Tag: real estate investing

Posted on by — Leave a comment

HOA Sent An Email To All Homeowners To Pay Up!

This HOA has given me more issues than I care to even describe, oh wait, I have been pretty detailed in everything they have done to this point. The HOA sent an email to all homeowners to pay up. That is right, after this fiasco I have had with them to be able to rent my home out and being denied, and now they are asking all homeowners to pay up their quarterly dues immediately!

Get caught up on everything that has happened to this point following the links below starting from Part I:

 

I have been simply trying to pivot my short term rental business model to a month to month or long term rental business and the HOA has yet to allow me. My goal is to weather through this storm with enough rental income to cover my major expenses in each of my short term rental properties. This should be a temporary thing and I have been able to successfully pivot my real estate investments in each of my properties but this one property.

Here Is The Email From The HOA

This is definitely a long email, but I want to post the entire thing for you to get the full story. If you want to just get to the meat and potatoes, jump to the last paragraph! I have gone ahead and highlighted the part I couldn’t believe they added to the email.

Dear Homeowner,
As promised, this is an update on the impact of Coronavirus on the resort and how we are responding. Obviously, this is a fast-moving situation and while we will attempt to flag up pertinent issues as they arise, all owners are urged to listen to public broadcasts and particularly take the time to understand the implications of the Florida Governor’s Executive Orders (EOs), which detail the State’s response to the unfolding situation and provide instructions for citizens to follow.
The latest “Safer at Home” Order (EO 20-91) relating to “essential services and activities”, became effective April 3rd and expires on April 30th. This EO is wide ranging and we would encourage you to familiarise yourself with its contents. EOs can be found online by a simple search but we shall be posting these on the resort owners’ website for ease of reference. Please don’t ask our staff for guidance on the implications of the various orders, as they are not qualified to advise but if you are in any doubt, do contact the authorities for clarification.
Just for information, for those not actually onsite, all resort amenities are currently closed down and we are operating on a skeleton staff, with strict social distancing rules applied to those visiting our front desk. Our front gate remains covered 24/7, by our own staff during the daytime and by our regular contractor during overnight hours. These measures will be in place until at least the end of this month, when the position will be reviewed in light of prevailing circumstances and, of course, guidance from the authorities.
Also, in accordance with an earlier EO (20-87), in which the Governor temporarily suspended vacation rental operations, we have been refusing new rental admissions and our attorney has advised that we should continue to do so for the duration of the order and of course, any extension, unless for any rental which may be exempt, as prescribed by the Order. If, therefore, you are considering renting out your own property within the duration of the Order, perhaps to emergency workers coming in to help fight the virus, please contact our GM who will advise on what documentation will be required to comply with the Order but again, if you are in any doubt about compliance, please seek legal advice first.
Finally, your Board are currently working with our management team to find ways to mitigate the threat to our financial wellbeing, as we work our way through this crisis and to formulate an “Emergency Budget”, to give us a slimmed-down template to follow over the coming months. We are also looking at the available Government support schemes, which may benefit the HOA and our employees in the short term.
A further update on our financial planning will be provided in the next few days but in the meantime, thanks to all who have already paid this quarter’s fees and to those who have not yet paid, please do send yours in as soon as possible, so that we can maintain sufficient cashflow levels, not only to protect your resort asset but just as importantly, to keep our resort and its residents, guests and staff, safe and secure through these difficult times.
Thank you all for you co-operation and please stay safe,
Resor HOA Board

 

Overall Summary Of The Email

Like I said, this was a very lengthy email. Here are a few things I took away from the email.

First, they are finally listening to some of the feedback that I gave to them in regards to communication. I sent a clear email to the HOA/Board coaching them up to understand that they can’t close down the resort and then send 0 communication to any of the homeowners on what is going on. This is extremely unprofessional from a business standpoint.

Second, they continue to outline the two different executive orders signed into law by the Florida state governor. They even go as far as to tell people to seek their own legal advice if they have questions around what is legal and what is not. They know they are in hot waters right now for how they have handled the situation and they even “claim” they have seeked their own legal advice as well.

