All Forum Posts by: Daniel Porter

hey BP community,

so i found this 3/1.5 property in a pretty liquid market in north texas (denton) for $140k and i saw that there were mulitple options to acquire it. lease option, seller financing, or all cash. pretty eager to work with anyone, which already makes me feel a little uneasy (even though i'm going to need something like this to get started haha).

after a brief first contact with the broker, i found out that it would be 10% down. Very intrigued now, i call the owner and ask more. He's got a portfolio of these and he doesn't have the time to talk, so i can't get much out of him (even after offering to call back later).

from what i gathered it seemed i would be using THEIR hard money for the remaining $126k at 10.9-12.9% (tbd after i am screened) and then i'd have to refinance out. it needs repairs too, and he said that it would just be added on to the cost of purchase, seemingly no room for negotiations. he gave me the entry code to the property without any hesitation as well, which seemed like another flag. idk if thats normal or not though, i'm a newb! 

the whole thing kind of feels like a scheme, but if i did refi into a conventional 30yr mortgage on it, it would work great. He wouldn't really sit down and talk through the numbers with me either, but he said i should call back when he's less busy.

i ran into another company in DFW recently that does this as well (networth realty). A broker, who is wholesaling, and partnering with a hardmoney lender that usually costs 14/4, and then offering to sell those properties for the investors he sold them too. sounds like a legal nightmare, and this offer in denton seems to be the same situation. 

has anyone worked with these types of companies before? i have no problem working with a wholesaler, but when everyone except me is on the same team, i get a bit skeptical. haha. i want to act fast, because i know i could househack this and live for free the majority of my months there, but i also want to be 100% sure i can refinance, or ideally avoid getting a hardmoney loan at 10.9%. 

any thoughts would be much appreciated! 

all the best, 

dan 

 

@Chris Faye i'd like to hear more as well 

Thanks Bart! 

could you send me more info (mls link, disclosure, financials) if it's still available? i don't have an agent and am interested in becoming a client. 

[email protected] 

My long term goal is to 1031 exchange a portfolio of residential investment properties (ideally all multiplexes, but probably some 1-2%/mo sfrs) into a larger commercial property, ideally 15+ units, with a much more hands off operation. 

with that in mind, would it be better for me to save up for a larger down payment and never live in my properties, only manage from within 50-75miles (my Dallas proper neighborhood is NOT in my current budget right now) or would it be okay to #HOUSEHACK my first one and then househack a second one in 18-24months, etc. 

anyone go down this path before that can offer some advice? TLDR: find a portfolio buyer for the residential units, and exchange all that capital for a downpayment on a large commercial property. 

any thoughts/comments/critiques are much appreciated. 

dan

@Deanna McCormick i'd like to talk more about your suggestion, because i don't quite understand all of it (still learning!). I'm about to head off to a gig unfortunately though, so would you mind if i messaged you privately to follow up that way? Really appreciate the response, you seem like you're speaking from some past experience. 

@Jeff B. appreciate the straightforward answer, haha! I'm actually in the middle of finding a duplex deal, and don't want to be a motivated buyer, so i'm reupping my lease with the previously expressed permission to find a sublessor when i move into my new house hack situation. 

Well, it seems like he might be motivated to be owning a note instead of own the property, since his alternative to renting is tearing it down. That was the ONLY silver lining i could find in this whole situation, and thats pending me getting financing for the purchase and rehab, which would be a whole separate battle. 

But maybe he really is bluffing about the demolition, and will just rent it out to the next family that agrees to his terms. I can't imagine anyone just demoing a property like this, except for that whole horrible divorce part... ha

i don't think it would be ideal at all, but the litigation might get it done. I definitely wouldn't re up my lease after that, and it will undoubtedly put more tension on the relationship. But under TX state law, there is Implied Warranty of Habitability, and i think flooding could easily fall under the category of material health and safety.  

I'm a newbie REInvestor in Dallas, TX, but today i'm having some issues with my landlord, and i wanted to reach out to the BP community for some advice. I'll try to give as much detail as possible, but if it doesn't make sense, please ask me to clarify something and i'll do it asap. 

heres the situation. 

My three roomates and i are renting an old, SFR on a single lease, not individual room leases. The lease is up in two weeks. Two of the roommates are moving out. weve got one more roomate to find.

the problem:
the fourth room area will occasionally flood with ground water when there is a bad enough storm, about once or twice per year. like, last monday when i was showing the room to an optimistic, potential roommate (who then backed out of the deal, after seeing the water starting to puddle.)
current roommate living there is a CHAMPION and smilingly puts up with it for the massive discount rent he pays while living this close to downtown dallas (<10m). 

the landlord:
Knows about the flooding, we've told him via email (not certified mail, yet) and he did not do anything to solve the issue. there are also other issues in the house (like i said, old) like the gutters falling apart, balcony wood rotting, foundation issues, etc. he simply will not put in any money unless he has too. The one time that occured, was when the flooring was getting moldy, so he got new flooring installed, after about 4 weeks of us nagging, which ended up taking another 2 weeks. we have never have seen him in 2 years. completely hands off. home insurance handles EVERYTHING. his office assistant handles repair inspections/contractors, and then passes the fees onto us, generally speaking, since he doesn't see these expenses as maintenance, and to be fair, some of them aren't (HVAC filter based problems, garbage disposal issues)

why we haven't abandoned ship: 
Now, believe it or not, the two of us want to continue living here. the house, apart from that one back room area, has its perks, and has even become a part of the growing dallas music scene. BUT, with only three roomates, the rent is way more than we can afford to pay. 

Today:
i emailed the landlord, who is also a lawyer (yikes), about not being able to find a roommate for the room that is flooding, and asking him for actionable ideas, saving my recommendations later. yes, i've been playing property manager for him the entire time, getting roommates lined up and advertising locally. His response to my reasonably brief update and request for some contribution: "As far as I am concerned, the tenancy is with you all. Therefore, I cannot get into the issue of how you work this out." 

as a wannabe landlord, i completely respect the hands off approach, but this is taking it to a whole new level! If my property was flooding perennially, I would step in and deal with it, or have never bought the property in the first place! 

which leads to another point, if we ask for anything drastic to be repaired, he will threaten to not renew the lease and level the property. Yes, destroy it. He has not said this to me directly, but allegedly he implied this to a previous roommate when dealing with the same issue two years ago. *found this tidbit out today, btw* 

He previously bought this house with his wife, and then a horrible marriage fiasco ensued. the neighbors still tell stories of their shouting matches in the front yard. 

=================================================================


so theres the gist. sorry for the length, but i figured itd be better to include the details to minimize the questions and maximize the answers. 

i'd like to get to a win-win situation from this, and ideally even swing this into a seller financing deal (seems pretty distressed to me!), buy the house in a neighborhood with over 50% (of sustainable) appreciation at about half of its ARV and do a BRRR or flip. BUT, seems like that might not work, considering his level of animosity towards the property. 

In a Win situation, i'd like to simply get the flooding room fixed, by litigation if necessary, because i think we'd have the winning case, based on my very limited knowledge of landlord-tenant law. 

Does ANYONE have any clues about what to do? Or could you possibly put me in touch with a relatively affordable Real Estate Lawyer that could consult me in this situation? I want to get this taken care of. 

@Peter Schuyler that would be substantially helpful. just sent you a PM/invite. 

@Brandon McLean @Curtis J. what part of east dallas?? are you actually building a new house or gutting the current one?! some of the ones in SOME parts of east dallas can go both ways! haha. I only know because i've been looking....