All Forum Posts by: Michael D.

Two options to consider:

- Buy half (or less) of one of the homes for a small discount. If one of them is on the market for $40k, offer to buy half for $15-17k. This is cleanest, gives him liquidity, and spreads out his risk in case it doesn't sell for full price. On the off-chance he can sell it for more, you both share in that. He can just add you to the title, or you can even just keep it off the record if you trust him well.

- Write a 50% mortgage on one of them.

For multi-family, you should expect to inherit tenants. In fact, that's generally the POINT of buying multi-family. You aren't buying land and building so much as buying a collection of leases and expenses (usually). In fact, buying troubled leases can be great if you buy them for the right price and have the stomach to deal with it properly.

For single-family it can go either way. If you plan to hold, you should want to inherit good tenants, but as others have mentioned you need to do enough due-diligence to ensure that you aren't buying a major problem. If you plan to re-sell then a tenant might make that harder.

@Khadijah Bell , I'm buy-and-holder in Pittsburgh, so feel free to reach out if you've got any interesting deals or otherwise would like to talk.

@Phil James , you are jumping way ahead of yourself in your thinking.

The first thing you need to do is figure out what the property should realistically net, without having one bad tenant after another. How is it that a $96k property with a mortgage on it is supposed to cash-flow $800/mo in the first place? Give us the rental amount, mortgage balance and terms and we can help you with this.

Then, consider your other income and financial goals. Is this place putting your own home in jeopardy? Are you funneling 20% of your monthly income into it? Or do you make $250,000 and this is just a side project? Do you own any other rentals? Do you want to?

Finally, my guess is that the biggest problem with the property is YOU. If you think it should be $800 positive and you're WAY off, then maybe it's only supposed to cash-flow $200 really - which you happily pay to a competant manager and come out even.

I've used agents for these and they usually just remind me of their minimum commission, which I have to make up if the percentage doesn't cover it. I'm fine with that.

You can quit-claim it over, but note that this may trigger a due-on-sale clause in your mortgage if you have one.

Michael

Yeah, that sounds painful to me as well. Can you put in a long driveway up to the house?

Albert Einstein and Neils Bohr were out hiking one day when they came across a bear. Immediately, Borh began to change from his boots to his running shoes.

“What are doing Niels?” Exclaimed the surprised Einstein. “Certainly you cannot outrun a bear!”
To which Borh replied “No, Albert, I only need to outrun you...”

Additional data points: Our prior usage ranges from 600 (Aug) to 1200 (Feb), but I'm sure our usage in the new place will go up substantially: We didn't have AC before, now we will. The house is twice the sqft, and there will be two other adults living with us that weren't before.

Michael

I'm also trying to consider whether they will add value beyond mere ROI by making the house worth more.