All Forum Posts by: Bonnie Low

Have you been to the property yourself and paid for a third party inspection? Getting your own eyes on it and that of someone qualified that you trust is the best way to know what you're working with. The BP calculators are great for making sure you aren't missing any line items. It should be easy to verify market rents and actual rents. Don't settle for the seller stated rents. Ask to see the rent rolls to verify. Asking to see maintenance records will also help you verify if there's deferred maintenance that the seller is trying to get out of. Finally, the seller might just be tired of being a landlord, looking to get out from under the property and whatever debt they owe on it or maybe they're spooked by the eviction moratorium and their tenants have stopped paying rent. It could just also be a good deal. I hope that's the case!

I think I'd start by talking to the County building department or assessor's office to see where the property line actually is. Is the garage actually on her property or is the property boundary drawn incorrectly and is actually on his? It's not uncommon for fences and other property lines to be out of alignment with the official record. This happened to our own property so when we rebuilt our fences, we had it surveyed and put up the new fence in the right spot to avoid any property line disputes later down the road when we sell. I'd also want to know if either she has the right to sell you the property if he "owns" a building on it or, more likely, if he has any legal claim to the structure if it really is built on her property. It sounds like more of a handshake agreement and that could really trip you up later if you try to sell it or even refinance it. It doesn't mean the deal can't be done, but if it was me I'd want to take the additional steps to make sure it an properly convey to me. 

It would be more than worth it to consult a real estate attorney in New York to find out if and how to do this legally. This situation raises a few red flags and I would want an attorney to make sure it's all on the up and up before putting any money forward or entering into a contract. It would be money well spent. 

Welcome, Kyle, and congratulations for getting started so early in real estate! Don't let your age deter you. There are plenty of young investors who are absolutely killing it. Have you thought about starting out with a house hack? Apartments are pretty ambitious and house hacking would give you the dual advantage of getting your feet wet and taking care of your own housing needs. As a first time home buyer you will be able to qualify for very low down payment so the barrier to entry isn't much and having others help pay your mortgage has some pretty distinct advantages, too. If you're willing to roll up your sleeves, you can start with a property that needs some work, add some value to it then BRRRR in a year or two when you're ready to move up. This is one of the fastest ways to get started. Good luck to you!

Ours is a pretty hot market, too. The houses I see sitting on the market a relatively long time are either a) over priced and the seller won't or can't come down on the price or b) they're just weird houses. In scenario a, you have to just hope that over time they'll come to their senses and lower the price to where it should be. In which case it helps to prepare yourself to be first in line. You can do that by submitting an offer now where you think it should be. If they eventually decide to lower their price they might reach out to you. In scenario b, weird houses are difficult and costly to work with. "Weird" can and does encompass SO many things. I've seen houses with strange rooms and funky spaces that people just don't know what to do with. Case in point: what appeared to be a normal 2-story house from the outside but we got inside and realized that the tiny, cramped central section of the house was a single wide trailer (yep, still had the axle underneath it) and they had expanded (with no rhyme or reason) on every side of the single wide - include building a second story on top of it! Or a house with an entire second story (2 bedrooms and a bath) with a ceiling height of 5'10". Stuff like that is costly to fix and sometimes the ARV just doesn't justify it. And then there are things like foundation issues that scare people off. They can be dealt with but most buyers don't want to take the risk. I keep saying I'm going to publish a coffee table book someday with pictures of all the weird things we've seen in houses.

Hey, @John Coppock - welcome! Most people will tell you that if you have a true deal - one that pencils, you will always find the money. That said, there's nothing wrong with simultaneously putting together a buyer's list while looking for a deal but in order to move from the theoretical (i.e. I have $250k to put into a multifamily deal) to the real (that deal looks good, let's draw up a contract for the $250k I'm willing to invest) you will actually need the real deal. 

Wow - I'm really glad you did your due diligence and this worked out for you. It's a great reminder that people ARE out there who will try to scam you. We've invested out of state and have almost (!) always physically viewed a property before closing. We've had enough close calls now to insist on a personal walk through during our due diligence period because people do some CRAZY stuff to their homes. Case in point: great 3/2 in Boise Idaho, which is a very hot market. They had their biggest snowfall on record the week we visited for inspection. The access to the crawl space was buried under about 3ft of iced over snow, but we dug it out and boy were we glad we did! Someone, at some point, had hand excavated all the soil out from underneath the house to a depth of about 5'. It was standing on "pillars" that looked like termite mounds with a few bricks and 2x4's randomly placed for good measure. There was only one way in and one way out so they must have used a pick axe, shovel and bucket to do it (why? we'll never know). Our Realtor hadn't spotted it when we did a face time walk through with her. And the house inspector didn't mention it on the inspection so we can only assume he didn't go down there. We didn't know what the heck to do with it so we just walked away from it. In retrospect we might have had a foundation expert take a look and give us a repair estimate, but it was our first deal and that probably would have been overly ambitious. So crisis averted, but we learned a valuable lesson. For the price of a plane ticket or a tank full of gas, it is always always always worth it - in my opinion - to get  your own eyes on a property before you close!

@Mitch Jacobs welcome! Good for you for getting started early in life. That's the one piece of advice I think all investors agree on: you can't get started too soon. Here are some thoughts based on your scenario. Start talking to a lender right now. I highly recommend @Jason Wray from the Federal Savings Bank, you'll find him here on BP or @Joe DeVera, also here on BP. I have worked with both of them and Joe knows the tri-cities area several people have mentioned. Since you're willing to put in some sweat equity, you might consider a 203k loan. Not a lot of people use it, but it will pay for your purchase of a distressed property (which most conventional loans will not) and will also fund your rehab costs. Changing jobs might affect your credit worthiness, but that's a question for a lender so just another reason to start talking to a lender so you know your options. I think most of us make the mistake that we have to know exactly what we're looking for when it comes to financing. But asking banks and lenders what they offer or what they can do is a great strategy because we can't possibly know all the products that are out there and, unfortunately with a lot of lenders, if we don't ask exactly the right question we won't get exactly the right answer. This is challenging for newbies because we want to sound informed, but getting too specific might inadvertently narrow our choices. A good lender will hear you out and try to find something to fit you. But just like Realtors, they're not all great. So work with someone who will really work for you!

How has this situation changed for you, if at all, now that the Trump administration and CDC have further extended the eviction moratorium through the end of the year? In other words, has it shifted from a state action to a federal action and therefore you'd have to fight it at that level?

Where we live contractors are very, very booked up. If you don't already have relationships, start making phone calls and lining them up now. If you're in contract and the property you are buying is vacant, you might be able to get the selling agent to let you in to the property to get your contractors to look at it to provide you a quote and get you on their schedule.