Third, they are seeking what they refer to as an Emergency Budget to get through this crisis! Umm…do you understand how a basic P&L statement works? For those of you who may not be familiar, a P&L is a profit and loss statement. This document outlines the expenses and income generated for a business. The HOA, by stating we need to create an Emergency Budget, is implying we will somehow be spending more money than previously by reducing the overall staffing and shutting down all the amenities in the resort. Last time I checked, when you close things and reduce the number of hours people are working, you save money. Not spend more. So I am still scratching my head as to how this crisis means the resort will be incurring more expenses than usual when everything is shut down. And no, they aren’t doing any special type of cleaning in the resort clubhouse. Mainly because it is shut down and everything inside is shut down. So saying they need more money to clean is not a valid point.

Now Time To The Part That Really Pissed Me Off

I continue finding it funny that the HOA thinks they are financial experts on this stuff. Here is the part that not only ticked me off, but also ticked off all the other investors in the Facebook group. This excerpt from the email:

“A further update on our financial planning will be provided in the next few days but in the meantime, thanks to all who have already paid this quarter’s fees and to those who have not yet paid, please do send yours in as soon as possible, so that we can maintain sufficient cashflow levels, not only to protect your resort asset but just as importantly, to keep our resort and its residents, guests and staff, safe and secure through these difficult times.”

So, let me make sure I am reading this right. You are requesting HOA dues from everyone so we can keep our resort and its residents, guests and staff, safe and secure during these difficult times? So you feel morally okay telling people to fork up their dues when you won’t allow me to rent my place long term based off the law allowing it?

Just want to make sure we are clear here. I also want to be clear about another thing. I paid my quarterly dues. On time and in full. Every time. I set everything on auto-payment and I didn’t for one second think to not pay my HOA dues. I pay my dues just like I am supposed to every quarter. These dues, I thought, gave me the right to own and utilize the community for a rental property investment it was meant to be; yet, now I am paying the exact HOA who is preventing me from renting my own place out?

Dang, this seems ass backwards. I can’t believe they had the nerve to put that at the bottom of their email while at the same time they are saying tough luck to all the investors who own in the resort. It isn’t the fact that they aren’t allowing me to rent short term, the law is clear on renting short term. I get that.

It is the fact that they abruptly shut everything down and have yet to offer any alternatives to investors who still have mortgage payments to pay. It is honestly things like this that I believe are going to cause the economy to tank in the next 3-4 months, if not sooner.

In tomorrow’s post, I will outline my response back to their email to the larger group. They continue to handle this situation in ways that amaze me.

If you aren’t already, don’t forget to follow me on Instagram!

Thanks again for all the support and continuing to come back each day for new updates in this saga!

Checkout the next article at the link below!

My Response To The HOA Clearly Asking To Rent Long Term

Posted on by — 1 Comment

My Decision On Moving Forward With A Lawyer – To Pay Or Not To Pay, That Is The Question

I haven’t decided to pay a lawyer just yet to look further into my case. There are a few different reasons I have not moved forward with the lawyer. Before we get into those, let’s take a quick look at where we are at with everything going on. As a real estate investor, dealing with things like this will be a common occurrence. It might not always be a HOA that you have to deal with, but there are always things popping up that will cause issues.

Many individuals won’t buy in communities with HOA’s. I completely understand and respect that real estate investment strategy. Especially when you are going through and reading all of this, it doesn’t make you want to buy a property with a HOA. In my opinion there are good and bad things about HOA’s. The HOA haters will point exactly to this and say this is why nobody should buy in a HOA. I will give my limited view on HOA’s in a later post.

Paying A Lawyer

Time To Jump Into Where We Are In The Saga

The latest and greatest update was the response email I sent to the HOA. The response outlined my disappoint in the HOA and how they have handled the situation. This is an unprecedented time for the entire world. I am a firm believer that you learn more about people during tough times than you do when things are going well. To that point, these are tough times and the HOA and Board have been exposed to how they will handle tough times.

If you haven’t been fully caught up yet, start from the beginning to get all the craziness and context of everything that has happened to this point. Links below!

Trust me, it is worth the time to get caught up and hear the story from the beginning.

Why I Am Not (Yet) Moving Forward With A Lawyer

I have never been in the situation I am currently in. It has been a tough situation for many reasons. First, you have everything going on with the virus and the media. This has definitely scared a lot of people and rightfully so. Second, we had a governor who wrote and signed into law one of the most confusing Executive Orders signed into law in Florida. I thought my 8th grade reading level would be able to interpret a document of law, but I was wrong.

