All Forum Posts by: Tim Silvers

The way I interpret the following policy clause is that so long as the property is defined as other than "VACANT" which is the case when the property is being "constructed, altered or repaired", the 30-day time period and vacant status does not apply in this instance:

We do not insure any loss at your premises if your dwelling has been vacant for more than 30 consecutive days immediately before the loss and the declaration page indicates an occupancy other than “VACANT“. This 30 day period begins on or after the original inception date of the policy. A dwelling while being constructed, altered, or repaired is not considered vacant. For purposes of this paragraph only, if the date that the loss occurred is not known, then the date of discovery will be the date of loss.

So, if a loss occurs while the property is being repaired or renovated, coverage would apply, correct?

Am I wrong? 

Quote from @Thomas Rutkowski:

Seller sells to an irrevocable trust on a 30-year installment sales contract. Trust sells to buyer for cash. Trust invests the cash to make the payments on the installment sale to the seller. In 30 years the balloon payment is due to the seller and that's when the taxes are due.

Coupling a monetization loan to an installment sale accomplishes the same thing but puts cash in the sellers hands that can be re-invested. I think THIS can be better than a 1031 exchange because the seller will start off with a fresh depreciation schedule in the new property. That immediate tax savings in the new property is better than the infinite tax deferral of the 1031 exchange.

Some questions:

1) why use an irrevocable trust?
2) wouldn't the interest be taxable to seller?
3) can the seller refinance or extend the terms of the contract?
4) would this also work to defer gains on fix and flips?

Would a DST work to defer taxes on ordinary income from say flipping properties and using the trust to invest in more properties? Can you borrow against it?

Quote from @Michael Quarles:

Don’t you just love the “other” write-in? 
and the do you know if write-in? 

I always go overboard on TDSs    Hell I even give the one I got from my seller.  

I would rather find out in 16 days they aren’t a buyer in stead of 60.  

Yeah, I suppose it could be subject to debate. But I would argue that the section "other" appears is for specific appliance issues since the header at the top of that section states, "Systems / Appliances: Are you aware of any problems and/or defects with any of the following:"

I agree with your last comment. Even though I'd probably win on a legal argument for no requirement to disclose, the buyer could get cold feet at the 11th hour.

Nope. Here's ours:

https://red.nv.gov/uploadedFiles/rednvgov/Content/Forms/547....

Our SRPD has no section in it which specifically asks if the seller has knowledge there was past fire damage (unlike for mold) to the property, however, the buyer's inspection revealed burned wood that had been sprayed in the attic. This led to the buyer's agent asking why this was not disclosed in the SRPD. After a lengthy and extensive renovation, the property is in near stellar condition. I offered a credit to the buyer to repair the attic. Everything was reinforced with extra beams, so we just didn't make it look pretty since it's in the attic. Thus, it's more of a cosmetic repair, if anything.  There are no other safety concerns or visible signs of the fire left intact. That being said, is there any legal requirement to disclose there was a fire with a prior owner at some point?
 

Just got quoted $3500 for labor only for replacing the cast-iron pipes and replacing them with 40' ABS/PVC. Does that sound reasonable? Anyone know the cost of the pipes?

Quote from @Bill B.:

Did your inspector miss this? You should have gotten the same discount when you purchased the property. Personally I’d be mad at your inspector and hire thsi buyers inspector from now on.

Prior knowledge of this would not have mattered in the grand scheme since the seller would not have discounted the price any further. Believe me, I made every effort. I maybe would've shaved off $5-10K extra in reno is all that I could've done. Well, now it looks like I'm going to pay for that extra anyways.

Quote from @Bruce Woodruff:

As a long-time Contractor, Investor, Home Inspector, and more, here is my take....

Those pipes are past their 'expected life span'. Period. Any potential buyer with an IQ above 50 will insist that these are replaced or they are given a credit. 

This can be a huge expense. I would say about $8k average, sometimes reaching towards $20k depending on length of run and the difficulty of tie-in to the City main.

I would not, as a buyer, wnat to take a chance on this..even if they are working well now, it is a ticking time bomb and a large expense.

So I would wrap your head around the concept of offering a credit towards this item. Just my $0.02

Appreciate the lowdown. I am getting my own inspection done to see exactly what I'm up against in order to evaluate. 

Quote from @Bill B.:

Ps. Their inspection contingency is still valid a week from closing? It should have been 5-10 days long starting when you accepted their earnest money. NEVER do that again. That’s a really poorly written contract, you might need a new realtor too. I’d get 2 professional quotes in writing (pay for them if needed.Use those figures to come to an agreement. Figure out if you’ll get another offer near your current one. (Has your realtor been taking back up offers or is there zero interest?) then calculate 203 months of holding costs and the lower offe you’ll have to accept if you have gotten no backup offers. 

DD: 12 days following acceptance of RPA to complete due diligence (expired 09/03).
In addition to accepting $40K less than ask, I forgot to mention that I already gave the buyer $5K toward cc.
SOL on backups at this time even though we left it on the MLS to show while under contract.

 48 DOM.