All Forum Posts by: Chris Kane

Hey Wayne,

Ive seen an uptick in wholesale deals these past few months in Ada County and picked one up myself in October but there still haven't been a ton to chose from. 

I have a single family rental held in a partnership LLC that my partner and I plan to 1031 into a 4 unit. Our CPA is telling us to keep the property in the LLC for the exchange for taxes but our lender is telling us to transfer title to our personal names so that we can qualify for a 1-4 conventional mortgage. I have completed 1031s in my personal name but never in a partnership LLC. What's the best way to handle this type of transaction to still qualify for a conventional investor loan and not cause issues when filing taxes? I'm sure I'm not the first to do a transaction like this.

Has anyone ever purchased a property where the current landlord starts an eviction process when under contract to purchase? I am 7 days out from closing and the current seller has not completed the eviction they started for one of the units because the tenant has been dodging the processing server. They have now posted a notice of abandonment on the front door of the property since the tenant has been MIA the past 2.5 weeks to but it looks like the eviction is going to carry over past our closing date. The seller has agreed to set up an escrow account to withhold funds to cover the lost rent moving forward. Just wanted anyone who has gone through this to share their experience. 

@Jay Hinrichs I meant to tag you with the question above regarding your small multi/condo construction standards strategy. Can you shed some light on this? 

@Matt R. I agree with you! That is a great strategy for providing multiple exit options. Is the only difference in construction required to build a duplex with condo standards is to run a fire rated wall from the floor up to the roof between the units? Also, is there some sort of special agreement that need to be set up with the property outlining how each owner should split exterior maintenance? I am assuming these duplexes you are building are one off properties that aren't part of a larger community managed under an HOA.

@Fabio Salas this was a duplex built in 2000 in good shape but located in Idaho. If I found a place like this in SD I would jump all over!

hi @Michael Swan,

That is an awesome story of you rei journey so far! Nice work on repositioning your equity to a higher cash flow area. 

This was an out of state deal. I do all my investing in Idaho. There are much better cash flowing properties to be found there. However, this particular deal was strictly an appreciation play at those numbers. I was willing to take zero cash flow in exchange for another property right next to one I own. There are ten properties located together in this part of town that were rezoned a few years back to high density. The city hopes they will be redeveloped into something better.

I recently lost out on a duplex in an up and coming area of town that had 8 offers, including mine, the first day it hit the market. The duplex is located right next to one of my other properties so I have been sending the owner direct mail over the course of the past few years that I want to purchase his property but did not have any luck. When he listed his property on the MLS I jumped at the chance to buy it. The numbers on the duplex are flat out terrible which blew my mind that there are so many investors chasing this deal. Here is how bad they are.

Final selling price $357,000 cash which was $18k over asking and $95,000 more than what the seller paid for the property in 2014 and he made zero improvements to the property.

Rent: $1000 for one side and $1125 for the other with nine months left until each lease expires. After which, market rent per unit would be $1300.

On top of the low rents the landlord paid for electricity and gas for one of the units (no clue why he would do that since each unit is metered separate) plus took care of all the lawn mowing and yard care for both sides. 

Taxes were really high too at $5300/year. 

These numbers were so incredibly bad I couldn't believe that so many people chased this deal! I find it hard to believe that this duplex will be worth another $100k more in 2-3 years. Has the speculation mania hit your market? If so what are you seeing?

I have identified a 6 unit mobile home park sitting on 4 individual lots in a gentrifying area. Lot's of new townhomes and apartments are being built on the surrounding streets. 1,600 sf townhomes are selling for $285,0000. Three of the lots are large enough to do a simple lot split with the city. So the big payout would come from scrapping the mobile homes and building town homes. The lots are zoned for this type of building already. The owner will allow me to scrape and build on one lot at a time while he is financing. 

Any advise or thoughts on this deal would be appreciated. 

The owner will finance on the following terms:

Purchase price - $275,000

Interest Rate - 6%

Terms - 30 year amortization, 10 year balloon

Taxes per year - $3500

Expenses per year - $2,500

Current Monthly Rent - $3,000

Cash Flow $1,250/mo