All Forum Posts by: Howard Abell

Why are you going for an eviction? Are they in arrears? If they are on a month to month you should check the state laws for the proper amount of notice to be given that you are not renewing their lease.  If they do not comply with vacating in the proper time frame then file for an eviction. The cash for keys might help in getting them out sooner than the amount of time they may be entitled to.

I do not believe that the fact that you are a licensed broker precludes you from acting solely as a principal in any transaction. You should however, always divulge that you are licensed in the state.  I would also check with your state real estate commission to make sure this is correct.

It is a broad question and the definition of excessive risk is a very personal one. I believe that real estate investing offers the opportunity to take as little or as much risk as an individual can sleep with which is my test.  It also allows the investor to be as passive or as active as he/she would like to be.  So to answer the question, I would take the million and using reasonable leverage, put together a portfolio of income producing properties which could yield between 10 and 30 percent cash on cash returns.

The only limitations you have to success are all self imposed. you are now the "boss" of your own business. You know what they say about being a boss is that you get to work a half a day. 12 hours!! The point is that the amount of effort you put into the work will determine your ultimate success. Find a successful broker who will be willing to mentor you and learn from that person. Think about giving up a piece of whatever business you develop early on for the experience you gain from the assistance. Good luck in your new venture. 

It seems to me that you answered your own question in your statement. "the middle of nowhere", no tenant, no catalyst for growth" etc.....  You might consider prospecting for a tenant by talking to the local bank or looking for that retail tenant before committing to a purchase.  Could be worth a try. 

If the contract was written correctly, you should be in a due diligence period that allows you to back out for any reason or no reason at all. ( this is not legal advice, I am not an attorney) If this is the case then try to re-negotiate the price based on the new findings. Be prepared to walk away if these expenses are in fact a deal breaker. As he is in the middle of a 1031 and may have committed to a property you might have some leverage.

I might also suggest that sitting in a highly leveraged positioned while only receiving a break-even cash flow leaves very little cushion if the neighborhood, or the tenant base or  maybe the HVAC goes south.

In my experience as an investor and trader, I have found that unloading a non performing investment is very hard for most people to do. Just ask yourself whether you would buy this condo in the current market conditions that you described. If the answer is no than bite the bullet and take whatever equity you can salvage and reinvest it in a neighborhood like the one that you said was the cause of the decline in your property. It sounded to me like a better place to be. Just a thought.

One avenue to check out is to find a Chattel Lender in your area or state. One that is licensed and doing Dodd-Frank type of lending. If your tenant was able to afford 600/month than there is a good chance they could qualify especially if you keep the price near your cost.

Tenant Improvement funds is not unusual in commercial real estate. However if the  landlord funds it in whole or in part, He/she would amortize the expense in the rent payments over the life of the base term of the lease. In this case, 5 years. I would try to negotiate some money being put in by the tenant and then raise the rent on both the old and new space which would include the expenditure made by the landlord repaid after 5 years. If the payments are higher than the tenant can manage, try to negotiate an extension to the base term of the lease. There is no set formula so you can be creative in fashioning a deal that suits you both. Yes, this looks like an interest free loan and it is. But you are getting an improved property. Also the new rental rates help build value. Just a thought.