All Forum Posts by: Eric S.

I am buying triplex and separate parcel lot that is next to it all from the same owner. The empty parcel lot is next to the house. I am thinking of either selling the lot as is or eventually like to build on it and sell the house or possibly rent it out. Currently is just being used as extra parking for the 3 unit building next to it. I have never bought a blank lot before and I know there is a lot of language that can be added to standard Ohio contract to ensure just not buying useless piece of land such as it is zoned correctly, soil is good, able to get parking variances etc. I am putting in offer quickly and using the inspection period of the house to do my due diligence. 

What things would you absolutely recommend I have in the contract?

What things are good to have in the contract?

Also any other useful information to know about buying land or parcels without buildings. 

Even if I do not get this deal I would like to learn and educate myself more on buying land and things to look and look out for. Thanks and Cheers!

Thanks for the input. How have you structured deals to get seller subsidy back? I'm curious to

Any tips or techniques you have used. Thanks!

I can understand if your paying cash it wouldn't matter. But if you were financing wouldn't you always want it to applied to the amount need to bring to closing. Because that will increase the amount you have to apply towards another down payment. If you just got price reduction it would only lower your monthly payment by small amount and amount you need bring to turntable small amount. Thanks!

I am currently in contract for 2 unit at 300k with 4k closing costs. . Each unit rents out for $1550 currently. Taxes are $3300 a year. Everything is good appraisal came back good. Only thing we are going back and forth was remedy of items that came up during the inspection report. We finally agreed that 10k was good number. Was personally less than I wanted, but since I already have leases signed for 2016-2017 school year at 2k a piece, I just wanted to get the deal done. 

Usually when I have done deals the seller just reduces the cost of the property in this case by 10k, but instead I am getting a credit towards what I need to bring which is 15%. This great because I can keep more cash in my pocket. Also it was mentioned that I could do POC and get check outside of closing, but don't want do that becasue of tax implications. When I talked to my bank (smaller local investor friendly bank that writes their own guidelines) they had no problem with this.

My questions is 

1) Why would the seller choose this? Is it keep the sell amount as high as possible/

2) I don't quite understand how this is possible. I have been ensured that it is by multiple people. Bank, Title, Realtor, but still don't have a clear explanation so leads me to be a little hesitant as I don't clearly understand how this works exactly and the motivation why the seller wants it this way.

3) If this is legit. I would want structure more deals like this if I am financing. Instead of reducing the price receive the credit towards what I need to bring to the table. 

Thanks for everyones help.

Cheers!

I am looking to purchase 2/3 unit home. It is in good area. The main house is about 1200 square feet and is technically 2 units. There is 2 bedroom 1 bathroom on first floor that is also zoned for commercial to be used as offices for business. There is stairwell that can be sealed off that leads to studio space with its own fire exit steel stairwell. 

Now there is back carriage house that is about 600 square feet with 1 bedroom and 1 bathroom. 

Updated units in the area rent for $800 conservative. Apartment complexes across the street where there are little bigger rent for 1,050  a month for one bedroom. 2 bedroom rent conservatively I am thinking of $1200. Studio think I could rent for $600 conservatively.

I am thinking of living in one of the units and using fha 203k loan also thinking of the doing rehab investor loan with 15% down. List Price is 175k. I have not had contractors bid on it, on to that later.  I am thinking on high end of $50 dollar square foot rehab would be about 90k so all in about 265 I am thinking . Property taxes are low at 3k a year. Homes in the area that sold recently are selling for $150-180 per square feet. Most are single family homes though not many duplexes that have sold recently. 

Now my questions

What is the best way to submit and offer to give me maximum time to close and allow me options to get out. 

Reason why I say this FHA can take a long time and I do not know exactly costs to do the project. Also seems like its pulling teeth to find contractor properly bid this out ( I know this is still part of busy time of the year).

