All Forum Posts by: Chris Da

Thanks for your input Jon. The place really doesn't need much more than paint and carpet. I have been pretty fortunate on my rehabs, as I do most of my own work and I am able to use my friends workers @ $15/hr. These guys are pretty good. My painter has been painting for 34yrs, so he is pretty quick, and makes it look good as well.

I agree with the garage door and it being an illegal addition. The inspectors in my area are pretty decent to me, to the point where if I need a U&O permit and a few things are needed to be done to pass, they usually just give me the "pass" and tell me to take care of the loose ends. I always follow through, and I am a pretty nice guy, so it usually works out.
About the finance end of the deal. I should have explained a little better. Friend of mine put me in touch with a banker he uses locally.(My friend has about 7 million out in loans with this bank and has flipped hundreds of homes, so they have a great relationship.) Anyway, he set up the meeting and the banker suggested that I 1. pay cash for the house, then re-fi it with him at %6.5 5yr balloon or run a line of credit against my personal house and buy it with that money, then once I repair/rent it, we will do another apprasial and he can loan me 80% value which then I pay off the line and keep some of the money for future use as someone else will be paying the loan via rent.
What do you think of that idea? Sounds pretty good to me.
The ONLY thing I dislike about not using conventional finance for this type of deal is the 5yr balloon, but in my grand scheme I had been hoping that the market came back in the next 5 yrs and I had planned on selling some things, including this place.
I know you don't have a crystal ball, but what is your opinion of the housing market in 5 yrs??

Hello all.

Well I have been looking for some time now for another decent deal, and I came across this one..

Small 3br brick twin in decent part of town. Fannie Mae owned and listed @ 44900.
The place isn't really bad at all. The garage(single) was converted to a so so living room which has beautiful paneling and ugly carpet but we can over look that simple issue. The one thing that I needed an opinon on was when the converted the garage to a living room, they left the garage door (which is terrible looking) in place minus the tracks because it can no longer go up. Being that the house has a decent little drive way, I think that the sq/ft added by the garage is a pluse. What I wonder about is, would it be better for re-sale to put a new NON working garage door, or to just frame out the opening and put siding? The rest of these little houses all have garage doors. Just a matter of someones opinion, but if I where to frame it out and side it, sometimes that looks worse. Need an opinion.
Anyway enough of the petty things. I bid 36k on this place and have a 4 comps in the very close area settled within a 60 day window suggesting 70k. Just got the notice from Fannie Mae that there is another bid and they need my best offer by 5pm Monday.
My plan was to buy it for 36 and put about 4k into it to really get it looking good. Rent it Section 8 for approx 1000 month, and continue to do so until the market breaks (5 yr window) then sell.
Now, I was going to pay cash for this place, then my lender at the local bank was going to put a mortgage on it for about 65k so I could put some cash in my pocket .
Now, I never did it like this before. Is that a decent way to going about this deal? Also, when I buy it cash, should I title it in my name or LLC or does it not really matter. The only reason I as is that I guess if I plan on doing a re-fi it would be better to just be in my name. RIGHT???
Also I figure the highest I can go on this deal is 40k offer/ What do you think? 40K+3500 closing+say 5k repair to be safe=48500. Value approx 65k 16.5k spead in this market.
Another thing I hate about bidding these things is I don't know the listing agent, which is a negative for me. I hate to say it, but they have their own little community. For all I know the other bid is at 25k, but what can you do.

Well, with the information I gave you and a plan to hold for 5yrs if need be, I think it can work, but always like to ask other peoples opinion. This market drives me nuts, but I do feel we are close to the bottom..

That isn't such a bad idea, as I could quickly re rent this unit if they were gone. I will look into that in the morning, as it makes sense.

Well, have an interesting situation with a tenant that I just evicted.

Well, I followed the rules..3yr tenant all of the sudden just figured they no longer need to pay rent. Tried to contact them, as Oct rent was not payed. Finally got ahold of them and asked what was going on. (They are having marriage problems, and they are't too bright either) Anyway, I tried to explain that they need to pay the rent, and I was told to go to hell in a few words. Marched to my truck and bang, posted the eviction notice, as I now no I am getting nowhere. Well, today was court day and I won. Big deal..Now they have to vacate in 10 days, and after 10days if they don't vacate, I have to file for the sherrif to remove them...10 more days, and they know it.
After court, the downstairs neighbor called me to let me know they have been running the water full blast for the last few hours, as they plan on jacking my water bill into the thousands as some type of sick revenge.

