All Forum Posts by: Account Closed

I have a storage facility that my husband and I likely are going to be purchasing. The owners are my husband's grandparents and they are willing to work with us to make a deal that makes sense for everyone.

This is the first time that I would be purchasing a property from a family member so wondering if there is a more tax efficient way of doing this deal than a straight sale? 

They are also willing to finance the deal and likely for little to no interest. Wondering what the benefits would be to them, if any, on doing a zero interest loan for us.

Sorry for not having a ton of details here, this is the first non residential deal I'm doing so not entirely sure of what questions to ask.

Thanks in advance.

Thanks for your input. 

In the addendum it does state that the deal is now "conventional financing". I agree though there are no specifics as far as terms nor contingencies but a conventional mortgage can't be obtained on this property in its current state. My train of thought was since this is an addendum to the original contract, and the original contract states the terms of a conventional financing deal, it would hold the same contingencies.

Clearly people interpret things differently which is why I started this conversation.

Again, thanks for your input, appreciate it!

 The losing party pays the others legal and associated fees which is the only reason I’m considering and would be my leverage point to have them release the funds. 

 Appreciate the reply. 

I've gone ahead and added the parts of the contract that are relevant as I see that's needed for responses.

I would likely hire an attorney to handle this for me and assuming we have a case, the expense would be the seller's so I wouldn't care. I also go to Michigan regularly for a variety of reasons so that's not a major deal. I realize you aren't arguing with me, simply giving perspective which I appreciate :).

And the addendum

Fair enough - I'm confirming my train of thought is simply in the right place before I consider getting an attorney involved.

There was a no new contract. Simply an addendum to the original stating that the deal is now going to be financed rather than a cash deal. Given that it's an addendum to the original terms (which has a financeable deal contingent on being able to obtain financing), I'm assuming those terms remain.

I should have clarified, the seller wants the EMD released to them which is obviously not happening.

If my train of thought is correct and I go to an attorney to dispute this, I can only seeing this as causing major problems for the seller.

Thanks for the reply.

All,

I believe I know the answer to this but am going to ask anyway. I was in contract for a property with an escrow that ended up being around 3 months (yes, obnoxious I'm aware). I initially offered and had acceptance as a cash offer. I later decided I wanted to finance the deal instead of use cash which was signed off by the sellers.

This property had a foundation issue that I was not aware of the severity of as I didn't see the property in person until I was well into escrow. I'll save the details but bottom line, after getting an engineering report and providing it to my lender, they said they would not be able to fund the deal unless the suggested repairs in the report were made. This seller was not interested in doing the repairs and I was not willing to proceed paying cash and having to deal with a problem that would ultimately cost me 15-20K to fix at some point down the road if I ever wanted to sell.

Now, the seller is refusing to release my EMD. I didn't have any specific contingencies initially but when the seller signed off on the deal becoming financing, according to this purchase agreement (standard Realtor form), if I were to have selected financing initially, the deal would have been contingent on being able to obtain financing. I'm assuming that since the seller signed off on that, the deal in its entirety is now contingent on me being able to obtain financing.

Since the lender won't lend without the repairs done (we went through 2 different lenders), I can't imaging the sellers have any ground to stand on here, do they?

The agreement says that any disagreements will be dealt with in court and the non-prevailing party will be responsible for all legal fees associated here. This would be a major mistake for the seller assuming that my contingency is accurate. The EMD is only $500 and it would be a complete waste of time and money on their end and I know they don't have much of either.

Bottom line, am I accurate in assuming they don't have a leg to stand on here since nobody will lend on the property and they signed off on it being a financing deal?

LOL - no offense but you're off base here. 

This is not even close to my only asset and I mentioned that in my original post. I'm a very experienced investor and my experience with ABC is very much the outlier. Since I've made my post I've had numerous people PM me saying they've had similar experiences.

You're more than welcome to have your opinion about ABC but my experience is appearing to be quite the norm.

If you're ok with them keeping a tenant for 6 months+ that's not paying any rent then by all means, they are a fantastic company for you.

 I did the same. He makes no excuses for ABC but to be honest, I have to now question Maverick since they supposedly vetted and referred ABC. This is the only property that I've purchased through them so no idea on how they perform in other markets but ABC is clearly a joke and this thread further validates that my experience was not and is not unique.

Bottom line, stay away from ABC.

 Yes

Don't get your hopes up... I thought the same thing and unfortunately, nothing got better.

One thing I will say is that, for the most part, they did always pay me and the investment looked better on paper than it did once you dug into what's going on. 

They have insurance so that when the tenant does not pay and is still living in the unit, you get paid. That said, they clearly do not put the best tenants in your properties and are not interested in doing so. You can make your own conclusion as to whether that's ultimately good for your investment.

They are interested in making the returns look good but the foundation of the business is a mess. To be blunt, I don't know how they sleep at night...