Also what is best way to get contractors to bid and to speed up bid process. Another reason why I want as long as possible becasue contractors for project like this can take couple weeks to get bid back and I want submit offer asap for this. 

I tried to do FHA loan on another duplex earlier part of the summer reached out over 10 contractors and maybe 5 came out and only 2-3 actually got bids which were high ( I am thinking all of them were busy). I ended up scraping that deal because costs were too high for what I want do.

I am use to being my own GC and bidding things out and overseeing most of my stuff is light rehab. But with a loan I have to use licensed GC which is fine but i know costs will be much more and although its my loan not technically the boss. Easier get electrician and HVAC guy I know to bid out project and cut out middle man than to have GC contact all these different people for bid if you catch what I am throwing. 

Also another reason want buy some time is to look at other banks. I have preapproval for 203k from bank but after really realizing in experience with inexperience with 203k loans I am hesitant as well as the fees they are charging. They use service that they outsource the 203k part out. 

Well here it is. Let me know your advice and what you think of the situation. Thanks!

Cheers!

Thanks everyone really appreciate it! Makes since now. Thanks!

As far as I know you can. I identified 3 properties but was only closing on one as I knew I wouldn't have enough money to close on multiple. I suggest choose multiple and if doesn't work it doesn't at least you have the option. 

Question  I will have about 22k left over from my 1031 that I will either receive back and pay 15% taxes on. I owned the previous house for more than 1 year so that's why capital gains tax is that much in Ohio according to my accountant. or should I pay apply it to the principal mortgage and have further equity I can borrow against. The house appraised for 315k and I bought it for 270k so already have 45k in equity.

I will pay$3300 in taxes but will have freedom to either renovate other properties, use as down payment or whatever. On other hand if I use it to pay down principal I will have further equity but I figured if I cash out refinance to use on another house I will pay at least couple thousand in closing costs, title, origination fee, etc. I know the conventional is apply as much as I can towards principal so I pay no taxes on my 1031 money, but my question is is worth to spend extra 1k or so to have freedom to do whatever. If I apply it to principal its locked in and I will have to refinance to access it, but I know its nice to have extra 20k to do whatever with and don't need to ask anyone else for it. Thanks!

Hello All.

I am buying 2 unit investment property. I am reviewing my HUD statement and last 9 months taxes, security deposit for both sides, and prorated rent is in 200 section and is being applied to the loan which I am taking.

My questions. I was told because I am using 1031 exchange money for this property that I can not receive any money back after closing or if I did it would go back to the 1031 company then it would be disbursed back to me and I will have to pay taxes on it.

Because of this they are applying the security deposit to the principal because I can not receive any money back and it is in the purchase contract that I receive the deposit. My title company said because it is in the contract she has to put it on the HUD it is the only way to guarantee to get the money. We could do a side addendum and remove it from the HUD but i feel there has to be another way. That it could stay in purchase contract not go on the HUD and receive the deposit check at closing from the seller. I talked to my accountant and he said per Ohio law that technically we are not allowed to have it on the HUD and be payed towards the loan amount I am taken because it is the not the sellers money or mine it is the tenants until they move out.

Is my title company wrong in saying that the purchase contract has to be changed and security deposit removed from the contract or if not she is obligated to put it on the HUD as it is the only way to guarantee the money?

Also unrelated after the down payment I will have about 22k left over from my 1031 that I will either receive back and pay 15% taxes on. I owned the previous house for more than 1 year so that's why capital gains tax is that much in Ohio according to my accountant.  or should I pay apply it to the principal mortgage and have further equity I can borrow against. The house appraised for 315k and I bought it for 270k so already have 45k in equity. 

I will pay$3300 in taxes but will have freedom to either renovate other properties, use as down payment or whatever. On other hand if I use it to pay down principal I will have further equity but I figured if I cash out refinance to use on another house I will pay at least couple thousand in closing costs, title, origination fee, etc. So I guess is it worth to save 1k or spend pay that to have more freedom.  Thanks all!