All Forum Posts by: Ben Reiss

Why did you put the toilet back before you put the floor in?
Are you going to pull it again? ( I figure maybe you needed it for the day) Is the trim a odd profile that won't take a quarter round or shoe?
if not I would just shoe it or quarter round. I believe you could just caulk it without issue to the floor but I think it might look weird and in a bit it would get very dirty looking and the caulk would catch stuff and hold in any moisture.
Not an expert with allure. I just used it for the first time in a kitchen this week.

I did this on a duplex I bought. Went through negotiations came to an agreement on 381K. Once we had that accepted I came back with 390 and $8,800 back. He agreed. So once that was agreed I had a bump in closing costs so I asked him if he would do 400K with $19,100 Back . reason I kept moving up slightly in my net to him was to cover the additional tax he would pay.

Honestly it may sound dumb but it covered my entire out of pocket closing cost on the loan. (yes I know that is ridiculous closing but it made up for a bump to lower the rate, transfer of 2%, and every other thing imaginable.) I came out ahead offering more with more back. He came out ahead cause he had other units in the area and since there was no Realtor involved it made it a simple transfer at 400K. This bumped prices and he made about the same net so didn't care.

If the appraisal would cover it might as well get everything back you can. I admit it is not the most conventional way in the world but it made the deal work and since I will prob keep this place till I die it worked perfect for me.

EDIT: this was a Owner Occupied Conventional loan. Which I moved out of first chance I got and rent out both units now.

I have also collected rent in cash from a few of my college students. They brought it to me and I just gave them a hand written reciept for the amount. nothing fancy.
I prefer a check since it makes it easier for the books. But like others said Cash doesn't bounce and sometimes the colelge kids have issues with setting up checking and bill pay the first month or so.

In my area you cannot say that the security deposit is the tenants responsibility to get back from old owner. By buying the building and taking over leases you have bought it with all liens and encumbrances. One of those is the security deposit.
In my area if that went to court the tenant would be due his deposit from the current(You) owner. He does not have to track down the old landlord and get it from them.

I see you're a UD student(alum) I went there also and now teach down south. Where are the possible rehabs you are working on?
Are you advertising to get your leads for sellers or where are you pulling them from?
How are you liking DELREIA? I went to a few meetings but mostly am looking at buy and hold and had been getting capital together for a while. Now looking to do another rehab to flip for some more capital or hold for cashflow after I refi and get my money back out. There seemed to be a few very knowledgeble people in DELREIA. But I work days and nights a lot so have trouble making it over there.

Mike,
I agree with CYA ideas here. I would make sure to have all the information about the owner and either meet with him or have some comlpete verification that he is who he says he is.
Has the title actually changed hands yet?
Do you have some hard verification that he is owner?
Can you produce that proof that he is owner and is asking you to go into property if the cops arrive?

Where are you really talking about? 3rd st in Wilmington? while it is a rough area if you go in during the day and check things out it would probably be fine. Might want to bring someone with you if you are worried (and it would make things more on the up and up to have a witness anyway). However I have looked at a few properties in the area and my Mom (5'2" middle aged woman) did home nursing care in the area taught at the skills center on Clifford Brown.

Have you talked to anyone at DELREIA who farms the area? you may be able to get with someone who works that area. What do you work on normally? I am also in the delaware area and am currently investing out of state but looking for a rehab in delaware also.
Live in Newark and owned a place on Chambers st on campus until I sold it to buy a place in Philly

John,
Thanks for the great ideas. I will talk to him and see what his feelings are. this is a great way to make sure the bank is happy and to keep things easy to manage. just have to work out contracts on how to work the LLC. I wish I was able to do this with family but not able. I think with things drawn up well and everything worked out as to role and exit strategy things could go smoothly. There is a lot of opportunity in the area right now that I would like to move into and this would let me do it. I think he would be happy with a buy out on his investment at 5 years and we could always work up how to structure things if he decided to stay in.
If anyone has any ideas on how this could be structured from a exit strategy perspective I would really appreciate it.

Thanks again. I am really learning allot from this site.
Ben

I have one new construction duplex rented out to students which is nicely profitable. I am looking at another one that will be slightly larger and slightly nicer. resulting in a bit higher rent. I don't have enough money for the down payment right now. I should be there in about another 18-24 months.

I have a friend who is interested in earning more on his money than the miniscule returns from the bank. He cannot get a bank loan since he has no real income. Does have a very nice nest egg from a divorce where he was a stay at home dad. How could I structure things so they were fair to him and also allowed us to move forward. I think the bank might question where I got the 100K.

He does not want to be involved. He just wants to lend the money and get his return (while covering his ***). Could we set it up as a partnership with specific buyout time frame. Say set it up so we partner together and he is given a buyout from this cashflow and other units I have.

I could theoretically give him an easy 2.5K a month till paid off, without touching any cashflow from the new unit. Figure borrowing for 3 years amortization on 10% gives a payment of $3,227. If I made it an easier cushion I could make it 5 years which he is ok with for a payment of $2,125. Assume I am not crazy in assuming this debt and is there a way to structure this.
I have good credit and a great DTI once the rental is counted. I also have 2 jobs and make very good cash bar tending in the summers.
Other option was to give him a second on my current duplex. Owe $310K worth about $425K (no room to pull cash.) and on the new one. Do 15 year amort with a 5 year or 7 year balloon.
I am looking for any ideas on how to structure the deal so it's fair to both parties. both parties are covered and everything is spelled out.

Thanks Ben

Vince,
You have some good points, I think I may have been over thinking the rehab. I might have been doing too much, actually I know I was making this place into something I would live in as apposed to what the market would take/want.
I will look more at making the place "nice" instead of NICE!!! I forget that a 100K house doesn't need to be amazing. having new everything and a dishwasher and all tile will make the place enticing.
Thanks for the ideas. I could prob cut down my rehab by a decent chunk thinking that way. drop the fence and just do landscaping and a few other things would put me closer to 18-20K instead of 25-30K I will have to get a solid idea on whats needed first though.
I am going to walk a few comps after I take another look at this place. get an idea of the standard of build out in them.
Thanks for the insight and keep any ideas or issues coming. I am still working on figuring out the market build.

Thanks,
Ben

electric has mostly been updated, new panel and service cable. some old circuits and a small bit of knob and tube. looks to be maybe 2 circuits. and they are in the basement so honestly not sure why they weren't pulled out other than the guy didn't want to spend extra money.
Plumbing has been updated to the main line leaving the house as all PVC. only the main sewer line is still black iron.

House is about 1400 sq ft
downstair living area already has new carpet as do the stairs. up stairs needs to be done in the bedrooms. tile in the kitchen and baths. does have washer dryer hooked up in the basement too but needs the stairs re worked. they covered up the back stairs up to floor from kitchen. I would turn those into a better set of stair to the basement since I would have room for a landing and a slightly longer run so not as steep. (that was set in along with getting rid of stairs to attic, and making a closet with pop top access at about 3K)

Going to get another realtor's ideas on ARV and get something solid. Going to get a GC in to give me some firm numbers on the work also. was going to sub a lot of it but think it might be worth the GC to make sure it gets done on schedule and have a solid budget.

I honestly just need to make sure not to over do the rehab. I could see myself putting too much money in since it is a cheap area. need to make sure not to over do it. I could do a "ok" rehab for cheaper that might still get me the same price.

I am going over tomorrow with a friend who does more work on building new construction in temple area that I dealt with on another project for my long term hold on campus.
Hope that answered the question, any more ideas or comments please post away. I am trying to punch holes in this so I make sure not to make a mistake. figrue if I can't it's prob a good deal.