All Forum Posts by: Adam Craig

Thanks for the replies. They bought the house for 164K and they are suing for 150K - I cannot see how this number makes sense, my attorney says they are likely just throwing a number out and seeing what sticks. Essentially they are saying I knew a lot more then I disclosed and they are unhappy about it.

The city had a standard point of sale repair list naming more then 90 items when we purchased the property. We completed all of them and the city inspected and signed off with a compliance certificate. Additionally the sellers had their own home inspector and they came up with a list of about 10 things they wanted fixed which we did and they signed off on it.

At first I was not worried. But when I got my first bill from the attorney for 3000K+ I started to worry about how high legal costs could get even if they buyers dont win. That is why I am going to contact insurance and see if me or my LLC can be covered.

I have been doing flips and rentals for 10 years and I am now going through my first lawsuit. The buyers of a house we flipped in 2018 are suing me personally, my LLC, my wife who was my agent, My wifes broker, their agent, their agents broker.

Long story short its more of a case of buyers remorse and trying to make some cash than anything. We had multiple offers on this completely redone home. They came in 8K over asking. The suit does not describe too many specifics more of a broad range of things not disclosed that were repaired. My attorney said we would find out more when we file for discovery. We didn't disclose anything on the house but everything was redone - Roof/windows/HVAC/the works! Normally we brag about these things but I guess going forward I will attach a list of repairs so know one can use it against met.

So I started this case using my own attorney. She didn't think the case holds much water but it could be very time consuming resulting in high fees. So I am now going to file insurance so I will likely have to go with their attorneys. 

Question - I believe my personal umbrella policy should cover me personally assuming they cannot get me dismissed as an individual. Then my home owners insurance on that property has liability coverage so I should be able to contact them to cover my LLC?

What a nightmare. More than 100 deals I guess it was bound to happen. Definitely going to be safer going forward. Does anyone make buyers sign a hold harmless similar to buying a bank home as is or is that not common for flips?

A friend of mine came to me for some loan advice and I wasn’t sure where to send him. He wants to buy a cabin in PA where he goes all the time for fishing. Asking price is 40K. The cabin has electricity and water but it does not have a bathroom so he cannot find traditional financing as a second home.

He is excellent on paper. He owns a condo and has a long standing good paying job and excellent credit.

Any ideas on where he should look for financing? 

I appreciate all the replies very helpful. I guess I don't know for sure but I don't think this building will attract a lot of big players. Most of the spaces are smaller except for one 1900 square foot space in the middle of the building. It's 5000 square feet total and I am occupying about 800 of it for my business.

I just got a call from the one agents I mentioned and he has an interior designer who's going to write me an LOI the upstairs units which is approximately 1000 square feet.

We have barely broken ground on the interior rehab and I'm have not listed it for lease yet so I will be interested to see what she proposes. I will definitely have my attorney who deals with a lot of real estate oversee the contract.

 Thank you I appreciate the tips. I am really not concerned with the leasing fee. I have a good portion of this building purchased on high-interest so I am more concerned with getting optimal rents and getting the building filled. I explained this to the commercial agent I met and he said they would charge a fee for marketing material and market on all the websites but I already have both of those things. So being smaller units there was not much in it for him he suggested just using him as a referral fee.

the building is only about 5,000 square feet divided into six spaces so we aren't talking huge numbers on the leases with the exception of the middle unit which is about 1800 square feet. You really think there is that much contractual language I should be concerned with especially if I have my attorney look it over? I will contact another broker and see if they have an interest.

We are rehabbing a 6 unit office building - or possibly 4 units if tenants combine spaces.

After years of residential experience this is my first in commercial. I initially planned on hiring a commercial agent to help lease the property. But after meeting with one we decided I will just give them a referral fee if they bring me a tenant since I dont want ongoing management.

Reason being is because we already have our in houses management team, website, marketing materials, photographer,  ect... I guess I was mostly interested in picking their brains on lease structures and going rates.

Now that I am going in on my own I have a couple of questions.

1. Should I do gross lease/NNN/hubrid? The agent I asked about it didnt give me any clear cut answer. He said they have clients that do both. This property is in an extremely desirable downtown suburb location. After doing some comparable research in the area, I figure $1.00 - 1.50 /sq/ft is the going rate. Taxes are about $6500/year, insurance $1400.

2. When charging tenants by square feet - do you include stairs, hallways, storage closets, baths when coming up with this figure it they are going to be exclusive to the tenant?

Makes sense. but we aren't really doing much in terms of building anything out we're just doing carpet paint and lighting which is badly needed it's not optional due to the lack of maintenance. Also one of the units is going to be occupied by me. four of the units are small so it would likely just be one person needing an office not much option for a build-out. then one of the units is large approximately 1800 square feet with six offices so this one has some flexibility or whoever rents it.

the building is dim old and musty so I just don't know if it makes sense to bring anyone through it until we're done

Just closed on 6 unit office building. We just finished the exterior overhaul - paint/trees/landscaping and my photographer is taking photos Saturday. We made a mad dash to get it finished before weather turned so we will have some excellent exterior photos.

Inside we have 5000 sq ft to paint/carpet/lighting/hardwood finishing and some misc. We are planning on 2 months.

Now that we have the exterior looking sharp should we start advertising the 6 units or wait until rehabbed?

Is there a big difference between the seal coating you purchase from big box stores compared to what asphalt companies use?

I notice Lowes and Home Depot carry several different grades of seal coating, similar to paint. The more expensive ones claim longer life span. I have had my handymen put down seal coating on a few occasions and I have hired asphalt companies many times. I save a little money having my guys do it but was wondering if we are using an inferior product? 

Now that I have 6-10 Gas utility accounts at any given time from rehabs or vacancy, I am trying to be more economical with the heat settings this winter.

Turning the heat off is not an option on most because water in the pipes. Most of my knucklehead contractors always forget to turn it down at night so I am going to program the thermostat on each house. A couple questions about setting thermostats...

1. A regular programmable thermostat will do the trick right? No sense in spending big bucks on NEST or similar brands I assume?

2. Does it make sense to crank it way down at night - saw 40* ? I have heard in the past that it will require much more energy to catch back up during the day.