All Forum Posts by: Account Closed

@K. Marie P: Im just reading the city ordinace, as laid out on the city's website. I put a link on to the St Louis Park ordinance on page one of this thread. The first paragraph is: 

"In St. Louis Park, Property Maintenance / Point of Sale inspections are required whenever an owner or the owner's agent intends to sell or transfer ownership of a residential, commercial or industrial property. The inspection must be done prior to listing the property. The sale or ownership transfer cannot be completed until the property has been inspected and a Property Maintenance Certificate has been issued. This certificate must be presented to the buyer and title company at the closing." 

I don't know, but I would assume, as it suggests, that closing would not happen without the Property Maintenance Certificate, and it would be held off until someone could proute this certificate. 

Additionally, this thread is making numerous people walk away with the idea that I don't want to being houses up to code, or that I do not like inspectors, neither of which I've stated here, neither of which is true, and I have tried to correct this assumption in my previous post. It seems people aren't bothering reading everything before commenting. 

I just wanted to chat about point-of-sale ordinances and wondered if any other house flippers have been hindered by such ordinances while trying to purchase a flip/rehab/tear down property. 

@Erin Krohn : What if the buyer wanted to tear down the home that was riddled with problems? Why the need to bring it up to code prior to the property changing hands? And who wants to pay for these repairs, knowing the place will be leveled anyway? It's a waste of time and money for buyer and seller (but not for the city, who gets $). That seems to be an issue now with St Louis Park, in part due to their point-of-sale ordinance. Their neighbor, Edina, has tear downs galore and is maintaining their desirability and property values.  Edina has no such ordinance. 

That said, if a city was truly concerned with safety, they'd not specify who needs to fix items that are non-code complaint. So long as the buyers knows of and is willing to fix issues, why would a city care who fixes the issues so long as they get repaired in a timely manner? Seems odd. 

Thanks, everyone. 

To clarify, I'm talking about "point of sale" ordinances - these ordinaces require the SELLER, not buyer, to have an inspection before trying to sell their property, and the SELLER is required to make all repairs that the city deems necessary (in the city I posted about, this can be something like flaking exterior paint) and the seller must have a second inspection to make sure all work deemed necessary to allow a tranfer of title. So, basically, the government will forbid an sale of a property unless the seller fixes everything first. Not all cities have these ordiances, and those that do have them to varying degrees - from those that want to only check sewer lines to those that won't allow a sale unless the entire house is flawless (I'm concerned about the latter). 

Truth In Housing is different and has been around a long while. And, of course, you want homes to be code complaint. Mine end up above and beyond code compliance. My brother is an inspector, so I do not have issues with inspectors, either. Though, to be fair, not all are as competent or as kind as he is. And any such work on my end to fix requires permits and inspections. I am ok with all of that, of course. It's all I know.

What worries me is that I will find that ugly, pink and green house with an outdated kitchen, small rooms, linoleum floors, and carpeting in the bathrooms, but the sellers want $$$$$ for this eyesore because they had to pay for lead abatement for then old, peeling pink paint outside (repainted a new, lead free pink and green) and all new hideous everything, and they hired workers "approved by the city" (ie 3x normal coverage cost of repair). And they think it's lovely! 😄

And, of course, other worries include sellers that are underwater on their home, being asked to dump more $ into it, or people that are selling because they can't afford the home anymore (so how can they afford to bring it up to code?). Many sellers are selling for financial reasons and this seems nonsensical to require a seller ONLY to fix the house. It also seems like it could have the reverse effect of keeping homes up, as homeowners that cannot afford to do so will not be able to sell and will be afraid to try, knowing that the house has issues. So people like us cannot come in and buy the place at a fair price and make the house beautiful. 

I've already encountered similar city ordinances in which it made no sense for me to rehab. For example, a home, fixed up, was worth 200,000 but the city required repairs that would cost 250,000 (and you can only use their city approved contractors, etc which charged a fortune. A lot of pocket lining going on) and the house was listed for 80k. 

My last purchase almost fell through because the sellers removed showers from the bathrooms. Not sure why, but they did. Mind you this house has 5 baths. But because not *every* bath that was supposed to be a 3/4 or full bath was a full or 3/4 bath, they made the seller install showers and baths, deeming the home "uninhabitable" without them. All of them. Almost lost the house over this because the sellers didn't want to deal with remodeling the house. Understandable.

When I read about St Louis Park, MN point of sale ordiance, I found it to be overreaching to say the least. And I can see that this is a thinly disguised way of the city to get $$$ under the guise of public safety (public safety for privately owned property). It greatly infringes on property rights as well. But where do such ordinaces leave us? Let's be honest, we make most of our $ when we buy, and we get the deals because we are the bold ones going into houses that are hot messes. I always have a property inspected before purchasing to get an idea of what I'm getting myself into. I don't need the government looking out for me in this regard. I feel if these ordinaces catch on and get nitpicky, house flipping and rehabbing will become even harder than it already is. 

