All Forum Posts by: Matt Castle

Until you own it, you can't officially do anything. You can make the seller / current owner do certain things if you structure your purchase contract correctly. Make filing eviction, soft eviction, cash4keys, etc., part of the purchase contract. 

I hope you viewed the unit and knew all of this prior to making your bid so this isn't a surprise. If so, look into your contract escape clauses and either walk or drop your price. 

If it were me, I'd make getting him out and inspecting the unit part of the deal before I would take ownership. I say this b/c if seller isn't going to hold him accountable for the damages, and ownership is transferred, you may be responsible for dealing with him after closing. Meaning, you may have to evict him, report him to local police for destroying your property, taking him to court, collecting or attempting to collect, dealing with him with or without protection around you, etc. These things can get nasty and most people find it very uncomfortable. 

@Lin Chen Look up the area on AirBNB, VRBO, HomeAway, etc., to find the rental rates, how tight occupancy rates might be, etc. Focus on some really nice cabins, then some so-so cabins, to find any differences in vacancy numbers. It's definitely not an exact science, but it's a good data source when little is available. 

Interesting deal. Please post how it turns out and what you eventually did with it (rent, flip, etc). 

You're in the best place possible. Spend some days reading the STR forum here at BP. When you have questions, just ask.

How do you know they're motivated? Unless they put it in the MLS description or agent has their permission to verbally communicate it potential buyers, they're not motivated.

Showings only after offers are accepted is a common practice in a seller's market. I see it once a week, where it used to be once a month. 

Think of it from the seller's point of view: why waste their time, the realtor's time, the tenant's time, etc., on 10+ showings a week. At the very minimum, most investors with tenants in place should require written proof of funds for all cash offers or proof of loan pre-qualification with proof of adequate down payment. 

This way, you don't unnecessarily disturb tenants by weeding out the tire-kickers and looky-loos as much as possible and find the serious buyers who are ready, willing & able to buy the property. 

I'm not trying to be harsh, but the reality is that showings disturb tenant's lives and courteous landlords do that as infrequently as possible.  

But most importantly to your scenario, think how it benefits you -- the buyer! If your competition is weeded out by 90%, the fewer offers you have to compete against!!!!! 

Good question. I'm going to email someone I know hoping for an answer. 

@Jason Graves the lenders I mentioned above generally stick to short term rentals for "no DTI" requirements b/c most of STRs in my area are cash cows (250k-350k buy in @ 35k-60k gross rental income per year).

I might be able to find you a national MFR lender with no DTI metrics, but it would likely be a straight up asset lender at 7% or greater and the down payment requirements are higher.

DM me when you get a chance and shoot me your contact info. If I find a lender, I'll have them contact you. 

My firm uses Matt Grossman in Knoxville. DM me if you need contact info. 

On large deals, anything above 1% is unnecessary IMO. Anything else and you're just asking for trouble of the litigation kind. 

In this case, I'd say the odds of litigation are escalated being that seller wants HIS attorney to hold the funds while negotiating. That's a big red flag to me. Funds should only be transferred as a deposit after negotiations have been made and a binding purchase agreement have been signed by all parties. 

Part of successful negotiations is maneuvering the chess pieces in your favor, or at minimum, for least amount of damage to yourself. 

I would suggest using your own attorney or a neutral third party (a closing attorney / title company) to hold the deposit. 

REMEMBER: you are the one bringing the money. It is you who dictate terms. If they want to control the negotiations and add terms you deem unfavorable... walk.  

@Jordan Santiago 

Couple things I would suggest: 

• Don't waste their time
• Be a serious buyer
• Have the ability to perform (i.e. cash or pre-qualified financing in place)
• Do your own research in addition to what they are doing for you. 
• Don't be lazy. Don't ask them questions like "how close is Property XYZ to the grocery store?" when tools like Gmaps can tell you the answer under 60 seconds. 
• When you don't know something, ask. Don't wait to last minute and say "what? I didn't know I was supposed to do that!" 
• Think a few steps ahead of what you, the buyer, are doing. Don't make her/him wait b/c you didn't do a simple administrative task. 
• Know what you want. Don't change from 400k AirBNB rentals yielding 50k/yr GRI to 50k single family flips after s/he has done weeks of searching and driving around for you.
• If you don't know what you want, simply say you're looking to make some investments and you would like his/her advice on best way(s) to deploy your capital. 

As both an out of state investor and a realtor who works with out of state investors all the time, I have built my share of both relationships. 

The big thing is the ability to complete the transaction. However, once you become a repeat client and s/he knows your word is better than the average investor, and you're making >200k investments with a 3% commission, I'd wager they will go above & beyond the normal call of duty to feed you deals. 

One caveat: a lot of brokers/realtors will be required to disclose all deals by 2020 to eliminate the "off-market" stigma. We're supposed to be clear & transparent, so what is off-market now will likely change for most people in the near future.