All Forum Posts by: Hannah Krebs

@John Semanchuk Oh my gosh, I didn't mean to tag you in that last forum post. For being a millennial, you'd think I'd know how to use technology a little better!! :)

@Travelle Mason

Interesting question! Basically, what they are trying to do with a 1031 exchange is purchase another property with the proceeds from the sale and avoid paying all tax on the sale. They are in a time crunch with a 1031 exchange: they have a limited amount of time to name the properties they are interested in and then another limited amount of time to close (6 months if memory serves). Based on the information, being flexible with the close may benefit you. They may have a property in mind they would like to buy and would like to close quickly so as not to miss out on that property. They may not even have a single lead, so they may desire to have a longer close in order to buy time.

Depending on the type of property (SFH, Multi, etc), they may be looking to owner occupy the next property. If so, they may not have a place lined to live once their house sells. In that case offering them a short-term lease and allowing them to rent the place until they complete their 1031 may work out.

Best of luck to you!

I would say pay whatever you feel comfortable. It's not worth overpaying and setting yourself up for failure, but if you have to pay a little more and it still makes sense, offer  a little more. Maybe put in an escalation clause up to whatever you are comfortable paying? Being a cash buyer probably gives you a bit of an edge already. 

Do a little research on the sellers and find out what motivates them: quick close, cash, etc. When we bought our first house, we actually offered lower than other offers. The house was an estate and the elderly inheritor did not want to move the personal property out of the house. I had my realtor write in a clause that they could leave whatever they wanted to in the house. They accepted our offer for only that reason, though it was 5% lower than existing offers (according to the sellers at close).

Personally I would help them out if they are unable to get it out themselves, it's a pretty small task overall. If you don't feel comfortable, I would call a pest control specialist.

Great question! I can answer this from my experience. My mother passed away this year and left a first and second mortgage on the home. I was a joint owner not attached to the mortgage. She had cancer and was receiving county help with her bills, and the goal was to keep the county from putting a lien on it (her idea, not mine). She then willed the house to my sister who lived with her in the home. When she passed, I took custody of the home and my sister is unable to afford/own the home, leaving me with the payment. The bank will not cooperate with me to refinance, the home is in a less than stellar place so rent is not a great option, and my mom owed more than it is worth. To save family ties we are best giving it back to the bank.

Like Chris said, it could really benefit you to work on your credit! My brother in law had poor credit and was able to find a great loan officer who coached him on how to fix it. It took 6 months but he was able to qualify for an FHA loan and purchase a home. Setting up a strong foundation before jumping into real estate can set you up for success, even though its tough to wait. Best of luck to you!

@Nicole Pearson Welcome to BIggerPockets! There is no better place to find information on everything real estate related, as well as meet people who are already successful in your market. Best of luck to you!

Originally posted by @Keith Linne:

@Hannah Krebs - Looks great! Lots of work, but I’m sure it will be worth it once you sell!

I live in the cities now, but grew up in Duluth and I'm actually building a portfolio of SFH rentals there. Would you mind messaging me with the address, beds, baths, etc?

 I absolutely will! 

The 1970's were a heck of a decade, judging by the state of this house when we bought it. Wood paneling, green shag carpet, floral wallpaper, and yellowed curtains dominated the natural beauty of our 1912 beast. We have redone the whole house, costing roughly $5,000 and a ton of long days. We bought this house as an estate for $95k (though we knocked some off in inspection as well). Most of the money went to replacing appliances as the old ones went out on us. The second biggest cost was removing a load bearing wall in the kitchen and adding in a beam. We are fortunate that our city has guidelines for this, and we were able to just buy the permit and do the work ourselves.

We list this house in 2 weeks for 129.9k. It'd make a great rental (rent would be $1,350 according to the property manager we met with), but we moved from Duluth to Minneapolis-Saint Paul and aren't comfortable having our first rental out of driving range. The original pictures are from the ad for the house when we bought it. The realtor must have just figured out Snapchat filters judging by the quality. Let me know what you think! I'm a mechanic, not an interior designer..but I think it turned out all right!

Excellent question!

We bought our first house last year on a 3% down conventional loan. The property had been on the market for a while without much activity, so we made an offer at $5,000 (so 95k) below asking with paying taking 3% closing costs. We ended up knocking a bit off in inspection as well. The house was an estate and the family just wanted it gone. Knowing it was an estate, we wrote in that they could leave whatever personal property in the house that they did not want to move.  At closing, the seller said that alone made them accept ours over others. The rehab was pretty easy and inexpensive, just many many hours of time in. We are listing that house in two weeks at 130k, meaning if we pay all realtor fees and closing costs we would walk away with approx. 30k.

The biggest adversity we faced is not having a lot of money to get started. We had just gotten married the month prior to buying the house, and paid for that in cash. We had to shop around until we found a good mortgage agent who was knowledgeable about options for low money down buyers. What I learned was mostly the process of buying a house and the importance of knowing as much about the property you're interested in as you can.

Best of luck to you in your future investing! I hope you'll be able to avoid some of the same pitfalls others have found.