All Forum Posts by: Dina Schmid

Is she under Medicare, or Medicaid? The rules for each are different, and the allowable assets under Medicaid can vary by state. If she's currently on Medicare but is trying to qualify for Medicaid, in some states the home can be kept if there's an intention to return (thus the allowable "caretaker"), but it will be subject to asset recovery upon their death, making it hard for the family to keep the home. 

(Note, I'm not a tax professional or attorney, but have done a lot of research into this area as it is relevant to my personal situation with family members. You can read this article to see more about asset recovery after death: https://apnews.com/article/medicaid-estate-recovery-nursing-...)

I know there are companies that do this. One (that I only know through IG but follow due to the great tips she gives) is LaunchedHost. A search might help you find others.

Before our contract fell through, we were going to go with a business policy from State Farm. It provided loss of use coverage and high liability limits but at less than 50% the cost of the quote I got from Proper. We do receive a loyalty discount due to having homeowners & car insurance through them already. We also had the option of another type of policy that was even less expensive that would have required us to spend at least 1 night in the house and rent it at least 30 nights each year. That did not provide the same coverages that the business policy did, but it was very affordable.

Release is signed and we're getting our earnest money back.

Sellers offered a laughable $1500 in concessions - specifically towards the bathroom subfloor issue. Our realtor said she was shocked and so was I. Sellers aren't willing to do anything towards the deck or foundation. They got someone to say that the foundation doesn't need to be repaired right away; that they could just keep an eye on things for a while. (Easy to say when you won't be living in it for long!)

I appreciate what everyone who chimed in has had to say. We are definitely prepared to walk unless the sellers meet a number I have in my head, which would make it worth my while to move forward. There's nothing else on the market right now that I'm interested in, so no reason not to see this one out and see what the sellers come back to us with.

Quote from @Dan H.:

There is no way I take your RE agent advice and accept a reduction equal to estimate or even close to it.  I would not even accept reduction equal to estimate and lost rent.  

We only do a value add if the expected value add is at least 2 times the cost of the value add.   This is our minimum and here is the thinking 1) it is work doing value adds.   Even with the use of contractors, it is work managing the contractors and making various decisions.  2) value adds have risks.  I was overconfident after successfully doing numerous value add rehabs when this spring we took on a rehab of a little unit that was listed as built in 1901 (I believe it was really built in 1920s and 1901 was used because they did not know when it was built).  I had no experience with that age.  In addition little added complexities.  Age meant we did things we had not done previously.   We went way over our expected budget - by far our worse budget miss ever (remarkably we were only 0.5 week over our 2 month timeline).

Using my rule, take the estimates and double them then add for lost occupancy and that is what I would be seeking or the owner have the work done using licensed contractors and do the work, take the risks, and suffer the vacancy costs.

If you purchase having to do the work and your appraisal can handle it, the credit at closing is superior to price discount.  It would mean the costs are financed with the property and it raises your basis cost against future cap gains.  

good luck

Thanks Dan. The number in my head was 1.5x the estimates, and I can see where you're saying 2x makes sense.

We are of the same thinking on taking the cash at closing vs price reduction. I know the realtors would prefer that because it increases their commission so I'm sure they'll push for it if that's what we want.

Quote from @Michael Baum:

EDIT - Where are you looking? I am curious about the area you are investing in.

We're looking at the Red River Gorge area. I really want something that doesn't require 4WD or AWD which limits options. I also call it the Wild, Wild West of homebuilding since it's the closest thing to lawless homebuilding out there. We've seen some crazy stuff.

Quote from @Michael Baum:

The simple fact that the foundation was incorrectly done, that leads me to suspect that there are many multitudes of issues within. Electrical, plumbing, the list could go on and on. I would be worried that the whole house was done shoddily and will continue to cause you issues as time goes on.

There were other things noted in the inspection report along these lines and what else is there that we don't know about is a good question to be asking.

Putting the emotional aside is hard. We've been looking for over 6 months and this would be the second time we've walked because of foundation issues. (First time was pre-offer inspection that drove us away - on a new build.) I'm ready for this to be over.  

If you're looking for original art, you could consider contacting the AP art teacher at a local high school and asking them to coordinate commissioning a student to make something for you or purchasing from a student. There are some really talented students out there who would love to make some money off their art. I know this because my oldest was contacted via her art teacher one year to paint a portrait of recently deceased pet for someone and jumped at the chance.

Quote from @Mike Grudzien:

Unless this is the deal of the century, after reading through the issues, my first thought is: run, don't walk!
Why buy a box full of (serious) problems?
Deal of the century with 3.0% interest rate?
My 2 cents,
Mike

It's a poorly decorated, poorly photographed and underperforming STR in a location I love. It's also in an area with no building codes or inspectors and we have yet to find anything in the area without visible problems. These just happened to go beyond what we were able to visually see.

I'm honestly torn on this one and unless we can get a major financial concession, we are prepared to walk. I have a price point in my head (about 20% off list) at which I do think it would be a really good deal. I can't say I'm confident we'll get there though. We're not afraid to put in a little sweat equity either and are experienced DIYers so I'm confident that we could greatly increase the value.