All Forum Posts by: Martin M.

@Teekap Pate

HOA fees are generally high in high rises in those areas. They vary in range but just to give you a reference.... $1,000 a month is on the lighter side and upwards of $2,000 isn't unheard of.

On the upside the fees often include utilities, internet, water, heat etc.

Also on the upside, property taxes generally not too bad. With many buildings the larger the unit and the higher the floor the higher the taxes.

HOAs can limit your ability to rent the unit too so you'd need to scrutinize the HOA bylaws to see if rentals are allowed or if there are any restrictions on rentals such as owners can only lease their unit for a max of 1 year etc.. Keep in mind too that even if rentals are allowed today.... the HOA can change that in the future. At which point you could sell.

As far as resale.... high rise condos appeal to a very limited market of buyers. Probably the smallest buyer pool compared to other property types. The view from the condo, e.g. the higher the floor, you can see the lake from it etc is valued much more to renters and owners than a 2nd or 3rd floor unit.

The zip codes you've picked are nice. I wouldn't count on skyrocketing appreciation in a high rise but if the numbers work or you could see yourself living there at any stage in the future maybe not a bad investment.

Good luck!

Quote from @Adrian Jones:

Good day Bigger Pockets Fam,

Has anyone here ever done a For Sale By Owner transaction, and if so, I wanted to hear about your experience and how easy/complicated it was to close that deal without using an agent. Appreciate any lessons learned you may have.

I'm a real estate investor in Wash DC and in Charlotte, NC. I am selling my 4BR/2Bath SFH investment property in Charlotte. Zillow says it may go for $289k +/-My current tenants are using it for business and pay $2,250 a month. I say all that to say, I think it may be an easy sell to an investor. I would obviously like to save on commission, if possible, by going the FSBO route. But also, don't want to screw up the transaction as I've never done a FSBO before. So just looking for some insight.

Thanks,

Adrian Jones 

The comp is going to be key. You don't want to overprice it and have it sit too long where it's stale in prospective buyers' eyes, but you don't want to give it away either. You also want it out on the internet getting exposure in as many websites as possible - which basically means getting it into the MLS. All the big sites pull from MLS, realtor.com etc

Have you had a free conversation with Redfin? Their seller side commissions are half of what's usually standard in an area (1 - 1.5% vs. the traditional 3%)

I know you're asking about FSBO but maybe Redfin could be a good middle ground for you. You achieve your objective of saving on realtor commission while still getting it onto the MLS. Again - main thing though is starting with an accurate comp. If you do go that route get the agent to justify the comp with data. Hope that helps

Martin

@Jon L.

Your questions 1 and 4 in the survey are not something a lot of investors would want to provide... breach of privacy etc

For your question in the post here about the most frustrating part, for me plenty of frustration around contractors... finding quality ones, finding ones that haven't taken on too much work to where they bring in inexperienced guys to cover their multiple jobs etc

@Marcus Amison

Speak with an asset protection attorney about what you're looking to do. You may not need an LLC at all if just starting out and insurance might get you all the coverage you need.

That said... it's common for properties to be held in an LLC that's in the same state as the property itself.

Regarding OH specifically, some good info on the OH secretary of state website:

https://www.ohiosos.gov/businesses/information-on-starting-and-maintaining-a-business/starting-a-business/

Scroll down to...

Guide to Starting a Limited Liability Company in Ohio

@Brooke Singler

If you search the forums for HOA and rentals you'll learn a lot. Here's what you'll want to consider....

Look at the existing bylaws. Are there restrictions on rentals? Some examples of restrictions might include: only a small number of units can actively be rented at any one time or... owner of the unit needs to have lived in the unit for two years after purchase before they can rent it out etc. No unit can be rented more than 2 consecutive years and so on.

Another piece to consider is even if the bylaws today allow rentals... this can be changed at any point in the future. Amendments such as that typically need a certain percentage of the association to vote in favor of the amendment for it to succeed, but it does happen.

The townhome may work as a rental. Just know that the association at some point in the future could prevent it at which point you'd sell.

Also one last point... SFHs always appreciate over time at a greater rate than townhomes in the same area.

@Edward Barrett

If you sell multiple anything in a given year, cars, properties, boats etc the IRS views that as 'dealing' inventory.

They may assign the activity 'dealer' status and tax it at a higher rate.

That's likely why the CPA on this thread, Sean has listed 'S-Corp' as a popular option amongst flippers. In the event that the activity is determined to be dealing inventory by the IRS, the total taxes on the profit are high... I think upwards of 40% depending on variables that a CPA can walk you through.

If you were doing passive investing and just starting out, in most cases an LLC likely isn't needed. Good insurance gets you what you need.

But for what you're talking about.... there is some risk with flips and an LLC isn't a bad idea.. more importantly... if you're flipping a lot there are tax implications with that. This is where an LLC that's taxed as an S-Corp makes sense.

But.... don't get carried away. If you only end up flipping one property in your first year just use a standard LLC. Make sure to get insurance too.

For the registered agent don't use yourself. Pay a service. They're cheap.

Hope this helps. Good luck!

@Adam Rivera

Google confirmation hearing foreclosure cook county. I'm assuming it's Cook but either way process is similar in Chicagoland.

At the confirmation hearing a date is set for the previous homeowner to move out. If they don't... sheriff evicts. It's part of the process. It's not like your typical eviction

@Adam Rivera

I see your profile says Chicago. Is the property there also? If so, at the confirmation hearing there should've been a date set for when the previous homeowner should move out by

@Conrad Legé

2 miles is too far. Ideally you'd want within a few blocks, maybe no more than half a mile for the comp to be accurate

@Conrad Legé

You're on the right track focusing on sold for your comp.... but I hear ya... sometimes there just aren't that many sold comps nearby to make an accurate comp.

If you do use contingents because they're all that's available, one thing to look at with them is list to contingent time. If that's fairly short like 3 to 5 days, the seller's likely accepted an offer near asking price or higher.

Opposite applies if the place was listed 6 months before going contingent and then went contingent and so on.. but sold comps are way much better if they're available. Good luck with it