All Forum Posts by: Andy Sabisch

Here's a general question.  We have a pretty solid lease that has served us well on our properties but on the most recent move-out by a long-term tenant that always paid early, we had to clean from floor to ceiling and everything in between.  Does anyone have a cleanliness clause in their leases that that invoke when they do periodic walk through?  When we do ours we check smoke detectors, fire extinguishers, sump pump operation and overall condition but have not focused on cleanliness.  Be interested in what your thoughts are to include this in a lease (needs to be maintained to some defined degree of cleanliness rather than waiting until move-out and deduct cleaning charges from their deposit).

You should be able to insure it as a MFH from Day #1.  Shop around to see where you can get the coverage you want at the price you want . . . we have done well with Steadily as they shop carriers and can get what you want for the specific situation you are in.  You will probably get other recommendations from other BP members.  If you want details on STeadily and our agent who is first rate, feel free to message us . . . we have used them for move-in ready properties through complete rehab properties (from rehab thru renting to tenants).

What is  it that they are offering you to help in the process.  We have found that finding an investor-savvy agent to buy property on market and a solid wholesaler to buy off market properties is the perfect marriage to find deals.  As far as selling, we have used a flat fee broker for the past 5  years and what we have saved really adds up.  If you know the market and where to price your property, a listing agent is really not going to add a lot to the process and will cost you 3%,  Now before I get blasted by agents posting how mush they add to the sale on the listing side, I will say that if you are not familiar with the sales process, maybe you need to pay the 3%.  We use a listing broker that charges a nominal fee (under $300) and then we get photos taken ($250) and use the listing showing service to set showings.  When an offer from a buyer comes in from their agent, if we accept it, we contact the title company we use and send them the contract . . and they take the deal to the closing table.  Might not be the option for everyone but it saves us about 2.75% per sale which is rolled into the next deal.

See what you are getting on the buy and list end and interview a few agents to find one that meshes with your expectations.

Take a look at the Ring Jobsite Security package... you do need power but unless the property is trashed, getting power is cheap insurance.

SimpliSafe also has a self contained system but needs power.

Obviously price will be the biggest factor to move a SFH but there is more that than just a number. Have you over or under improved the property based on the comps and immediate area? You may have put in granite counters when the other homes have laminate which makes yours more expensive but not desirable for the area. The reverse is also true if you have under improved the property. So before you start dropping the list price, see what the comps LOOK LIKE and ask yourself if yours is in the same ballpark. The last few properties we have put on the market went under contract in under a week with multiple offers but they were priced right, were inline with the area but were done with quality and were in desirable areas.

Unless you are dealing in a low-end market, a home warranty should be a standard inclusion especially for first time home buyers.  I also feel we have done a 5 star job but if something fails, I would rather have a warranty in place for the owners . .  believe in karma.  If the profit margin is tight and $500 makes a difference, see if you can save $$$ elsewhere.

Interest rate buydown or seller assist is common place thanks to the jump in interest rates.  We have only had two offers recently that were not looking at seller assist and in a few cases, they wanted / needed 6%.  The only way we can support that is to adjust the selling price to compensate to some degree - spreadsheets are great in seeing what is needed to make us and them happy.

Hope this helps .  . 

We just listed a property and the photographer we use now offers 2-D and 3-D renderings which we opted for.  I was not there when he took the photos but the renderings were done with his phone.  I can reach out and see what he uses.  This is what they looked like.  Impressed the heck out of me and we asked if he will do it as a stand alone option to help us in the layout phase which he will . . . $75 is not bad in my mind.

There is a difference in the hit someone's credit takes if they are behind in payments or they are in foreclosure so offering to buy the property before it goes into foreclosure does help the owner to some degree and it is not claiming to help them stay in the house.  I have seen some people tell the owners that they can rent it after they sell it but if they did not make payments to own it why would they pay rent and you will simply be heading to court to evict them.  Use the right words so you are not tricking them into discussing a deal that you can't make happen (stay in their home).

First I would make sure that you can do what you want based on the zoning for the property as many areas see MF properties differently than SFHs.  

Second, as you mentioned, I would see if the utilities support the conversion.  Will you split the water line and add a second meter?  If not you will have to cover the cost for both (unless you have a well).  The same with the electric.  If you are not installing a second service / meter, you will be carrying that cost as well.  If people are getting free electricity and water, they tend to be a little less frugal :) .

Then check on insurance costs for a MFH and add that to your projections.

Finally, talk to your contractors and see what requires permits, what their experience has been in getting them to pass inspections, the timeline and the cost.

Factor all of these into the decision to move forward or leave as is - maybe advertise it as a 4/1 with a home office with outside access and get more rent that way.

One last point - I hope that the addition you mentioned was done with permits and is reflected on the tax rolls because if not, you may open a can of worms you wish you had not.

As others have said, are you looking to buy the property at below market pricing or are you looking at helping them stave off foreclosure. If the later, be interested in what tools and resources you have to do that. It seems a more truthful approach is to help them sell their property and avoid the credit hit a foreclosure will produce since you are trying to buy the property (to flip or rent) rather than help them stay in their home.

The first option is to use the "Cash for Keys" approach and offer them some money to move out and find somewhere else to live.  While the state is tenant friendly, eventually they will be forced out and at that point it will be without the offer you gave them and with a black mark on their record making it harder to find another place.

Since you are looking at flipping the property, you need them out to do the work and I would discuss that with them - not the flip portion but the work that needs to be done and can't be done with them in it.  Hopefully that will get them to take the cash for keys option. 

Make sure you figure that offer into your number to see if the deal still makes sense.