All Forum Posts by: Bill B.

@Carl Hebert

GL, let me know how it turns out. I looked mine up when you replied. 

For 2018 I’m being charged $1326 by “United States liability insurance”  includes a $35 commission to my Allstate agent. 

If you’re single or have an understanding wife and can buy a fourplex in a decent if not good neighborhood for less than $500k that would be my move. You can put down $100k to avoid pmi if you’re willing to ave up another $75k to repeat. If not. Put down $50k pay some pmi and repeat in a year. You just have to live there for a year to get the better rates and first shot at some properties. 

@Jim sestito

No matter what I say listen to Dave, he’s an expert. But my understanding of your situation is...

Sell for $375k subtract $25k in costs subtract $250k tax free profit leaves only $100k. Now subtract what she paid for it. That’s what you owe 15% capital gains on. If she bougth the house for one dollar she owes $15k. If she paid $100k or more she owes zero. 

Only monkey wrench is you say it’s been partially rented. If she’s been declaring that income and deducting depreciation she’ll have to recapture that at 25% but that “part” could probably be 1031’d. Ask @dave foster. In which case you again wouldn’t have any taxes due. If she hasn’t been depreciating it but has been declaring the income you’re going to need an expert. Either way if you’re done with the property I’d say sell now and get $250k tax free. Way better than tax deferred. 

For such a short term if the plan is to sell after that 6-8% per year if they are good risk? an average house in Las Vegas is $250k give or take so you’re helping with a 4% down Payment?

If you tried for a percent of equity gain instead, say it went up 8% per year. After 3 years it’s up 24% and it costs you 8-10% in sales costs? You have a net gain of 14-16% over 3 years if you get well above US average appreciation. But a return of less than 5% per year. 

Remember, Unless they are putting down $20k or more you’re $10k is entirely at risk and would get wiped out in a sale. (sales costs of $20k in the above $250k example)

@Dawn Curry

I wasn’t saying you did anything wrong. 

I was saying...

1) others should have seen it on MLS at contingent but not pending and felt free to make offers.

2) your realtor should have been open to accepting those offers if current buyer was being a PITA.

3) in this hot market you shouldn’t have had to jump through so many hoops. You bent over backwards for thee people and they still weren’t happy. I’m just glad it worked out in the end for you even if it took an extra month or two. 

Yes. You don’t want to not have insurance or have the lender force insurance in place.  Both could be very expensive. but please keep looking. In my opinion and experience $4,000 for a 3 unit seems insane high. Maybe it’s an east coast price? Maybe your deductible is really low? GL. 

I’m sure they aren’t the cheapest. But I’ve had good experiences with Allstate in Vegas. I get “20% off” for multiple policies. I’ve made two $30,000 water claims that they paid instantly. (Two different houses the toilet supply lines failed. REPLACE all stainless supply lines that aren’t braided but rather look like snake scales. NOW!!!). Ps. They even sued a manufacturer and got $7k of which they gave me the first $2500 I paid as a deductible, even though they still lost money.) My only 2 MN properties (one rental one 2nd home) are insured with State Farm as they were insanely cheaper on waterfront properties than anyone else.  I’ve made claims on the 2nd home from storm damages there and they paid fast and paid contractors directly.)

Ps. If you can afford it $2500 deductibles will save you money every few years. You don’t want to make $10k claims. You want to make claims of at least $30k. 

LMK what you find. 

In Las Vegas and in MN that property woulda been active but contingent. I've bought many houses that were contingent. I just have my agent call the selling agent and ask how the sales going and if they think they'll close "on time" (expected close is usually listed in the MLS). Ps. Would they like a backup offer from a guy who's going to close if he gets his offer accepted.

In this case buyer woulda have put in a a written addendum saying we want this fixed or the deals off. Selling agent would call us, we’d say yes. And they’d tell previous buyers to get lost. I would never respond to buyers requests for repairs that aren’t on an official addendum that says do this or the deals off. 

Glad you got it sold in the long run, but in this market you shouldn’t have had to jump through so many hoops. 

My brother in law owns 4 “quarters” (120acres) that are worth about $1mil each along with a couple million in equipment. He also “rents” 4 more quarters for $32k per year each. (Talk about a bad return for those landlords on a $million.) So with 3 million invested he MIGHT have made money last year. He does 1/2 and 1/2 corn/soybeans. Unfortunately corn’s gone from $7/bushel to less than $3. I spend 4-6 weeks 7 days a week in late September and early October cause I enjoy it. But my easy going salt of the earth friendly brother in law is a swearing screaming worried as hell guy the entire time. It’s kinda sad.

Guy, Please check your modern American policy. I seriously just bailed on 3 properties insured by them last month. They inserted a maximum water damage coverage of $18,500. I don’t have any multi family insurance but I have 12 sfr between 1800-3400sf worth $250-$400k each. I have $2500 deductibles with $300k insurance limits. (Where Umbrella kicks in.) they cost a total of $6494. So less than $550 each. That does work out to $2200 for a $1.2mi fourplex but that’s with an “expensive but dependable” company. Main reason for post was to warn about American modern. They switched the water limits on me a year ago after using them for 3 years with no claims. (At the time Allstate had a 6 policy maximum but my agent wrote for an exception.)