@Davit Gharibyan: I suppose it varies depending on the city/ordiance, but the city I was reading about (St. Louis Park) said it is required any time the property is transferred and not just listed on the MLS, and that title will not transfer without a certificate showing that you went through this process and your home passed final inspection.

@Mike G. : good to know the city is being flexible about the ordinance! 

Thanks, all. I am from the Minneapolis area and was reading about how one city is thriving and desirable (in part due to school district reputation, in part due to having an affluent reputation, and in part due to the city allowing tear downs without much ado) and mentioned that some neighboring areas might stagnate because of their Point Of Sale ordinances causing less investors and developers to purchase tear-downs that have to be brought up to code first. They even had a video of the process and it seems pretty intense. And, yes, overreaching. The suburb I was reading about is called St. Louis Park http://www.stlouispark.org/property-maintenance/pr... That said, I know that these are a thing in Ohio and here in some parts of CA, too.

@Account Closed : That's interesting. It's difficult to fight such things but I was going to ask a friend at Institute For Justice about it. One of their areas of focus is eminent domain. This is not eminent domain but in the realm of gov't infringing on property rights. My spouse is an attorney and tried to fight a city on mandatory rental inspections, one of the claims was that it didn't give renters the same right to privacy as homeowners, but it didn't fly. I hope these Point Of Sale ordinances don't become a widespread thing...

Anyone else coming across these? Some cities are now forcing sellers to have a city inspection before listing their homes on the market. Anything not up to code needs to be fixed prior to listing the home - in some cities, even if the homeowner decides not to sell, they still need to make all required repairs! I'm wondering if anyone has had to deal with this firsthand from the buyer/investor end and if there are any loopholes so you can buy a home as-is. I'm happy to fix issues myself if it means a better price, but now sellers want premium if they've had to do extensive work, even if the house is outdated cosmetically. 

Thank you, 

M

Weld & Sons Plumbing. They are the BEST and I never have to babysit them. Contractors were harder to find, but I've worked with Weld & Sons countless times and never a bad experience. Ask to speak with ️Don Weld.

At this point I feel I have a 6th sense for purchasing the right flips. It's just you know it when you see if sort of a situation. But here's what I can beat describe what is the basics that go through my head:

1. Location. I know. Cliche. But the better the location, the higher you can go price wise when it's all finished. 

2. Once I've figured out my ideal location, I obsess over the market there. I watch everything that is buying and selling, I go look at everything, I see what solds are and I know the area like the back of my hand. So when I see a deal, I can recognize it immediately and pounce. Honestly, most of my deals are pocket listings, so it helps to know the local realtors, etc as well. But I take my time and am very very choosy. Don't get too hasty in excitement to get started because that can come back to bite you later on. 

3. Lot. Lots cannot be changed. If it's on a busy street, or it's unusually small, or is at the bottom of a sleep hill and gets flooded when it rains, that's a dealbreaker for me. Again, your sales price will be hurt by these things and sellers will get turned off by them, and you can't eliminate the busy street or eyesore power lines or water tower across the st, etc. 

4. The house itself. This is the trickier part and can be specific to where you are looking. For example, I'm working in an area where people will pay much more money for a single story without steps than a two story, even if the two story house is much larger. There are a lot of older people around and they don't want steps. So that was something I looked for, though wouldn't matter as much (or at all) in other areas, or for me, personally. 

If the foundation is messed up, or there's something going on that, yes, I can fix, but it will be on the truth in housing report and will scare people off, that can be a dealbreaker. 

If walls need to be moved and the place is crazy, that's a head scratcher. Getting one with a reasonable layout is ideal, but you might get a better deal in the wonky place and with some creativity get rid of dated/strange distractions without it costing too much. 

If you can see an opportunity to add a legal bedroom, that always a bonus that isn't too much work typically and adds a good amount of value. When I was in the Midwest, a lot of times it just meant adding an egress window! 

Buying the nicest house on the street - the comps will drag the value of yours down. I avoid buying the biggest home in the immediate area. 

Small master bedrooms or master bedrooms without ensuite baths - buyers don't like that. Try to create one or buy a house that already has that. Also, master bedrooms that are right next to other bedrooms, I've noticed, people don't like that either, especially if this is going to be marketed to families with children. They want their space away from the other bedrooms. 

Lack of closet space turns buyers off. 

Can't think of anything else right now, but hope that helps.

-M 

@David Ferrette: Thanks so much for the info. So do I pay for the schematic design? Or is this something that is typically done so we can all be on the same page before they draw up the final plans? I'm just worried that, like you suggested, I'll pay 5 figures for plans that I don't want, and the architect will want more $ for redoing them. Perhaps this is a sign that I haven't found the right person for the job yet...?