All Forum Posts by: Jean G.

@Dax Gurr

I'm assuming you considered this, but just in case, if the purpose of the property is to do buy and hold (as opposed to flipping), you could consider asking the current occupant if he would like to stay and pay rent. You can make it attractive for him by charging less rent than he would pay somewhere else, and the attractive part for you is that you don't have to do anything, get revenue from day 1, and most importantly no rehab (which could be significant depending on the condition of the place).

Others will argue that if the person didn't pay their mortgage, they're probably not a good tenant, but I followed the above strategy on a Hubzu house. I negotiated with the current occupant even before the auction (small town, was easy to track her down through someone who knows someone) and she ended up rooting for me to win the auction, as it would have made her life easier (she hadn't been able to pay because she got divorced and the house was severely under water, but would have been able to pay me just below market rent. Also, no other available rental properties in that price range the small town.).

Of course I ended up not winning the auction due to Hubzu's unrealistic reserve price, and on the third auction, someone paid them what they wanted and got the house.

The occupant ended up calling me later on to thank me for my efforts. The new owner had given her a week to get out (and wasn't interested in her staying).

Anyway, just another idea for the right situation.

Jean

@Jared Vidales,

Congratulations! You're really lucky to have gotten something interesting off Hubzu, but other readers shouldn't expectsimilar results :-) I've bid on many properties in multiple states with Hubzu, cheap ones and an expensive one (similar to yours) in Hawaii, and while it happens often that nobody else bids, they always (in my cases) have high reserves that are close to market. One particular property I've been bidding for 3 months over and over with no competition, and they still don't lower the reserve. Doesn't make any sense to me. I've had much better luck with Homesearch, while Auction.com always has other bidders and bids mostly reach market price.

Jean

@Shaun Hunt

I'm not sure yet if I'll do to the place what you think I'll do because I'm not sure if it's worth it. I might just do the bare minimum. I do have time right now, trusted contractor an hour away, and some cash. But I don't want to throw good money after bad either...

I'll let you know how it turns out!

Jean

@Tony Stinziano,

you should consider coming to @Phillip Dwyer's BP Meetup next week to meet several local investors. I'll be happy to chat with you.

Here is the info: https://www.biggerpockets.com/forums/521/topics/267986-las-vegas-meetup-january-2016

Jean

@Tanzeela Qureshi,

to give you an idea I paid $1200 to get a parcel surveyed and platted in Southern UT. You're probably too far for my surveyor though.

Jean

I agree with @Christopher Brainard on the deal looking slim. If Ryan needs to pay 6% selling commission (3% if he's a realtor), and let's assume the rehab gets overshot as it always does, it gets into risky territory. An extra $10k on the ARV would make a big difference.

Jean

Daniel,

if you're looking to get conventional financing in your name but still form an LLC with your partner, you may consider the following recipe. You will not be able to take conventional financing straight with an LLC, and if you transfer the property to an LLC after closing, you could trigger the due on sale clause.

- buy and close the property in your personal name (without your partner)

- transfer the property into a grantor trust or land trust (this is allowed and will not trigger the due on sale clause)

- assign the beneficial interest from the trust to the LLC

If your partner is contributing any of the downpayment, it gets more tricky. A conventional lender will want to see the downpayment seasoned for 60 days (ie it needs to be sitting for 60 days in your account) before you apply for the loan.

Of course my suggestion is for educational purpose only, and you should consult your own attorney since I am not an attorney.

Jean

@Shaun Hunt I'll take you up on the dinner offer and yes I will be interested in your contractors when the time come. I am thinking of possibly bringing my trusted contractor from Hatch, whom I already have good experience with. I'd have to pay for his lodging though since it's a bit far to drive back and forth.

The interior comestic work really doesn't worry me, it's all work that I understand and could do myself if needed (which means I can instruct and monitor contractors). It's more the structure of the building (ie things I can't see and don't know) that worry me.

What transpired so far from my engineer, is that we believe the existing peers are not holding well and the perimeter walls continued to settle even after the installation of the last peers in 2006, so those will need work too. So I've decided to follow @Leigh C's strategy and use the engineer's report to reduce the price to $31k. If the bank agrees, I'll gamble (fix the foundation, but probably not fix the destroyed unit for now, and keep the other 3 rented, rehab as people move out), if not I'll walk (or see if @Skyler Smith is still interested after reading all this :-)

Jean

@Justin Silverio Yes I did select "number of units" and that's what lead to the bad list containing single condos. I'm thinking I need to also exclude a few specific zonings or something like that, in order for this not to happen?

When you suggest Listsource resellers, can you recommend any that have online list building just like Listsource itself? Someone higher up recommended Yellowletters but you nee dto build the list offline through one of their sales people

@Phillip Dwyer No I didn't do A/B testing yet, I don't know if a 300 contact sample is big enough to  do that?

@Shaun Hunt

I did visit the building last week but only got into the "bad" unit, not the other 3 occupied units. In the vacant unit, they have fixed the plumbing leak and there is no longer water standing. The stench was bearable. I can see how that unit could be fixed. If the slab is properly repaired/replaced, it's no different from a normal gut (and I've gutted stinking places before) with a normal rehab crew.

That's what prompted me to post here. It wasn't bad enough for me to clearly see that it's a bad deal.

The more important question for me is the general condition of the rest of the building, and of the other 3 units that I didn't get to see (yet). Ie cracks in the stucco and drywall all over the place, and general structural condition.

From what you're saying, it's not worth fixing, which is what I'm leaning towards as well, however I've also considered @Leigh C's strategy. The other units are occupied right now, and if the building is stabilized and all I need to do is fix the foundation, and can continue operating the other 2 units, that could be an interesting option.

Jean