All Forum Posts by: Joe G.

If you don't smell the gas it might be CO. Do you have CO alarms in your places?

There is a somewhat substantiated theory that many haunted houses (when the folks are mentally stable) are related to carbon monoxide posioning. CO is a product of incomplete combustion, so if there is gas to the house or a fireplace, you might want to have someone called out to take a look. Water heaters are an often overlooked source. Maybe the local fire house will come out and check with their meter. 

If she is complaining also of headaches, has red rosy skin (mostly in face), or increase in fatigue you might want to mitigate a potential law suit. 

Otherwise, give her a tin foil hat and whisper good luck to the kid.

@Kathryn Bowden

When designing a kitchen, we use a Triangle Theory -- that is the sink, stove, and refrigerator should be in an access triangle in order to make food preparation easy. However, since this is a flip I wouldn't leave out a built-in pantry even if it is a small one.

I really like your idea of shortening the closet to keep a pantry and open the area a little more. Have you estimated the cost? Sounds inexpensive if you are doing the work yourself.

Thanks for letting us chime in-

JoeG

@Maira Molina

Disclaimer: I am not a tax advisor. However, I have researched a bit for my own purposes. This is an important point to discuss with your tax advisor.

In short, you can write off many things when you are engaged in business (even as a sole proprietor), however there are implications to your  income if you may leave the "passive investor" status and move into the "active investor" status. At that point in time, your income can be taxed differently. 

Good Luck!

Licensed agent, investor, and managing member of Skipjack REI. Skipjack REI is a new firm that is working to build several portfolios based on current and emerging statistical trends. We focus primarily on 12-150 units that are C+ in B neighborhoods that were built in 1970 or newer. In addition, we prefer the local median income to be $36,000 or more while the poverty level is to be less than 15%. No flood zones, no crazy crime areas. Please forward all deals that meet this criteria. Disclosure: principal is Maryland licensed agent.

@Rebecca Cramer

Many hard money lenders are looking for folks to have money in the deal, which it sounds like you would like to have money in the renovation. A HML is likely to see that as a plus, so if you factor the capital cost into the deal and it works for you -- HML might be the way to go. The only issue is a traditional refi likes to see some seasoning or a local management company in place for a vacation area (and maybe some reserves for the off season).

How are you planning to handle the turn over of the Airbnb? Who locally is going to be there in the 4 or 5 hour window to clean, redress, restock, and report any issues? How reliable will they be as you will be giving refunds and free nights if the place isn't turned over?

Ocean City is ripe for utilizing a local management company like Shoreline Properties (I have no relationship with them other than renting from them) that have all of the services in place. Yes, the margins are a little less than being very hands on with an Airbnb, but they handle thousands of properties probably just like the one you are looking for. 

Good Luck Rebecca!

@Bruce Harding

It is all about the math Bruce. Run the numbers and make sure it will meet your goals with the roof replacement costs. Remember you can likely finance the roof purchase if needed at a low rate at a local vendor. Also, remember that the replacement roof has some tax advantages to the owners as well.

With that said, get estimates and professional proof (from a contractor) that the roof will need the repairs and present them to the seller with the fact that you want to move forward, but you need a discount for the roof. Anything over the cost of the capital to pay for the new roof is likely to work if the deal works now due to the tax advantages. 

Good Luck!

@Account Closed

Josh, you might benefit from researching the Maryland Mortgage Program. This is basically free money for attending a few classes that you will benefit from any way. Check it out and see if you are eligible for the grant programs. 

http://mmp.maryland.gov/pages/default.aspx

If the deal makes sense and meets your goals (CoC, cash flow, etc...) you should make the purchase. You should ask for the leases and read them to see what exactly you are inheriting to better understand what you are on the hook for.

As far as the past due rent, not sure why the owners think that you should be on the hook for them not enforcing a lease agreement properly, but maybe you can make a deal with them that passes on the $200 per month as long as he pays it. 

If you do re-sign this tenant with the $200 as part of the terms of the lease - this will be reflected as a loss of $200 per income each month when fully repaid on your books. Anyone looking at your books might want to know why you suddenly decreased that units rent by $200 per month. 

Either way -- I suggest you read the individual leases (not just one as they may be substantially different) to see how you can be in a position to get rid of the chronically past due if needed as well as frame for a future need of getting rid of the gentleman who is "getting back on his feet" in the event that he stumbles again.

Good luck!

@Jeremy Smith I am sure of your local laws, but here in Maryland a loved one can transfer a property for the consideration of love and affection. However, there are many tax implications for transactions such as these so it is best to pay a CPA that specializes in real estate for an hour of time. As long as you pick the right CPA, the advice will be worth the cost. It also has tax implications on your grandmother as well. For instance, I had a family friend that gifted their home then had a sudden illness that required long term nursing home care. When calculating the patient's eligibility for medical assistance, they included the worth of the home and the patient was forced to pay more out of pocket each month.

I offer some advice from my personal life - don't put this off. Make sure your grandmother is informed along the process and is in agreement and your family knows her wishes.

@Carl Pickens I asked a seasoned lender a few years ago when I was doing a proforma for a property. There are conventional products that will leverage all of the housing units on the property. In my case, two off the buildings were newer and one (it was a duplex) was built in the 1920's and updated but not to code. So my deal feel through. Do you have a relationship with a small local bank that will keep something like this on portfolio? If you have 20-30% of equity in the place -- that might be a good solution for you.