All Forum Posts by: Joe P.

While your analysis is correct, I don't think the seller is going to consider your opinion. They need to sell at the sale price, or else they wouldn't have put it up there at that price. It's probably at market value.

They may be wrong, their house may be unlivable, their expectations aren't realistic -- but they haven't changed the asking price to convey that. I don't think it hurts to put in an offer, but some agents won't even bother.

I do not recall which savvy investor said it, for some reason I think it might have been @Russell Brazil (sorry Russell if I tagged you incorrectly), but he led a response for someone with a similar problem; their offer was so much lower than asking and the investor was upset their agent either wouldn't put in the offer, or that the seller wouldn't even consider it.

Point being that just because your analysis may be correct, the analysis may not be accurate for the area or property you are trying to buy. If crappy homes can sell for 280k and the ARV is 300k, then prepare to pay market value, or don't plan to play in that market.

Now, counterpoint, if comps in the area suggest your offer is fair, then by all means, continue forth. You're just dealing with an incompetent seller or agent who put the house up for sale for an exorbitant amount, but I don't think there are many cases of that.

Rehabs tend to be similar cost (depending on finishes) in a 200k house as they are in a 400k house. A new kitchen may be 30k in a 200k, and 40k in a 400k house, for example. Why not find a distressed property in need of full rehab at that cost where you can bring the value up to ARV, not something that only has 20k room and needs a 65k rehab, where the seller won't sell it to you anyway? It just seems like a lot of things not working in your favor -- you're trying to jam a square peg into a round hole.

Frankly I don't think that is as important as ensuring there is demand for short-term rentals in your area, and the time/maintenance needed in order to succeed in that business.

I assume you mean AirBNB, so how do you know the local market supports consistent and constant rentals? How do you plan on turning over the units (and doing so quickly)?

Also, to wholly answer your question, what kind of short term rentals do you expect? Are you near a business of some kind (if so, a 1BR is easier to rent). Is it a vacation rental? Do you expect couples, families, individuals? That'll dictate what kind of people rent from you and what will "sell."

Frankly I'd rather get someone in long-term for a year lease on a duplex.

If I recall correctly without any units to your name, the best route is to use your personal and start building a relationship with a local bank. LLC might require proof of funds (larger than personal) and may have to be a blend of all those who own the LLC.

I'm also (respectfully, of course!) not so sure I agree with @Thomas S. as it can be difficult to find tenants as it is, and while the possibility exists that non-married couples will break up, I think with less skin in their relationship game, they have an easier time subletting or paying to get out. If it happens with a married couple, there may be children involved, assets frozen, lawyers, etc. While perhaps the chance is lessened if they are married, the hole you may find yourself in as one of many "creditors" might be deeper than you want to deal with. Just my $0.02.

I think he makes some good points, but I have rented to dating couples in the past. Some of had problems, but we're all adults. You pay your bills or you find a way to make it work, or you don't and you go to eviction court/small claims.

Shaun, this would be terrible. Therefore if you need to, alert the authorities.

But this still doesn't change the fact that she has a signed financial obligation to meet. While the situation certainly tugs at my heart strings, if I were a hospital, or a creditor, or anyone else...would they simply say "no problem! Someone else can pay your bill!" I don't think so.

This is rough, this is life, and this can happen. But you can't let everyone out of their obligations every time a problem comes up.

Your goal right now is to limit your financial damage. There is no "out" clause in your lease -- she signed it, she's obligated to pay it.

You are also forgetting that there are two other people on the lease. Again -- its up to them how they want to play it. Either they sublet, get a second job to support the rent, etc., but this just isn't on her. There are 3 people on the lease and its up to them how to solve the problem.

If one defaults and the other two cannot pay, then they're all affected. All three should be reported to the credit bureaus and be taken to small claims...that's the point of three people signing a lease.

Hi all,

I just purchased my first (really, the second) investment property in Gloucester City in August. I've got a few questions about the CO/licenses/extra costs mandated by the city.

Is anyone familiar with them and might be able to give me a few minutes of their time?

Specifically, interested in the following:

• Certificate of Occupancy -- do you need a new one every time a tenant moves in, every year, or some other interval? And what is the cost for this each time? The previous owner took care of the COs before I purchased, but I'm not sure how long they last.
• I received a "Registration Renewal" from the city for my duplex (each unit costs money), and same question as above -- do you need a new renewal every time a tenant moves in, every year, or some other interval?
• Are there any other costs in Gloucester City I should be aware of, e.g. local departments like Police/Fire/Garbage? The above two items did not come up in my due diligence and I want to make sure this is just a puddle, not a well.

Thanks in advance BP for your help!!!

Yes you can. She's on the lease, she has an obligation to satisfy the terms. She certainly doesn't have to live there, but she is responsible for paying for it.

Do you have an option to sublet? If so, I recommend initiating that process with her. Tell her she can find someone to sublet for the remainder of the term, assuming they go through the vetting process with you as you would do for any tenant.

Otherwise, sorry to hear about the situation. But you're on the lease. You just spent a lot of time and money to fill that vacancy, why would you let someone who agreed to pay you X dollars over the next year to simply walk away?

Hi Katharine,

I have an interesting view as I grew up across the bridge, but had a girlfriend who went to TCNJ and lived in Ewing (this was a good 10 years ago). Not sure about the taxes, but they are probably high. I recall many houses being in pretty poor shape in that area, and close to some rough areas, although it might be better now.

You probably have high turnover costs and college students can be messy. Build in higher maintenance, CAPEX, and cleaning/property turnover costs to ensure you're capturing the numbers correctly.

Watch for foundation/basement issues as well as those can be costly.

@Karl B. I'm not handy myself but I'm curious/concerned if that would be like the old cartoon, where you plug one hole with your thumb, and another opens up, you plug that with a toe, and another opens up...in other words, there's so much pressure because the water can't go anywhere, it just spreads to other areas and creates more holes, or the pressure builds up and "explodes" somewhere. I'm not sure how that works, frankly, but that's a concern.

@Nathan Gesner I may change my procedures a bit to get a security deposit hold. NJ has very strict laws on the amount of money you can charge for a deposit (1.5x rent). I'm curious to know your procedure there; do you go to their current residence and obtain that holding deposit and have them sign?

@Courtney King thanks for the feedback; I find in most cases that being honest and trying to do what is right is best. I also want to fix problems because that is part of our job as landlords.

There is only laundry, storage, and utilities in the basement, it was not a living area. Which is why I want to offer them a discount for a lack of usable storage and laundry until resolved. That should help with any laundry costs and if they need a temporary storage unit as well, I think.

But I also want to set the boundaries on this and "control" this to avoid it getting out of hand. I could see someone saying "give me half off" which won't happen -- I will offer a set discount, or free cancellation, but I can't think of any other viable solutions.