All Forum Posts by: John Guy

The beauty of real estate is that there are so many ways you can potentially make money with a situation like this. With an inherited house, you can definitely make something. 

I would start by getting a look at what you're working with - paying for an inspector to visit isn't a bad idea, but depending on how much hoarding was done, it may be wise to remove some of the junk items first so they can give you a more accurate report. 

Also consider what YOU want to do with it and what works with your lifestyle and your end goal. Are you interested in a fix-n-flip? Just an "as-is" sale for quick money? Renting it out to build long-term wealth? All of these would come with a different approach. Take a look at the local market and see what some 2bd/1ba homes have sold for and what they would rent for. 

Could also just reach out to a local real estate agent to assist you with all of this and get some opinions. 

Good luck!! 

Thanks! I think it's worth at least taking a stab at it before committing to being an active sales agent & paying corporate dues, NAR fees, etc. I can always transition over to an active agent with a $100 transition fee. My office is located within a REMAX building (rental agency is owned by REMAX) and we have a bunch of incredible agents that have already taught me a ton. Thanks again for your input!

See, I love the idea of being an agent & being able to carry a sale to the closing table. It would be my preference to do both, but I am also the only person managing all 67 rentals... it's been an uphill battle finding an assistant at the hourly rate ownership approved and I'm just about at capacity for one person. 

I'm leaning towards on-boarding as a referral agent - no corporate dues and no dues to NAR. And I can transition down the line if I want - It's only $100 transition fee to become an active agent. Ogunquit (where my office is located) has an average home price of just over $800k. Lets say agent makes 3% ($24k), I'd ask for 25% referral fee ($6k) and walk away with $4,500 after the brokerage takes their piece of the pie. Since I do deal with buyers/sellers in my industry frequently, putting some effort into the referrals could be a profitable side gig.

Hello!

I'm 26 years old and live in southern Maine. I have been managing STR and LT rental properties for about 4 years and have a portfolio of about 67 properties. It is my W2. This summer, I decided taking the 55hr sales agent course would be the next step to continue learning about the ins-and-outs of real estate and be able to take advantage of the leads that come across my desk.

But I am at a cross-roads here. The brokerage offers both a sales agent company and a referral company, and I can hang my license at either one. With the crazy rentals workload, I'm worried I won't be able to be successful in sales while maintaining the quality of care I strive for with the rentals. I have a great network in southern Maine for both buyers and sellers. 

My question is this: Does anyone have experience with referral agents, and if so - what advice/suggestions do you have to make it a successful route? 

 Hey Chris, we can get the homeowner to sign a revised contract no problem, that's not an issue in the least bit. He just wants separation from the property & doesn't care how it happens or who ends up with the home. The reverse mortgage on the property is the only thing pressing us for time. The lender knows that progress is being made on the sale & probate is slowing things down, so they've been "at bay" but I'm sure they'll want their $$ soon

Thanks for the response Wayne. With the reverse-mortgage, probate and assignment of contract I figured that a financed sale would be extremely difficult to work with and a cash buyer would be needed. Where we got the contract with about 50k immediate equity, we would still be selling it below market value with plenty of "meat on the bone" for an investor to make money on it. 

Hi! 

My father and I have been pursing our first investment home - an off-market SFH in Rollinsford, NH. We went into it with a plan, but are considering pivoting our attention towards a property that falls into our "buy box" a little bit better.

About the Property: 

4bd, 2ba on approx. 1 acre. Signed P&S with seller for $275k, appraisal came back in at $327k. That area is appreciating rapidly and it's a good market (public schools are phenomenal). The current owner inherited the home and has let the property become distressed. His mother had a reverse mortgage on the property, and he can't afford to pay it off. It's definitely the "eye-sore" of the neighborhood - there is a brand-new residential development of about 10 SFH behind it. It is currently in the final stages of probate, with my uncle (elder law lawyer) walking us through that.

