All Forum Posts by: Jon Quigley

Hi.  One point regarding the CO detectors.  CO is actually a byproduct of combustion and is odorless (hence one of the reasons it's so dangerous) and that's what the detector is for, because one can unknowingly breath too much and it can be fatal.  This typically comes from a malfunctioning furnace or hot water heater.  

If you are smelling something such as a natural gas leak, that is not something picked up by a CO detector (that I'm aware of) because that's pre-combustion.  However if a serious leak occurs this can be an explosion risk.  This does have a smell which is put in purposely by the gas company to detect if a leak occurs.  

Hi.  I have what seems to be a trivial question related to Subject To's, but I really have no idea of what the answer might be.

I've read that mortgage companies are not so happy about people assuming mortgages and are likely to call the loan due if they get wind of it.  So (from what I interpret from my reading) is that we do the subject to's just hoping the loan company doesn't hear of the assumption (is this even legal?).   But my main question is this - how do you get the coupons for the loan switched over to coming to your home address without that being a clear message to the mortgage company that the loan has been assumed???  Or, if you setup auto draft from a bank account - same question.  And a final question/comment - it sure seems like a settlement with a title company would surely result in something going back to the original mortgage company and flagging the change over.  How do all of these mechanics take place without the loan being called in then?

Thanks in advance

-Jon

There is a general rule I see in a lot of literature, BP and elsewhere called the 70% rule.  It's a guideline but can give a good ballpark.  Also J Scott's flipping book gives a good breakdown of the components that go into why this rule applies.  

Generally, first calculate 70% of ARV and THEN subtract estimated rehab costs. In your case it would be 340,000*.7-7500 = 230,500 as the highest amount you'd want to pay for the property. In short, the 30% is to build in room for both profit and what I call the BHS costs (Buy, Hold, Sell) which can easily be 1/2 the 30%. This is a rule of thumb though and there can be deviations when justified.

I have also found the BP blogs to be a huge source of helpful information.  They are categorized into groups such as Starting Out, Landlording, Flipping, etc.    I like to go to the page that has a dozen or so links and middle mouse each one (for a new tab each) - grab some coffee and start reading.   MAKE SURE to take notes - open Word and log each nugget you come across.  It's helped me build up quite a reference manual.   

Hi Eric

I'm in a similar position and will be closing on my first property on Monday.  However my in-laws have done this for a long time and are coaching me along.  Here are some items I'm aware of for steps between the closing and getting a renter.  

* In the city I'm in you have to get (or transfer from previous owner) a Certificate of Occupancy.  This can require an inspection depending on how long it's been since the last certificate was approved.   The inspection has to be done by the city inspector and in some cases they can demand expensive fixes.  Once this is granted, again in my city you have to register the home as a rental.  

* From there you have to market the property, say on Craigslist

* Then when you show the property it's good to have a rental application and a credit application.  Open an account with someone like realchek.com to do credit reports.

* You'll need to come up with a water tight lease, and if the house was built before 1978 you'll need a lead disclosure form and booklet.  Also you'll need to generate a checklist for them to fill out when they move in.

* Also security deposits cannot mix with your every day bank account, so you'll need an account you can put the security deposit in where it can sit as long as required until the renters move on. 

I'd suggest to read a lot of the Landlord blogs on BP.   

These are what come to mind as of now.  I'll learn more in the coming few weeks.

-Jon Q

Thanks everyone.  @J Scott your flipping book is outstanding & I think I drained an entire highlighter on it :-).  

Hello.  Here's a basic but key question regarding the mechanics of a purchase agreement on a property needing improvements (i.e. flip).  I'm new to flipping and have not built up a track record yet that could be leveraged for securing funding.    

In the case where I find a deal where major improvements will be needed on the property, either through a motivated seller or a wholesaler, I would sign a contract and would have to put down some earnest money.   But what happens if I think I can obtain financing (either through private or hard money) and I cannot secure funding by the time window on the contract runs out.  Wouldn't I lose this deposit?   This seems a relatively high risk.  What are some ways to prevent this risk, besides having several potential private/hm lenders on standby?  Assume the property fits the 70% rule. 

Thanks in advance

-Jon  

Hello. I'm in the midst of closing my first deal and have hit a catch 22 issue. Since this is a buy & hold I'm using traditional financing. The bank requires the property to be insured. However the insurance company will not insure a vacant property (even though it is move in condition). Is there any way to get insurance on SFH without having a lease in place already? thanks in advance. -JQ

Great Info!  

@Jake Thomas    I grew up in Allegan.  Over on the East side now.   Grand Rapids has really taken off in the past couple of decades.  Must be a great area for investing.     

Hello,

   I'm a newbie in Michigan and have done huge amounts of reading on this site and via physical books (love to learn!).  This will be my first post and it's a simple question.  Thanks in advance to those that take their time to answer.  I am interested in getting a real estate agents license for all the described reasons (or at the very least, learning everything I can through the process of getting to and through the exam), and am considering taking it online.  I've found what seems to be a solid site to do so (realestateexpress.com) and this approach would work so much better for my schedule.   My question is, are there drawbacks such as a broker not taking me as seriously as they would someone who took the class live; and/or learning less due to missing class discussions; or other?   Thanks & Regards,

Jon Q