All Forum Posts by: Kati Stratos

Hello! I found a great off-market opportunity with an eager seller and would love help thinking through the best way to structure this deal.

 Property: A beach-block 4 unit multifamily at the Jersey Shore valued around $850. The seller wants to keep his unit but is sick of being a landlord for the other 3 units. 

Deal: The idea we've mutually come to is that I would purchase the property from him for $650k and convert it to condos, and then sell his unit back to him for $1. I've spoken with a lawyer and am not intimidated by the condo conversion process, which seems intense but fairly strait-forward. 

Question(s): How should I structure this deal? What happens (legally) with the sellers unit if condo conversion doesn't go through (for whatever reason). From what I've read, one option is to purchase the property as Tenancy in Common (TIC) with 25% ownership to the seller, 75% ownership to me. From what I'm reading, it's hard to get a lender for a TIC. Also, how would the refinance work after conversion? At least 2 units (sellers and mine) would most likely be owner occupied, though not as primary residence (as vacation home) - would that complicate anything down the line? The remaining 2 units I would plan to either sell or keep as vacation rentals (its a huge vacation market and I own/manage other AirBnBs in the area) - am I allowed to keep more than 1 unit after condo conversion?

I'm looking for someone who has some experience with this and could help me think through options, landmines, creative ideas, etc. I'm not sure if I should start the conversation with a lender, a lawyer, a developer, my broker (I'm a licensed agent), etc. so I'm starting here! 

Thanks so much in advance.

-Kati

Good morning everyone. I am looking for a reliable handyman who can support small to mid-sized projects at my short-term rental properties. Tasks include replacing smoke alarms, window screens, mounting TVs, assembling furniture... light carpentry and/or painting skills are a plus. Please let me know if you have anyone to recommend. Thank you! - Kati

Hi BP fam,

Does anyone have a landlord insurance policy that covers loss of income due to flooding? My general policy covers loss of business income but not if due to flooding (as expected). My flood insurance policy covers property damage but doesn’t cover loss of business income. 

What are my options if I want my business income protected in the event of flood damage?

(Please no snarky comments like ‘don’t invest in a flood zone’, I don’t find those helpful)

Thank you! :)

-Kati

Hi friends. Does anyone have a lead on a good STR property manager in Ventnor NJ? We have been using Superhost for the first month or two but are not very happy with them. Thank you!

Ton of credit to you for your success and for putting your idea out there. I second what @David Bergmann mentioned. 

I just hired a property management company for an out-of-state STR I closed on last week. The company (before I even signed the agreement and paid them anything) sent me a list of all of the items needed to initially furnish the place (everything from furniture to number of towels, kitchen items, etc.) and also has an optional service where they will do all the buying, designing and furnishing for you (at a reasonable markup). This is definitely attractive to me as an out-of-state STR owner. I like that they give the option to pay by the room. So for example I think I'm going to furnish the bedrooms myself because I have a good eye for design and can get furniture for less than their markup, but I'll pay them to equip the kitchen, because I don't want to spend time running around buying spoons and toasters.

I like your idea of the price sourced links. My concern would be that, in search of the best price, would I then be buying items from a dozen different online stores? (Like if Amazon has cheapest silverware, wayfair for furnishings, bestbuy for tv, etc.) That would get annoying for me. BUT if you could somehow build it so I could add all of your recommendations to my cart with a single click and check out once (rather than enter my cc info on a bunch of different sites), then WOW that would be huge and I’d definitely use it and see tremendous value in that

Hope this helps. I feel like I’d be close to your target customer so I’d be happy to talk more and kick ideas around if helpful :) Best of luck!

Thanks @Wayne Brooks!

Great question @Rich O'Neill, thanks for looking out. Checked the contract which states “in the event the seller refuses to cooperate in filing the grant application, title company shall be authorized to use the escrow monies to institute legal action against seller to compel his cooperation or in the alternative file the grant application without seller with any resultant increase in grant cost to be charged to the seller”

Great point @Bob Reinhard. No pushback from seller. They have put a chunk of money in escrow and are required to apply for and receive the riparian grant from the state after closing (which may take up to 2 years). Title company escrowed 2x the anticipated amount needed, so the incentive to the seller to actually follow through is to get the balance of their money back (about $8k), but the contract also states that if the seller does not pursue the riparian grant for whatever reason, the title company can use the excess escrowed money to legally enforce them to do so.

I feel okay about it, I think, as this seems fairly common in this part of NJ, but any other red flags here I might be missing?

My contracted closing date is tomorrow, March 18. Closing time hasn’t been scheduled yet, because we are awaiting documents that have been overnighted by the seller (who lives in CO) and are expected to arrive by 11am tomorrow. I also live out of state and 2.5 hours from closing location. I’m being told to come between 1-3:30 for closing, after the documents are expected to have arrived.

I’m a bit annoyed that this is so down to the wire. I really don’t want to drive 2.5 hours until documents have been confirmed received. I’m advocating that I need 24 hours notice of closing time, scheduled once all documents have been received. If this delays closing by a few days, so be it.

Am I being unreasonable? Seller is complaining that they will have met their obligations to close by the contracted date and therefore we must close tomorrow. They don’t want to pay a couple days holding costs, which I get. But as far as I’m concerned, they haven’t met obligations until all docs are in, and when they are in, I’ll then arrange to drive down the following day for closing.  It would be different if I wasn’t out of state, didn’t have to arrange for childcare, etc.

Thoughts? Or if this was reddit, AITA? :) Thank you!

Hi @Rich O'Neill, thank you for the thoughtful reply and for the advise about the title policy not taking "exclusion" to this. I'm going to check on that tomorrow. The sellers agent is working on getting a survey in time for closing, but he's having trouble and looks like we'll be delayed at least a few days or weeks, but hopefully not more. So far, seller doesn't seem to be pushing back at all, or trying to pass any of the burden to me. I will report back on how this all shakes out, thanks for your interest.