All Forum Posts by: Adam Sanders

For the properties that they own free and clear you can pursue traditional owner financing. I would suggest talking to a lawyer in your area about how to structure the agreements properly.

For the properties that are not owned free and clear you will need to get more creative and it will depend on the terms of their current mortgages. Often, the bank won't let the owner of a property sell it to someone else without getting paid off. In some cases you may be able to assume their mortgage but you would need to talk to the bank about that (and it isn't very common any more).

Ultimately it really depends on how much equity your grandparents have in the properties and what they need to get out of them.

If you are finding leads for them it depends on what arrangement you work out. Usually, you would collect enough information from the seller to demonstrate that it is a promising lead and then share that with the buyer. They may want you to make an introduction or they may not. Every buyer is different. Just be very explicit with them regarding what will be required of you and the payment for those deliverables.

Look into insurance and the associated rates. You want to make sure that is baked into your calculations. While the news makes it seem like it is only a matter of time before a tornado will hit your park the odds are still not that high. If you don't have any park owned homes your risks are primarily around liability and loss of income. It gets a lot trickier if you have a lot of park owned mobile homes that you would want to insure.

You should talk to a lawyer about this if your insurance company is refusing to cover the damages. If they won't pay up and you don't pay up your tenants may have pretty good grounds for a lawsuit against you for the damages. 

It depends on the lease (type and provisions) as well as what insurance each party has. There are situations where each one of them could potentially be responsible. 

As long as the numbers work they can be good investments. The biggest added complication is the HOA which would take some additional diligence when vetting a deal. The HOA board controls what those fees are and they can eat up any profits if you are not careful. You also need to make sure that any CapEx funds the HOA manages are funded so that there are not any big looming expenses that are not being taken into account down the road.

Did you offer the owner some cash in order to let the appraiser in? 

How likely do you think it is that they would move out if you refused? Every dog is different but there are usually going to be some added costs to you when you flip the unit if a dog has been there, especially if you have carpet. It can also be a slippery slope, a 12 year old dog doesn't have a lot of time left and once it dies the odds are the tenants will want to get another dog (usually a puppy). The two options I would consider would be:

1. Politely let them know that you do not allow dogs in your units and are sorry that you can't make an exception for them.
2. Take a significant pet deposit and potentially raise rent by a marginal amount per month as well. This gives them the option to have the dog but also can soften the blow a bit by making it their decision.

To me it really boils down to how easily you could find another tenant. If you don't want pets in your units and can easily find other tenants if they decide to move out simply politely inform them that you don't allow dogs. It really won't be awkward unless you make it so.

A few things to consider:

• Zillow estimates are notoriously inaccurate. I wouldn't use them as an accurate indicator of actual market value.
• What would you do if one or multiple tenants move out? If they have been in the units for years there could be substantial repairs necessary to get them rentable. Do you have the means to cover that should it happen?
• With $10k down on a $162K property, you would have a mortgage of $152K. If you are paying $12K a year in interest you are roughly paying an initial interest rate a little below 8% and that interest rate will go up as you pay down principal assuming your payments are locked. That is pretty high considering a commercial loan would be around 5-6% APR. If you plan on holding the property long-term you would want to refi ASAP with a bank at a better rate or negotiate with the seller to get a better interest rate.
• You might want to also budget for insurance, vacancy, and any utilities that you have to pay. That can eat into cash flow pretty fast.
• You should work with a lawyer to get a proper contract written up. Seller financing is great but you want to make sure you don't get screwed over by the seller.

If they have a legal lease in place you can't just evict them in many areas. You would have to wait until their lease is up unless you can convince them to leave early (usually by paying them some fixed amount).