All Forum Posts by: Bernard Sims

Recently closed on my 4th 4- plex in Texas (Freeport to be exact). As I was talking to the city Permit official, we'r started discussions my plans for the property. Fron whaat he said afterwards, truly turned this deal upside down. So it turns out the previous owner marketed and sold the the property as a 4 plex, but knowing that the city onlky permitted 2 of the 4 units to be occupied due to zoning. The permit official said the building is on 2 - 50ft lots allowing a single family house on each lot. An exception was made since the building split the lot to only allow 2 of the 4 units to be occupied. Turns out the seller was well aware of this requirement but still marketed it as a 4- plex. On top of that, I acquired the property using a HML including the renovations. So we have already started initial renovations but everything has been halted as a result of the Permit issue. Since my scope of work has totally been nullified, I'm only trying to protect the property while we figure this situation instead of continuing with all the planned renovations. So my question is have any one dealt with a situation where the seller did not disclose important information that would've cause me not to purchase the property? Any legal discourse? And any advice on how to inform the HML?

Thanks guys.  This is exactly the feedback I was looking for.  I think from your responses I will require to use a 3rd party title/escrow to hold the funds and if they do not agree just back out of the deal.  Def a great opportunity but some what uneasy about their terms.  Thanks again. 

I have been a serious investor for about 2.5 years now. Closed on 8 deals (49 doors) mostly multi-family. In all this time I've never been faced wth the following situation and wanted some extra opinions on the matter.

Im about to put an offer on 2 commericial properties. One is a 20 unit and the other is a 12 unit. (Same seller) The seller is requesting WITH the submitted offer that the buyer wires 10% of the offer amount to the seller's attorney to hold while the negotiations takes place. Then if an agreement is made and offer accepted, the 10% goes toward the earnest money. There is a contract that details if the offer is not accepted or if the buyer decides not to purchase during the feasibility period that the money is refunded. In all my history of investing, I've never had a seller make a request like this. Have anyone dealt with a situation like this before? Is it common in some areas. The seller and attorney are in Florida, but the properties are in Texas.

Closing on a multi-family property in Freeport on Friday.  Looking for references to property management companies in or near Freeport. 

Thanks @Katy for the reply.  I did find one that will do it but they can't get to it until about 10 days so any help wouyld be great.  Thanks again

In the last 2 years of being an real estate investor, there's always something around the corner that pops up that I always have to resolve. I've come to know, that's just part of the job. I've closed on about 7 multi-family deals but this one has me in an interesting situation right now. I am in contract for a unique property in Anahuac, TX (30 mins east of Houston, TX). It's a estate sale on one plot of land with 3 SFH and 4 empty slabs for trailers. The current lender have not had luck finding an appraiser to accept the job so my broker suggested that I search for an appraiser myself due to a closing deadline of next Friday, September 13th. If anyone know of an appraiser that does quick/reliable work in the area, please let me know.

Bernard Sims

@Nick Bennett

Thanks Nick. Definitely some seasoned word of advice

My realtor has presented a deal and would like some advice. This deal is a 6 unit 2-bedroom complex. Asking price is $260K. Much work is needed to get to a potential ARV of $447K (skeptical on this value, but owner claims it's based on a recent renovated 8 unit sale across the street)

Potential rent of $650 low side; $800 depending on reno

Potential finance options:

1. HML - no down payment, only closing costs that go around 6 to 8% of loan, Loan covers 100% of purchasing cost and most, if not all, the rehab cost up to 70% of ARV,

6 to 12 month loan. interest only at 13%, refi to conventional afterwards

2. Conventional Bank Financing: Up to 80% of the cost of purchase and rehab. 5% to 6% per year, 20 to 30 year amortization available. 

Sales Rules:

 1) $5000 non refundable to lock contract down

2) No feasibility or option period offered, please do all feasibility prior to contract assignment

Really interested, but not sure if it makes sense to do. Would def prefer to go HML route. With a purchase price of $220K-$230K

Some seasoned advice is definitely warranted.