All Forum Posts by: Greg Hansen

@Cassie Montalvo Thanks for pointing that out!  That box is checked, so technically the seller is in breach of contract...the LA said "oops" when my agent brought that up with her.  Kind of an important detail...  Anyway, my agent and I are absolutely certain that if we try to enforce that part of the contract at this point, the sellers will sit on the property indefinitely (months upon months) given that they don't really want to sell anymore and are regretting it.  They'll try to wait us out to get us to move on.  It's a strange situation, and I've never seen people be so SLOW MOVING in a business deal ever (LA included), but I guess if they're not eager to sell anymore, it makes sense.

@Russ B. Sellers are an old retired couple without computer, internet, smart phones, etc. and live in the boonies far away.  They COULD start the eviction process now, but they just won't.  They told us so.

@Aaron DiCaprio Thanks!  Didn't know rent insurance was a thing.  I will definitely look into that after the rehab when I'm getting close to placing a tenant.

@Andrew B. @Michael Noto @Ned J. @Caroline C. -- Vacancy was not part of the original contract, as the seller told us that the tenant was planning to move out by 31 August prior to closing.  In hindsight, I should've made them tell me that in writing...  I considered writing an addendum to the contract, but it's become clear that the seller may regret selling and want to take it off the market, so I'm concerned that trying to make vacancy a contingency to closing could backfire...they might call my bluff and try to back out.  Don't want that, as I think this is a pretty good deal, as well as a good primary residence for me.  

@Brad Conver I've gone back and forth about whether I should try to keep this tenant and get her under a lease, but at the end of the day, this tenant and the 8+ people she has living in the unit are not the type I would want living in one of my properties.  She also barely affords the rent she's paying right now, so I don't think she'd be able to afford the post-rehab increased rent.  Probably going to evict her, as much of a pain as it is.  I guess everyone probably has to deal with eviction at some point as an investor...should be an interesting learning experience for me as a noobie!

Here's a question -- Based on some research, my understanding is that a landlord cannot legally turn off utilities on a tenant.  However, given that the tenant's utilities are currently in the seller's name, am I obligated to transfer them to my name to keep the power on in her unit after closing day?  My thinking is that technically I'm not turning off utilities if I never turned them on or established them in my name (talking about electricity here; units have separate electric meters but shared water).  That seems like it could be useful leverage to get the tenant to move out if they know the power's getting turned off on a certain date.  This might be more of a question for an attorney, but if anyone has any insight, I'm all ears.  @Mark Fries

I'm preparing to close on my first property next week in Jacksonville, FL.  Everything has been going well so far, and the plan was to immediately start renovating both units.  However, we just learned that a tenant in one of the units (it's a duplex) is now refusing to move out until it's a "done deal," i.e. closing day.  She was supposed to be gone by 31 August.  Given that I'm likely to inherit this tenant now and the difficulty we've had working with her so far, I won't be surprised if she continues to resist past closing day and I am forced to evict her.  

A couple factors to consider:

- Again, this is my first property.  Planning to renovate both units and house-hack.  

- Using a VA renovation loan, so the renovation clock starts ticking at closing. Renovations could theoretically be completed with tenant in place, but it would be extremely inconvenient and difficult given her tendency to not let anyone into the unit (prospective buyers, agents, etc).

- Tenant has been there for 5 years, had at least 8-10x family members living there (3bd/2bth), and the landlord/seller NEVER has never had her sign a lease (!!!).  She originally said she'd leave at the end of August but didn't and hasn't paid rent for September.

Any thoughts/tips/advice for dealing with a situation like this?  Didn't think I'd have to deal with this right off the bat.  Tenant might just up and leave at the end of September, but I want to prepare for the worst.  Starting to dig into the county's eviction process just to in case it gets to that point.

@Allen C Herring Yes, still 100% financed with the purchase price and rehab lumped together. I recommend trying Loan Depot since it seems like they’re one of the few lenders out there who can/will offer it and don’t put a hard cap on the rehab cost (as long as what you’re trying to do rehab-wise is reasonable obviously).

@Ryan Robbins and everyone, @Benjamin Bennett puts together a monthly event for Jacksonville area investors. The next one is 11 July at Wicked Barley at 6pm. He created an event on BP — if you look under events, you should be able to see it and all the details.

@Alan C Herring I'm also in the military, and it turns out there is such thing as a VA Renovation Loan. The trick is finding a lender who'll do it. I found a local lender (I'm in Jacksonville, FL) who works for Loan Depot who does them. It's a higher interest rate of course, but it might be worth exploring depending on the amount of work the property needs.

@Jack Bobeck @Kevin T. Sorry for the silence on my end...was in an accident after I posted, which has taken priority over a lot of things. For this property (which is still on the market, and the seller will not budge on their ridiculous price) and others like it, I think I would need to finance via hard money rather than conventional/VA loans.

I'm looking at a few properties in the Riverside/Avondale/Murray Hill area right now. I'm renting at the moment and eager to buy a property that will be my primary residence for the next year or two (I'm in the Navy at NAS...probably going to move at some point). Ideally, I'd like to get either a duplex or a property with two SF homes or a garage/studio or something like that. However, I'm also seriously considering a SF that's in a great area that's stripped to the studs and being sold as-is, so I'd need to finance it via hard money rather than a conventional or VA loan. My plan would be to buy, rehab, refinance, but then live in it as my primary residence until the Navy makes me move, and then rent (or sell depending on the market). So somewhat of a dragged out flip or BRRR. Any thoughts or red flags on that?

Do you have any experience or recommendations for HM lenders in Jax? Seems like they're a dime a dozen, so I'd rather be referred to one than pick one randomly myself.

Thanks!

Greg

I’m looking into a 1917 duplex in a very attractive part of Jacksonville, FL. The property is around the corner from a strip of several go-to restaurants and bars for the young professional sort of crowd.

The place is a mess and needs major, major work — bugs cracks in the walls, significant water damage in the kitchen floor that has led to dry-rot in floor joists, etc. It seems like it needs a full gut, which will invoke the need to comply with current electrical/plumbing code, which is obviously extremely expensive to update.

Any thoughts on how to proceed with properties like this? It’s hard to estimate rehab costs because I have a feeling as soon as the walls start coming down, there could be some serious (financial) demons trapped in there.