Well, what am I to do. I knocked on the door, I then entered, and went off on them like a mad man. I wasn't nice, as they were flooding my apartment on purpose..I went down stairs to the non access basement and turned the water off to their unit..

Now, what am I to do? I know you can't turn off peoples water, but what do I do? Let them ruin my building? What can I really do? Is it my fault they didn't pay the rent? No. I followed the rules, and this is what I get. From what I gather, I am really not even allowed to enter their apartment, but I consider that an emergency.

So what do you do? There water is still off as of now, and I am not going to turn it back on to have them ruin my building and disrupt the handicaped lady below them.

I am willing to do what ever it takes. There has to be a simple way to solve this. (Trust me , I have some ideas that I am not going to post.) But honestly, what is a way to handle this situation which won't get me in trouble.

What are some ways that may not be so suggested, but work well in times like this?

Good friend of mine who owns 150+ properties tells me just to play dumb like them. Says they will call legal aid, and then legal aid will call me, to just play dumb. Then go over and back up the sewer in their unit, then take the electric meter off the house, and play dumb, then he tells me to install a siren in the basement pointing in to their apartment and set it off at 2am and leave, and play dumb, then he says the best way is to jump 220 to all the 110 outlets and all their possessions will be ruined. Mind you this guy has the money to pull this nonsense and gets fined for doing so, but really doesn't care.

Now that you all see the advice I am getting, I was hoping someone on here could give me a more proper way of handling the situation. Unlike my friend, I don't have enough money to play these silly games that he does.
I would like the correct answers. thanks

I tend to do things a little different than most people. I own 7 properties, of which I have mortgages on all. I always have enough reserve to cover all the mortgages for 1 year. That is the rule I use. My mortgage guy tells me most people are not in that position, and that my be an error on my part, as I know in order to make money in this business you have to leverage alot, but I have also seen alot of guys think nothing is going to go wrong, or everything will just work out. I am more conservative, and that my be the reason I only own 7 properties verse other friends of mine owning 100+. I also have small children, so that is in the back of my mind always.
I plan on building a single house later thin year or early next year. I got the final approval this week. In a deal like that, most people would borrow the money, but I am going to do the deal 100% cash out of pocket because I am not sure how long it will take to sell, and I don't want to pay the bank all the interest. I figure I will only be losing a small amout if interest having the money in a CD. Just my take on things.

As I said, it was paid for w/ a heloc .181 at the time. Was a sheriff sale house.
I am pretty good at comps, etc as I have access to trend. To be honest, I really try to avoid realtors, as I find most of them REALLY don't know too much, and few of them are REALLY in the business of rentals. I must admit, they talk a good game, but most of the time that is about the extent of it.
I formed my comps on my own. Simple, The house is in a townhouse community with about 90 houses just like it, except fot the end units. The house 3 doors up just sold 3 weeks ago for 201k...I pulled the comps on the MLS and they fall between 198-203k within the last 3 months. I don't think you can do much better than that.
Now that I think about it more, I feel I am entitled to what ever the difference is between what the mortgage is and what we COULD sell it for. (HALF) plus my money and time.

I am going to follow this up on Monday with a lawyer, as I know a very good realestate lawyer, but was avoiding paying the $300/hour. Maybe it is worth it just so I really know where I stand.

Thank you for your input, and I did suggest that idea to him.
I wasn't even thinking of adding 5-10k, but maybe something like 3k, as I am pretty easy to get along with. He told me in one of his temper tantrums that he would give me 2k total and if I didn't like it he would see me in court as his family has retainers on many high dollar lawyers.

What I am trying to figure out is, what am I really entitled to if it goes to court?

My one friend who is in the rental bus (166 properties) told me to sell my 1/2 of the deed to him for 30cents on the dollar after the place is appraised, quit claim it to him, and he will have a field day with it. I am not sure if that is really an option or not, and to be honest, I really don't want to do that.

What power if any do I have if I wanted out today? What can I really do?

I agree with you, as that is a cut and dry answer, but what do I do if he just doens't want to sell it? And I understand a judge could order the sale, but what am I entitled to if that were to be done? I really don't want it to go that far. I just want out, but he is using his family leverage against me, as he basically can just call mommy and daddy and if I were to sue him, I will have a battle on my hands I could not afford to compete with.

Hello all, and I am back here for some more advice.

For some of you who were responding to my last post, I thank you.

As stated in some of my other post, all is well with my rental investments. All are rented, and it runs as it should, except for my one property which I own with a friend of mine.

