All Forum Posts by: John Jessie

@Brian Pulaski - you hit the nail on the head. Thank you for that.

I appreciate the insight. I don't intend to let the potential buyer choose what/how they want something done. 

I plan to say, "Here it is, as is - my asking price right now is (X)" and then I exit the picture totally. My price will differ from now, at the end of demolition, and later, when I have started to tile the bathroom or install cabinets in the kitchen. Regardless, I plan on letting the buyer take over, and my asking price will be based on how much work I've done at that time. 

I am in the middle of a flip/renovation of a house that I bought at a foreclosure sale. 

It’s not a total renovation - just updating kitchen and master bath, and painting throughout. I’ve gutted the kitchen and master bath, and I’ve gotten a few offers on the house in the middle of the reno, and even shown it a couple times. 

I've thought about going ahead and listing the house FSBO (w/o price) and seeing where it goes. Anyone have any experience similar to this?

Thanks. 

I have purchased one house on Auction.com and preparing to bid on another. For the first house, I either had competition or the bank was bidding against me - I suspect the latter. However, the bid increments got smaller after we reached a certain point (i.e., started out at $10,000 increments: $5,000; $2,500; $1,000; $500; etc.) This gave me the sense that as the increments got smaller, we were approaching the bank's reserve. Anyone else have a similar experience? Just feel like it may be one way to possibly "read" the folks bidding for the bank. 

I am in the process of purchasing a self-storage facility that currently has tenants. Does anyone with similar experience have any recommendations for what I should do i.e., handling the assignment of rents from the seller to the buyer? I understand I should send a letter notifying the current tenants of the property transfer, but is the assignment of rent revenue handled mostly in the purchase contract between the seller and buyer? Any other suggestions when buying self-storage facilities? 

Kindly.

@Jay Hinrichs - yes, the law is well established here in KY that the penalty is triple for violating timber clauses, logging over property lines, etc.

As always, thanks for your insight. I am going to look into the Timber Deeds. I was never a part of the "good ol' days," but I miss them. Haha

I am looking at land that has a fairly decent stand of marketable timber on it. The land has decent a location (i.e., it's not in the middle of "no-where"), but it is on the side of a hill, knob. However, it does have a nice pond on it that may provide for an attractive site for some development once the land is cleared off.

My question is in regard to the bank note needed to buy the land and the bank's interest in the timber. Let's say, for instance, I get the land (50 acres) for $100k ($2k/acre). A portion of the timber, after it's harvested and sold, brings $60,000. In KY, we typically do a 50/50 split with landowner and logger. Therefore, I would realize $30,000 in the transaction. Would a bank require a security interest in the marketable timber, requiring me to give them the $30,000, due to the harvest of the timber and possible diminish in value of the land? 

I have talked with @Jay Hinrichs about this briefly, but I would like to see if anyone has any perspectives from the angle of a bank/lender. 

Thanks in advance. 

@Account Closed These are real estate investors and very wealthy people who have made their fortune doing other things. They see real estate as a pure tax write-off hobby.

I consider it a pretty good deal - two properties are located in areas that are active and sprawling - one property in particular is situated next to a massive vacant lot (where a factory once stood, but was demolished years ago) that has been bought by commercial developers who have released plans to bring a large grocery store, along with shopping and eateries - I know this information because, well, just trust that I know. Therefore, I believe this property will maintain its value if not increase over time.

The second property is located at an intersection of a busy, but quiet, highway that has seen development creep its way in a quickened fashioned over the past couple of years, so it is fairly ripe to get. As a plus, both properties have sellers who WANT to sell. 

The other properties are land that have marketable timber and would make good home sites. 

I hope that's not too much. 

In sum, I'm not pitching to my potential investors, "This is property A, and it is nice." 

Instead, I'm pitching, "This is Property A, and its value is supported by B, C, D, E and F. It's going to work for you."

@Diane G. Indeed, as in some instances that could be the case. Again, your feedback has been insightful. 

@Andrew Johnson @Jeff Rabinowitz @Diane G. @Ellie Hanson @Robert Shaw

All - excellent points and very insightful - maybe I should have titled this forum post "Too bad of a deal ...?". 

To clarify, the investors I am considering pitching have the cash to buy every property that I am looking at tomorrow and would not need me to get in the way. That said they would benefit, somewhat, from a tax standpoint. I guess I would need to consider where I could add value instead of just stand there looking for a handout. Should I look to split their down payment on the tail end of the deal? (e.g., When the note has fully matured, I offer to pay them back half of the down payment, or all of it?). 

Again, being a first-time home owner and small family, I can't put too much skin in the game - if any. I have good, close relationships with my potential investors, so I would hope they would be at ease knowing they have me looking after their interests and working hard for them to ensure it's a win and not a flop. 

I apologize for lack of real estate lingo. Your insight, thus far, has been priceless.