All Forum Posts by: Jay Ford

Hi Ryan,

Yes we did.  She wanted double what the value of her place was.  That wasn’t going to happen.  After a few more outbursts at tenants & Airbnb guests, we proceeded with our attorney sending a letter informing her of our intent to deconvert.  

She tried ignoring it, so we had a certified copy sent.  We explained that instead of paying legal fees to get this done, we’d rather put more money in her pocket.  But the choice was hers.  

She finally came around and we paid her an extra $10k to go away. The unit sold 2 months ago.  Hated playing hard ball with her.  However, it had to be done.  Every tenant we have sent an email thanking us for getting her out.  All 5 have since renewed their leases.  We haven’t had a single Airbnb guest complain since then either.

 The law protected our interest.  Ironically, our legislature just passed a moratorium on condo terminations.  We got this done just in time. I have reached out to several lawmakers that are trying to get the law permanently changed.  They need to hear our story.  The law protected our property rights, and peace for everyone in our complex.  

-Jay

Hi All,

I have electric & gas sub-metered already.  Now I need to tackle water as it’s rising in costs each month.  My plan is to have the water meters installed by the city for direct billing to the tenants.  Number 1 I won’t have to bill the tenants and try to collect.  And number 2 it gets us all off Commercial pricing and instead it reverts to Residential.  

The problem is finding plumbers that can do the job.  Is there a cost effective option here?  Water lines are in the crawl space in hallways separated by unit already.  Is there a way to install a meter that can track remotely or through electrical to the city meters in the alleyway?  

I feel like raising rates on tenants is a Band-Aid and I want to do it right the first time.  

Thanks,

Jay

Hi Everyone,

Here is my unique situation. I own 7 of 8 units in a condo building (AZ). I've acquired the other 7 over the past few years. The lone holdout owner has refused to sell which I've been fine with. I've only broached the subject a couple times with her. She is not pleasant to deal with. She's very irritable with tenants. I have tried the nice guy approach. Ive been very fair with her (haven't raised HOA fees, improved the maintenance of the property, Etc.) I've tried just keeping things very business like the past year. My aim was not to get her to leave, but she's become so hostile I don't want to lose quality tenants that I've worked hard to place into the rental units.

My ultimate goal is to deconvert the condos into (2) 4-plexes for LTR in one & STR in the other (market has been great for both so far). I have cash on hand to buy her out. Has anybody been through the condo deconversion process and could share some tips to motivate a reluctant owner to sell?
I’d prefer to do this with a willing seller.  I do have consultations next week with a couple RE attorneys to go over my options legally.  

Any insight from fellow investors would be appreciated.  Thanks!

Hi guys, 

Thanks for the input. Taylor, I did speak with a real estate attorney.  So basically what my accountant was referring to is a subdivision law affecting those who buy 6 or more lots or houses in an area.  AZ was having issues with investors doing this decades ago and not providing/planning for infrastructure.  No roads, sewer, utilities, etc. We verified this doesn’t affect me because all of these things are already in place, and the original owner did everything to the letter of the law.  So I’m now in escrow!  My wife and I are quite excited about this.

Ben, I will absolutely post about our results since it's of interest to at least one other investor. Our plans are to try 2 of the units as STR. We don't want to evict any of the existing LTR as they're been there for years and are great. I will gradually rise rents up closer to market rates as they renew each year. We're fortunate in this area as it's a tourist hot spot high in international tourism. LTR's are also in tight supply and demand high. If the STR's are more work than it's worth, then we can always make them LTR's.

We originally bought the first unit to be our 2nd/ vacation home.  This opportunity We couldn’t pass up.  I’m thankful I forged a close friendship with the owner and he didn’t test the market.  Hopefully it’s a win-win situation for everyone.  I will keep you posted.  

Hi all,

This is my first post (and it’s a bit long). I have a unique opportunity in front of me.  I currently own one condo in a property that is non-warrantable due to one investor owning 6/8 units, and renting out all of them.  I have assisted him with the operations and keeping the property up.  He is elderly and can’t do much any more although for 25 years he did a great job of maintaining the property.  He does not have any family, and is facing the possibility of going into assisted living.  He is giving me right of first refusal as he is now looking to sell all 6 units which would give me control of 7/8 of the building.  

The price of each unit is reflective of the fact that it’s non-warrantable.  I’m considering it because: 

A) Great tenants are already in them

B) I’m familiar with the building and the operations of it

C) It’s far less expensive this way (50% less than Multi-Family comps in a strong rental market)

D) I’ve done my due diligence in having the property inspected - and no significant problems were found.

I have a great lender that worked with me on my first unit and Understands the entire story.  35% down at 3.625 fixed rate 15 years and has approved my purchase of the other 6 units on individual portfolio loans for each property. 

I met with an accountant today who warned me about possibly needing to change the subdivision since I would be majority owner?  Has anybody heard of this? This is the first thing that has given me pause.  

The paperwork on the self-managed HOA, tax, and city records indicate there hasn't been a change since the property's Inception in 1984.

I have found nothing on line nor have any of my other contacts heard of such a thing. Thanks for any help on this complex topic. 

-Jay