Lastly, I am trying to deal with a HOA that has historically been very difficult to deal with and horrible in their communication. I hadn’t seen any of that until going through this experience. An article I will write tomorrow will show even more into how horrible they are at communicating.

Here is why I am not planning to move forward with a lawyer just yet. At the end of the conversation with the local lawyer I asked for her advice on what to do. She immediately scrolled down to the bottom of the Executive Order to see when it was set to expire. The expiration date of the Executive Order was set for a few days out. She told me there wasn’t much point of paying her $385 per hour (or a “cheaper” associate $220 per hour) to dig further into the law and my HOA Bylaws to see what could be done.

The lawyer did mention there is a chance the Governor of Florida signs an extension of the Executive Order prior to expiration. No need to fret. She said to let the time pass and reach back out to her on the day after expiration.

How Much Would A Lawyer Cost

If I were a betting man, I would say the lawyer would use 4-5 hours of billable time to go comb through all the documents they would need to.

For the high side of that, at $385 per hour, I would be looking at $1,925 in money spent for the lawyer to look through everything and provide her assessment of the situation.

There are a few other loopholes I have not explored yet which I will write about in a later post. This could go a few different ways, so I don’t want to write about it until I have a clear understanding if I am going to explore that option.

In The Meantime, We Wait

For now, we wait. There isn’t much worth doing until the Executive Order expires.

Want to hear something crazy though?! Just 5 hours after my email response to the board telling them how horrible their communication has been…..guess what happened?

An email was sent to all homeowners. And boy did the f**k up another piece of communication.

In tomorrow’s post, I will share the entire email to you. Let’s just say I was amazed about how bad they are getting their wires crossed. Not only that, but how they ended the email was absolutely laughable! JUST WAIT!

Things are still heating up!

Thanks again for reading the blog and staying up to date! Want to support me and get some extra content each month? Subscribe to the blog!

If you aren’t already, don’t forget to follow me on Instagram!

Thanks again for all the support and continuing to come back each day for new updates in this saga!

To read the next blog post in this saga, click the link below!

Part IX: What I Think Of My HOA – The Unedited Version

 

Posted on by — Leave a comment

Ready To Pull My Hair Out On This HOA Issue! – But Time For A Political Response

I am ready to pull my hair out on this HOA Issue! But time for a political response. If work has taught me one thing, it is to understand your audience when you are communicating. This is part of the fun of real estate investing. I hope I can help share this story with any, but if there is one thing I hope you learn is that this is apart of real estate investing. This is what I signed up for when I purchased an investment property. Although I want to blow up on the HOA for a few reasons, it is time for a political response to them and see what they come back with. In tonights article, I want to share exactly what I responded to the HOA with.

Before going into the email, get caught up on the story danggit! There has been so much that has gone on to this point. Again, can’t believe this is Part VIII in this saga and it is only continuing!

 

Now Time For My Email Response!

Before my email response, make sure to checkout Part VI specifically to read the HOA response to my first email. If you didn’t read my first email, well damn! Go back to Part V: Lawyered The S**t Out Of The Final Email To The HOA & Board.

Ok, hopefully you are now up to speed on everything going on. So a quick recap:

  • I lawyered the shit out of an email (thanks to a lawyer editing it) to send to the HOA and Board outlining my stance
  • This lawyer read the law as I did. She didn’t spend much time, but she read and interpreted the Executive Order like I did
  • The HOA responded saying I was reading the Executive Order wrong and they confirmed that with their attorney
  • I spoke with a local attorney to get her interpretation of everything going on, and she agreed with the HOA attorney. She did mention the executive order is horribly written and even in Section B of the Executive Order it excludes resorts, which my place seems to claim to be

Anyways, a lot of crap going on. And it hasn’t stopped. I am not trying to egg on the HOA or be difficult. I am simply trying to rent out my home legally. I don’t plan to ask the government for assistance to pay my mortgages. For one, I think it would be too complicated for me to figure out how to qualify and secondly, I just want to fight through it and get rental income at all my properties to pay my expenses.