To update you all, my buddie and I purchased a "flip" about 3 years ago....And it is not flipped yet, but is rented.

Anyway, it was purchased as a flip..My buddied payed cash for the place, and it was titled in his name only at first on 6/5/2007. My name was then added on 1/3/2008 as tenants in common.

We have had our ups and downs, and as of now, the place is rented to a good tenant. The rent JUST makes the place break even.

Anyway, the issue I am having is my buddie is from an extremely rich family 20mil+. He always gets things his way, as most people with that kind of cash do, even though he hasn't had a job for 3 years now (age 42) and may never need one either. You get the point.

After a falling out that we had, we began speaking again. (A tenant was evicted, and I went an did all the repairs to put the place back to how it was. (It is a nice townhouse worth about 201k in this market. (we payed 181k for it)

Anyway, after speaking to him, I asked him what his plans with this place were, as it was originaly purchased as a flip.(long story as to why we didn't flip it.) The responce I got was that he never sells anything, and that he wanted to give it to his son (who is 4) someday.

Now, in the back of my mind I am thinking..Hum...I put in about 5k in supplies over the last 3 years and about 100hrs of labor to keep this thing maintained to the highest standards, and I pay 1/2 the taxes every year, and you want to keep it forever?? Now mind you, I recieve NO rent money for this place. The rent goes to him as he payed cash for it via a HE loan against his house. which is used to pay the loan off. Makes sense, plus he gets the write off.

The only reason my name was added to this property was 1, I had some liquid cash in it, and 2, my buddie has a shaky past, as most spoiled rich kids do..(see my point again.)

Anyway.I honestly would like to get out of this deal. I know I could talk to a lawyer, but I am sure someone on here could give me some advice as well.

As of now, like I said, there is a tenant in the place, and it breaks even, but why would I continue to service the place, and pay for repairs if he has no intentions of giving my money back. Another thing I was wondering is how do you come up with a fair number to ask for?

Suppose I have 7k total into it and 10 more years pass? Does he really think I only get 7k? Would a judge think that as well? I have never been through this before so I just don't know.

What I do know is that my buddies father taught him that there is NOTHING more important than money, and that EVERYTHING has a price including life itself. (do you see what I am dealing with here?)

I do not come from a family that has this sort of life style and to be honest TOTAL GREED. I just feel I deserve what is mine.

I have no problem sticking up for myself, but I am not sure where I really stand? In time can I really "FORCE the SALE" if push comes to shove? Can I sell my 1/2 the equity to a 3rd party? And what is really my half the equity? I honestly know that considering he took the loan out which is still outstanding that I am not REALLY entitiled to 1/2 the value of the deed, but once it is payed off, and I continue to do my share I would think I am.

Need some opinions. Thanks..Plus keep in mind this isn;t the best market right now, butalso that this house is in a great location and would sell, but now might not be the right time.

Update:

The tenant and I spoke the other day. She reported him to HUD housing, and she went right to the top. Contacted a congressman, and the DIRECTOR of HUD is involved. I am cleared of everything, as the tenant let them know that I have been tring to help her out in anyway I can. Section 8 demanded an inspection of the place, and they inspected it with 3 kids there and NO electric or Hot water. (And for the record, this is a VERY NICE house, not a typical section 8 property.) I comped it yesterday, and in that community the average house is on the market for less than 90dyas, and comps are from 192k-217k as of 3 weeks ago for the exact same house.)

Anyway, I don't know if section 8 has been in contact with my partner or not, but if they were, he doesn't seem to care, as he showed up there with 2 guys, went into the house, cornered the tenant and told her she will be the F*** out of his house buy Sunday or he will remove her. Called her a F*** Bit** a few other nice words and left.
I told her to call the police and get a protection for abuse order from him, as he is a loose cannon. She is afraid of him.
I am going to the islands for a week, so I won't be in contact with her, but that is where it is as of now.

I feel bad for the lady. Since she is poor, she can't find a lawyer, and the only place I could suggest is Leagal Aid.
It is a real shame, if I had the ability, I would post pictures of this house, and how beautiful she keeps it. You guys would all think this partner of mine is nuts for getting rid of this tenant. This place is decorated like the Trump Palace. I mean it is perfect, better than my own house. (Sometimes I think I should be on Section 8) ha ha

Anyway, my partner has not made any effor to contact me during this episode, so I guess that is a good thing.

I have a feeling he is gonna get himself into some hot water, but I am sure it is nothing his mother can't write a check for and make it go away.

Stay tuned for my next update on the drama.