All Forum Posts by: Kim Knox

Wow, I am sorry to hear that!  I believe Commercial property is exempt from disclosure law.  

Was the property listed? If so, in the MLS listing details, did it indicate a sprinkler system?

Were you represented by a Realtor in this transaction? Was the Seller?   

I have never had a home inspector have a sprinkler system as part of their inspection, so I don't find it surprising that it is not part of your report.  Many Inspector contracts indicate that their maximum liability is the cost of the inspection itself.  The report also indicates the limitations, which generally include sprinkler systems. 

@Rob Barry

Yikes! What pigs! My curiosity is peaked when you indicate Bad Dude moved in, indicating she had 5 dependents on her original lease. Was he added to the lease? Was he approved by the property management company, and what do they do (run credit and background check?). Also, did HUD approve the additional occupant (crackhead), and what was involved in that approval? When is the last time HUD inspected the property?

Do what you can to remove all of the people from HUDS approved list, do it for fellow landlords.  She is not a victim here, she is the person you (your property manager) trusted with your investment.  Also, what kind of person leaves a sick doggy to fend for themselves!!!  Additionally, property managers have been handling walkthroughs virtually, so his excuse doesn't hold water.  There is an app, that is much like facetime, which allows the property manager to have a live walkthrough.  

I think most everyone gets nervous, you are not alone.  

A great way to make money outside of your profession is related to the tax exclusion of gain that may be applicable for owner-occupied homes. Scroll down to  "Does Your Home Sale Qualify for the Exclusion of Gain" to see what i am talking about.  This is a beautiful gift from the government! 
https://www.irs.gov/publications/p523#en_US_2019_publink100073096

 A 50% debt to income ratio is typically not worthy of getting a home loan, so that sparks my curiosity.  Ask yourself about how much money you currently pay in rent.  If it is near $1500, it might be smart to move forward. Also, If you have 3 bedrooms, you could potentially rent out a room to a fellow grad student or two.

Good luck!  

@Richard Singh it seems to me that the Seller lied to the Agent and the Attorney when asked, OR I suspect he/she simply didn't know any better, but perhaps they did. There are contracts between tenant and seller, and tenant and HUD. Hud does a yearly inspection, but they don't provide Seller with updates contracts, so it is not unreasonable that Seller may not understand that lease period extended. I am a Realtor, but I only know this because I am a landlord and have one rental that is section 8. I would expect a property manager to know section 8 doesn't go month to month, but not a Realtor. However, the fact that a contingency of sale is to review the obligation to HUD is a small indicator that they did not have access to these contracts, or that they wanted you to discuss with HUD as the Potential Buyer.

Depending on your contract, you might be able to ask Seller to contribute towards your closing costs and keep the price the same, this is a minor change that a lender can process pretty quickly. Obviously, ask your lender. You have found out something unfavorable, which was the whole point of your personally verifying contracts.

@Mike Cumbie Thank you. :)

@Richard Singh

Section 8 is tricky, and YOU should call them directly specific to this purchase. Ask them 1. If they have done a rental valuation recently, as you are limited to keep within a certain percentage of the market value rents. 2. Are you obligated to continue to lease? (I think in the 1st year, yes. Perhaps the next year it could be different). Don’t blame your Realtor or the attorney, section 8 would likely need the Seller to request contracts). You might have to get a letter of authorization for such questions to be answered. You might have to extend your diligence period to satisfy your questions.

Tell Section 8 your plans and tell them your belief that it is under market rent by $800 a month, that is the best way to get the info you need to make a smart decision. Otherwise, depending on competition, you might be able to split some of the rental loss with the seller, in light of your discoveries. That is, if you made these things a part of your due diligence in your purchase contract.

@Aaron Almquist I pay what they charge but I require they notify me of any expenses, so I can decide to have them do it or my contractor. In my opinion, it is repairs that landlords are most vulnerable to property management companies.

@Nate Marshall Oakland California just voted to ban criminal background checks on Tenants. :) I am not kidding, this is an actual thing! Landlords are sitting ducks.

$15k profit while risking $187k+ is way too thin. :(

Great topic!  As an agent, I am happy to present offers to my Sellers.  I have had some wacky ones over the years.  :)

If a Buyer wanted a 2%-3% rebate from my commission because they claimed to require nothing from me, I would decline. You would be surprised to hear how difficult some buyers who require “nothing” morph into.  Taking twice the liability for half the pay is a silly practice, but i see many agents learning these lessons. If I am not representing a buyer, I am still neck deep in their transaction to make sure my Seller can expect a smooth closing.  It is my responsibility to make sure my client has a comfortable-ish transaction.  I do the same when working with a Buyer’s Agent, BTW. 

Many of my clients are very savvy and use me on deals they have procured.  Why?  We have a reciprocal business relationship.  I make them  money, they make me money.  

 If the Buyer indicates they will hire a Buyers Agent, I would prefer they be represented, I would not view it as a threat at all.  If they are reducing the net to my seller by the same amount of the “saved” commission, it does not financially benefit my Seller to accept with a non-represented party.  

If two offers, resulting in the same net are offered, one by  Buyers Agent, one by a Buyer seeking a rebate, the choice is clear. 
 On foreclosures, I can say that Banks are not attracted to non-represented Buyers, they view it as an additional liability.  To me, this appears true in all transaction types. I have had the pleasure of working with a few self-represented buyers that were exceptional. 

I have been “offered” these types of opportunities from Buyers many times.  In my State, we are not allowed to offer rebates, but that is not why I don’t work that way, so I hesitate to mention it, but thought it was useful enough to make a note of it.