All Forum Posts by: Lisa S.

Wait on the attorney until you have a property under contract. But first, see if the deal is complex enough to even warrant the assistance of an attorney. Is it standard to close with an attorney in your state? That's what you should look into at this time.

An attorney can help wtih at least two things I can think of, reviewing leases and coming up with an asset protection plan. If the tenants are on leases with a property management company, the leases are probably reasonably solid but it would still be a good idea to review them. If you're buying from an owner/manager, you will definitely need to get the leases reviewed by an attorney. Once you're under contract and the due diligence period has passed, meet with an attorney about asset protection.

But no need for an attorney right now.

I guess the methplex deal is not dead yet. After two weeks the seller wants to rekindle our previous contract and give us all the reductions we asked for in our do-or-die counteroffer. They are going to do the meth remediation themselves and then we can buy a clean building, so we're reconsidering the methplex now.

However, another buyer went through it during the last two weeks and rejected it. I want to see a copy of that inspection report. Anything else I should be looking out for during this time? Any extra ways to squeeze the seller at this point?

I've become a fan of this forum and started answering questions, too, thanks for being there, bigger pockets.

I like your thinking. It sounds like you've secured financing, good for you. I don't know about the 203k loan, but I have some thoughts about house vs. duplex. Buying a house and renting to roommates so you have free housing would be much more simple than buying a duplex. With traditional tenants and a duplex, you must learn a lot very quickly, you have legal exposure, must be on point when they ask you for repairs, and living next door to them, with no prior experience managing tenants, is going to be stressful at times, even with a property manager. Depending on your tenants and other factors you'll either sink or swim. You sound intelligent and motivated and will likely swim. But the house with roommates is the lesser risk which still provides many of the benefits. Go for the house, get the duplex later as your second investment, that's my advice. Tenants can be difficult. Save that for later after you have a bit of experience. And don't feel bad about charging your roommate market rent. You're an investor taking on the risk of owning something, your friend can move out at any time. Your situations are different.

Yes, try to work this out with the tenant, perhaps running the dehumidifier will fix the issue.

But, sometimes a tenant insists they just need to get out of a lease, for whatever reason. Get notice in writing if they intend to vacate. Advertise your rental and find another qualified tenant. Until the new tenant moves in, though, the current tenant, who intends to leave, is responsible for all the lease terms. Wait to return the security deposit until the new renter is in. Work hard to fill the vacancy. The tenant wants out, and you're willing to help with that, but not lose money because they changed their mind. You will fill the vacancy but until it is filled they are responsible for the lease terms. 

This is a pain because you have to spend more time finding another tenant, but at least your costs are covered in the meantime. Let us know how it works out.

The deadline expired and we are NOT the new owners of the meth-plex. We are sort of relieved, actually. This wasn't feeling right. In addition to the big problems mentioned, there is also a brand new tenant who just moved in on a "no pets" lease, and with her brought a fun surprise - a huge emotionally supportive PITBULL who loves to bark.

I asked for a 35K price reduction on this hot mess of a fourplex and gave em the 'do or die'. I'll report back with what happens.

Thanks for your input, @Thomas S. I agree owner pays utilities is a bad deal. We hoped to install separate electrical meters to fix this issue. I searched google and couldn't figure it out, what does "DB" mean? Thanks for your help.

Thanks again for your advice, @Steve Theobald, this is gold. Due diligence deadline is Monday. I have solid, detailed quotes from professionals for about $15,000 worth of work. I like the do or die clause. I have also started to look at single family homes as investments instead, some do cashflow with 25% down and would be easier than dealing with the fourplex.

Owner pays all utilities on four-plex, and assuming a 3% vacancy rate (which is what the seller reported)) we have a 5% cap rate.

The SFH is sounding better and better.

Thanks for your detailed reply, @Steve Theobald. I did the testing myself so it sounds like we could clean the two units for under $10K. Our purchase contract says "as-is", but I'm going to submit a list of items and quotes anyway. I am working on rounding up all the quotes now.

Sorry to jump the forum like this with no history here, but I'm desperate for advice.

I'm under contract to buy a fourplex in salt lake city (hot market), and the inspections have been a little nightmarish. I can still get out, and am wondering if I should.

-One unit is above legal limits for meth and needs remediation. Another unit is borderline.

-Built in 1915, very old wiring in attic ($5,000+ to fix)

-150 square foot addition not on foundation ($5,000+ to fix)

-Portion of sewer line underwater, found by using a camera to inspect the line (? to fix)

Should I walk away or negotiate? How much of a discount should I get?

Thanks in advance!