About the situation:

We don't have 20% down for a conventional loan, so our goal was to utilize my fathers FHA and I would gift him part of the down-payment. He is a contractor and very skilled at it, so we began the process of getting it to FHA standard (covering exposed wires, fixing some siding that had fallen, sheet-rocked a ceiling with old water damage, cutting grass so inspector can see septic, etc... we're about $1,500 into it). It's going to need a few more things to be FHA approved, but they're relatively minor. All the big stuff is sound (roof, windows, furnace, etc). The plan was to use his 1yr residency there to do a $25k rehab and sell afterwards. ARV is +/- $425k.

THE QUESTION:

This could be a home-run investment, but an opportunity has arose that might be a better fit for us and we wouldn't be locked into holding it for a year. WOULD I BE ABLE TO do an assignment of contract and try to find a buyer for the home that will pay $300k, & we pocket the 25k difference? Like I said, this is our first investment and we're just playing with some options and trying to learn. 

Thank you so much for your input, it's valued greatly! 

John 

Hey James, 

I manage STR in Maine. A few of the big components of my Guest Rental Agreement are as follows, which guests have to initial next to each clause & sign off on the contract within 7 days of booking the property.

- I understand the property is rented sight-unseen. If I am unhappy with the accommodations, the host will make every effort to make your stay as comfortable and enjoyable as possible. I am NOT entitled to a full or partial refund. I am responsible for any information I may have missed in the listing description. 

- Exterior Cameras: There are/aren't exterior cameras on premise. (if yes, locations). 

- Reiterate Cancelation Policy

- Reiterate Check-In/Check-Out Times & Procedures (Where to get keys/access code, where to put trash, return furniture to where it was found, remove food/drinks, etc). 

- Rules If Pets are Permitted (and penalties if a pet is evident or causes damages)

- Use of premise & overcrowding (max. guest occupancy, consequences of overcrowding/parties being thrown). 

- Personal Property (Check with state for process of abandoned property or property left behind - certain items/values have different procedures)

- Any quiet hours that the town may have in place. 

- LIABILITY CLAUSE!!!! 

Hi guys! 

Through word-of-mouth, I've come across an off-market lakehouse in Sanford, Maine. This would be my first deal. This is kind of a long message but I'm also putting my thoughts into words. 

About the house: It's a 3bd (easily can be 4), 3ba with a huge barn (old airplane hanger) that's been grandfathered in, built over the water with an additional bathroom and partially built ADU above w/ it's own meter. It has 150' of sandy water-frontage and I'm pretty confident I can get it for around $420,000... he's happy with only $20k down. It needs about $80,000 in renos, including septic and water being hooked up to the town lines and a roof. APV is $650,000. It's a perfect fix-n-flip. I would be getting a PML for the rehab via an investor (I am his rental property manager - he is also a licensed appraiser in ME, NH, and MA and going over there to get me accurate numbers today).

About the Seller: He owns the house outright and has since he bought it in 1984. He is a friend of a friend, of my girlfriend's family - elderly Vietnam Vet who lives next town over. He has no family and from I gathered, spends most of his time on his farm alone. I spent about 3hrs chit chatting with him last Thursday listening to his life stories, history on the house, his future plans, etc. He's had dozens of people try to buy but is, well... a tough shell to crack. He's old and set in his ways. He hates banks, realtors, and the government. Concerned about the value of the dollar and likes green cash. Most importantly, wants to pay as minimal capital gains as possible...

We ended the conversation with him saying "structure me a deal and let's talk. I'm not getting any younger and the house isn't getting any prettier". 

My Question: Any ideas on how to make this possible? I feel like there's a lot of potential, but I am struggling to figure out the fine details of it. Want some ideas from you guys before I talk to an attorney familiar with creative financing. 

Thanks a bunch!!! 

 Hey Erik, thanks for the info! 

This would be my first property - I currently rent & will be utilizing an FHA down the road. I was looking for terms along those lines... 80-90% LTV with 100% rehab is about what I was hoping for. Ideally it would be a 12mo, interest-only with no prepay penalties. Would eventually end in a refinance. However, if it be a 30yr fixed I'd assume 7% floor in this market.