All Forum Posts by: Jacob Barnhart

Questions are bolded.

Realtors in my area are not very quick to make things happen. So after over a month of looking at a specific property (with hardly any help from the realtors I've contacted) I've decided this property will be a great starter for me, even at asking price if that's all the sellers will take. So the realtor told me Friday to come in to make an offer on Monday.

The property has two houses on it and a shop for me to run my side business out of. The main house needs upwards of $30,000 of renovations for me to feel like I can get the kind of returns I want. The natural gas heating has been deemed "dangerous" by the owner (or so the realtor "thinks") but I can't get much detail on what the actual problem may be. Regardless, they have the gas turned off. Since I assume the inspector will need the gas turned on, should I include some sort of request to have it turned on in the offer?

The second house (2/1 with carport) is still in great shape, Maybe a $3K-$10K needed to be really nice.

The second house currently has tenants that are paying only $350 plus utilities plus mowing the lawn. They should be playing closer to $750. They currently use the entire 850 square foot shop for their storage. I don't know how they get that much stuff to store, but they did. 

I'm not planning on using FHA financing so I don't necessarily NEED the tenants out immediately since I don't have to live on the property, but it would probably be best if I have them removed anyway since I didn't do their background checks, their rents are too low, and I need their storage space for myself, correct? Is removing the tenants something that needs to be in the offer?

 I am putting financing, inspection, and appraisal contingencies. What else do I need to know or do that you can see? What other information can I provide to help you help me? 

I am going through all of the landlord paperwork that comes with The Book on Rental Property Investing provided by biggerpockets and one of the clauses in the sample lease looks like this:

"

• a.AMOUNT: The rent for the Premises will be $__________ per month. For the period from Tenant’s move-in date, _________, through the end of the month, Tenant will pay a prorated amount of $_________ to Landlord. This prorated amount will be due on the first day of the second month of the Lease term, and a full month’s rent will be due before Tenant can take occupancy of the Premises. Tenant shall also pay $_________ towards the last month’s rent of the Lease term."

The way I am reading this it appears (assuming rent is $1,000/month) if the tenant moves in on the first day of their lease, say November 20th, they will be paying $333 for prorate on December 1st. But before the actual move-in the tenant must provide the full first months rent ($1,000) plus the last months rent ($1,000) plus a security deposit ($1,000) making for a total of $3,333 in the first two weeks.

Am I missing something here or was this just written in a less than ideal way?

Reading the page you linked, it says, "Single family housing sold or rented without a real estate broker" are not required to make accommodations for service animals. Does this mean if I were to at some point become a broker or a realtor under another broker, I would automatically have to begin making these accommodations (allowing service animals) in my rentals?

In case anyone is wondering, here is a list of all 50 states and the basic requirement for being a property manager. 

https://www.allpropertymanagement.com/propertylaw/

I've read a bit about the 203k loan, and my concern is that being in a small town there may not be any contractors familiar with the process (which was recommended in the sources I read). I'm still going to ask about the 203k route when I talk to a broker.

Is it possible that even in a small town, 203k is common enough that it would be possible? There aren't a whole lot of great contractors in my area - so far as I've seen.

@Chris Mason 

@Wayne Brooks

I have been seriously looking at a specific listing on the market for a while. I believe at one point this was one house on one property, and then the owners built another house on the lot and separated it into a separate property. The original house doesn't have functional heating at the moment so it would not FHA qualify and the sellers are not willing to make repairs. Would I be able to get FHA financing (or any low down-payment financing) to cover both properties with one loan?

@Jim D. The two homes are on the same lot. I believe was was built later and then given a separate address.

Thank you, I will definitely research the FHA 203k loan. @Marc Izquierdo .

I don't know how to tag people in posts :(

I have been looking at a property for a couple weeks that I believe would be a good starting investment for me. It is two homes, and I believe it is legally two separate addresses.  I got a tour from a realtor today and the bigger house was obviously a fixer upper. The small house is still in good condition with the exception of the  bathroom floor falling in, but I believe the small house must have been built much more recently. 

Toward the end of the tour the realtor mentioned that the house probably wouldn't be approved for FHA because it currently has no functional heating (non-functional natural gas heating) and there is some deterioration on the house.

Would I be able to be approved for FHA since there is another house in better condition that I could live in while I fix it up?

I would prefer to be able to live in the big house while I fix it up and THEN move into the small house to rent out the large one, but I'm looking at any options right now to try to figure out the plan.

I have enough funds right now to buy the house with an FHA loan and begin the rehab, but a 20% down payment would guarantee that I can't do much rehab for at least a few months.

So, options?

Is it possible to have FHA on both of these houses if one is livable?

Is FHA so strict it would prevent me from buying a house that I could have in FHA conditions within a few weeks of purchase?

Are there other loans I can look for? I wouldn't be comfortable with trying a BRRRR at this point with no experience.

Any other options I am missing?

I was just throwing ideas around in my head and was thinking... Has anybody ever heard of a strategy along the lines of:

1: Showing homes in need of repair to potential home buyers

2: Have the potential homebuyers tell you what kind of renovations they would want in the house

3: Get a contract between you and potential buyers for you to buy the house yourself, do the renovations and then sell the house to the buyers after all renovations are finished.

Essentially instead of the homebuyer buying it and then worrying about doing all the renovations themselves after it has already been bought, they can pay somebody else to renovate it before they put money into it then buy it after it is finished. This way they would be living in their previous home without all the construction until it is finished.