All Forum Posts by: Brice Hall

Fair enough! Thanks for feedback!

@Greg M.since you recall numerous accounts of seeing such news, would you mind sharing just a couple? I would disagree, and hence my wish to warn others. 

In Bob’s case it came directly from the lender to whom he was requesting forbearance.

Given your credit score is the sign of your credit worthiness, one would have assumed that if the communication was “it will not impact your credit score”, it in essence wouldn’t affect your credit. 

This conversation wasn’t meant to be about having adequate reserves. In Bobs case, it doesn’t matter if he has $10mm cash sitting in the bank. He is still prohibited from refinancing a $70k property. 

There were many employers who imposed what ended up being very short term pay cuts defensively, and/or out of precaution. This left employees very uncertain, even if for a short period. 

@Nathan Gesner, I certainly agree you should prove you're good for it, hence the income requirements, continuation of job, etc. My opinion is more of, if those are intact, and all other requirements are meant, i'm not so sure a payoff, or 3 month waiting period, is entirely reasonable. Communication was that forbearance during the pandemic would have NO impact on the borrower. However, inability to refi without paying all deferred amounts, or exiting forbearance and waiting 3 months (which i believe fannie/freddie may have put into place later in the game, and not upfront) could have/had fairly substantial impacts on a borrower given how fast rates have changed. Moreover, while someone who may have had a rental property financed could have benefited by forbearance, he who had no mortgage on a rental property unfortunately did not have such benefit. 

In case you didn't know, you cannot refinance a property that is currently under forbearance. That's understandable, but what isn't IMO is that it also prohibits you from refinancing any other properties that you may own. Take the following scenario...

Bob owns his primary residence in his personal name, which is worth $2,000,000, and he owes $1,000,000.

Bob also owns a rental property outright, in his personal name, which is worth $100,000.

Let's say Bob decides to put his primary into forbearance due to any potential financial strain cause by covid. Fortunately, things don't get much worse, and Bob keeps his job, that pays $200k+/yr. Well, let's say Bob wants to refinance his rental property during the same period. To Bob's surprise, he gets to the 9th inning on refinancing and is expecting to close any day, and then all of a sudden the underwriter tells Bob he can't refi unless he exits forbearance -- which requires him to pay off the total amount that he's deferred, and exit forbearance, or exit forbearance and make 3 consecutive payments.... Jeez, if seems like freddie/fannie are holding Bob hostage, and he may be forced to sell the rental property if he needs cash, when all he wanted to do was refi?! Any ideas for Bob?

Hoping a CPA or another person can provide some insight and definitive answers when it comes to land contracts, and tax consequences when selling real estate on land contract. 

Also, if an asset is held for under a year prior to selling on land contract, will this have different consequences than if the asset is held over a year?

Are there ways in which to structure land contracts to further benefit the seller, when it comes to taxes. e.g. an "installment land contract", a "lease with a purchase options", etc.

Lastly, is it possible, and if so, how would one take advantage of a 1031 exchange if selling an asset through a land contract?

Much appreciated in advance to those who share information and resources, particularly beyond "talk to your CPA". I certainly will do this, but hoping to gather general information that may be enough to decide going with a land contract vs. traditional sale.

Thanks!

@Aaron K. @Dennis M. Many thanks for the reply!

So if current floors are painted, you would suggest removing the paint, sanding, and staining? Just curious, what has been your best solution for removing old paint from floors quickly? Have you had any luck with a certain type of sander, for speeding up the sanding process? What is your preferred stain color/type ?

Any good vinyl/laminate brand/color/type you've had experience with that has been best bang for buck? (good price+long lasting)

Thanks again guys!

Hoping to start another conversation about how everyone approaches low income rental properties, when it comes to material selection, and what you put where :)

 From you experience, what has been the most cost effective approach?

1) Wood floor paint: what color and type seems to last the longest, and hold up against traffic?

2) Wood floors, to paint or to sand and poly?! Sanding and poly takes time, and money, but may be a better longer term approach. What has been your experience?! For wood floors you paint over, do you opt for oil or water based paint? Is there a brand/color you've had success with? Do you poly over / on top of the paint?

3) Carpet VS. vinyl/laminate or other options (assuming wood floors are not already in place): Carpet is cheap, and quick to lay. But often times needs either deep cleaned or removed short term. Do you still stick with carpet? If so, have you found a particular type to hold up better and last longer? If you opt for vinyl/laminate or another material, what is your go to?!

4) Walls: Have you experimented using different material to cover walls, rather than just having to repaint nearly each turnover?! If painting is still the best, most cost effective solution, is there a particular paint you opt for?!

Thank you all for your contributions!

Thanks @Jeff Kehl. To clarify, we have, and are getting high level attorneys and brokers involved, who will most certainly provide guidance. My goal here was to create dialogue for the purpose of additional supporting discussion/ideas.