The Actual Email I Sent

Here is the actual email I sent to the Board and HOA in response.

 HOA Board, 

To say I am disappointed with how the community leaders have handled this matter wouldn’t be doing the word justice. Communication sent to homeowners has not been clear with specific dates and timelines. The board has not offered other options to us investors instead of shutting us down. Not allowing investors to pivot their business model due to the current situation in the world, from my perspective, is not right. I own in another resort as well, and they have allowed investors to pivot their business models.  
I get safety is the top priority. Allowing people who are stuck in Orlando to quarantine in my safe and relaxing home does not put others in the resort at risk. These are individuals who are either snowbirds or have been down here for months on end and don’t want to return to their homes in the NE until things slow down. The virus spreads through close proximity with others. If people practice social distancing and stay in their homes, these individuals would not be posing a health risk for others. 
-TheYoungRetireeBy33

Hopefully that can be read. Here are the main points I was trying to get across in the email:

  1. I am disappointed in the overall communication from the HOA. Typically, I wouldn’t expect much of any response from the HOA’s I own in based off the situation going on. Maybe just one email saying what they are doing if anything, but when the HOA decides to shut down the resort to any new guests, my expectation for their communication is at a whole different level. I plan to write an entire post early next week on HOA’s and more thoughts on this.
  2. They have offered 0 options for investors who make up 80% of the community for things we can do to rent that they will allow. That is right 0!
  3. I get safety is a priority. This one is going to be a long bullet point, because I take safety seriously. I also have received feedback from multiple people saying I am inconsiderate for trying to rent my place out right now with everything going on. Here is my stance. Yesterday, I was on a meeting with our supply chain team. We had the Senior Vice President of Health & Wellness join the call and give us an update on everything going on. In the conversation he wanted to be clear on how COVID-19 is transmitted. He said what we do know right now is it is transmitted from human to human mainly through someone sneezing or coughing. There are three spots it can enter into your body, the nose, mouth and eyes. COVID-19 can stay in the air for 2-3 hours and can exists on surfaces for up to 72 hours. He ended with saying this, there is significant evidence showing you must be around another individual having COVID-19 for more than 30 minutes to be able to contract it. For all of these reasons, having someone new come into the resort, checking in at security for less than a minute (while practicing social distancing) and then driving to my home will pose no threat to anyone’s safety in the resort.

I Am Still Lost How New Guests Put Others In Significant Harm

Again, I will be the first to say safety is my top priority, always. But with everything that I heard from our Senior Vice President, I am confused how new guests pose a significant risk to the few who live in the resort. While all the resort amenities are shut down, and everyone practicing social distancing, I am so lost as to how my guests will pose a threat to people living there.

Something I Learned From Speaking To A Homeowner In The Resort

I would also like to point something out that one of the homeowners  who is an investor pointed out to me. He told me that the resort, when it opened, was only for investors renting out properties as short term rentals. He mentioned somewhere along the people who got on the board, who also happened to own a property in the resort, added a clause in the Bylaws allowing people to live in the resort full time. This then started to create a very tight knit group of individuals who were always in the community. This group slowly took over the entire HOA board and always have immediately gone to the front desk to speak to the GM whenever they had an issue. Mainly because they were onsite.

Him and I have been going back and forth for the last three days. He said how he believes the homeowners who live onsite all talked to each other and went to the GM of the resort requesting him to immediately shut things down to new guests upon the Executive Order being signed into law. Per this other owners words “the homeowners who live there want to use the resort as their own Alamo of security and we can’t stand by this shit.” Not my words, his.

Anyways…The Plot Thickens

This is not the end to this plot. Just wait till you see what happened just 5 hours after I sent this response email to the board. I keep thinking shit can’t get crazier, but I continue to be more and more amazed around the actions of the Board than ever.

New article coming tomorrow! Stay tuned…cliff hanger 🙂

In all seriousness, it has been fun putting these posts together even though they take a long time to write each night. It would be greatly appreciated if you subscribe to the blog! Each time you go to a new post, you should receive a popup asking for you to subscribe. Thanks in advance for reading and looking forward to tomorrow’s post!

Want to check out the next post!? Click the link below!

My Decision On Moving Forward With A Lawyer – To Pay Or Not To Pay, That Is The Question