All Forum Posts by: Michael Fundaro

@Wayne Brooks to be honest, I say with some shame that I'm just curious if I have a valid case and can get something out of them for my trouble.

@Ryan Cerpa Thanks for the insight, it would be worth looking into what regulations our set on our provider

@Michael Plante thanks, that is certainly what we are doing.  Just figured it can't hurt get an outside perspective.

I am just about finished going through a roughly 2 year debacle with the local water company here (MDC).  The story has a lot of moving parts so forgive me if it gets confusing, I know I was confused as this all unraveled.

Summary:

My girlfriend and I own a duplex whose water service has been terminated because MDC mishandled a billing issue with the previous owner of the property at the time of the sale to us. The case was being dragged on in court, all the while we were receiving harassing notices stating service would be terminated and a lien would be placed on our property. After our attorney said a 'standing agreement' was made with MDC to keep service on until the case was settled, we were told to ignore these notices. They kept coming, and yesterday service was terminated, leaving us and our tenants without water. When we called the MDC about this termination, we were met with a condescending, and rude attitude. And now we are jumping through bureaucratic hoops to return service to our property.

Details:

We closed in December, 2015.  At the time of closing, the seller was "up to date" on her MDC account.  We purchased title insurance, and no outstanding balance or lien on the property showed up in our title search. We were then told to contact MDC to set up an appointment to update our meter.   We did so, thinking this was a transfer-of-ownership kind of thing.   About 1 year passes, during which we pay our water bill on time and in full every month.  At this point, we are used to our monthly water expense  being about 100 bucks.  So you can imagine my surprise when we got a bill one month for $4100.

I don't know exactly what was done when they updated our meter... but apparently that update uncovered a $4100 balance that the seller owed.  Turns out MDC was sending the seller "estimated bills" for a number of years.  She was paying them diligently, which is why this balance did not come up at closing.  Upon uncovering this, MDC charged her $4100.  She refused to pay, because at the time of closing she was up to date.  We then get billed that $4100 balance.

Something was up, we didn't just increase our monthly water consumption by 4,000% all willy nilly.  I call our attorney, he calls BS on MDC and tells them to send the bill back to the seller.  She refuses again.  At this point, our Attorney files a claim with our title insurer to pay for this.  So now fast forward to July of 2017.  Our title insurer is taking the seller to court, and our attorney tells us that he talked to MDC, and water service will not be terminated until the case is settled, and this will come at no expense to us.  Great. The court hearing is scheduled for December 2017.  December 2017 rolls around. We don't hear from our attorney, yet every bill we get shows what we owe, plus $4100 and whatever late fee started accruing.  we continue to diligently pay for our usage and fees.

Yesterday our water gets shut off.  I find out from our attorney that back in December, the seller had admitted to owing the $4100 balance, but could not afford it at the time.  She would not sign a judgement, so the case was extended.  The title insurer would not dish out the balance (now over $4400 due to late fees) unless they had a signed judgment.  Someone at MDC yesterday, just doing their job, sees that our account is showing as extremely passed due, and didn't get whatever memo stated that water service would not be terminated until after the court case in December was closed.  So they shut our water.

Our Attorney gets a check from the title insurer to pay it right away, and actually as I write this post today, a day later, our water has been turned back on.

Question: 

Is MDC shutting our water in this case illegal?  We plan to discuss with our attorney further...

I'm no expert, but I've been toying with the idea of vacation rentals as well. One thing I learned that differs from normal rentals is the need to factor in the rental season and weekly vs monthly rent. Can the weekly rent you bring in during say a 12 week vacation rental period cover all of your yearly expenses? Otherwise, I imagine the formula is not much different than a normal rental or BRRRR property.

@Marco Cruzatt

So to answer your questions:

Do I need an agent? Up to you, the seller pays the agents when you close.  So as a buyer, if you want help finding a place, tell a realtor what you're looking for and they can probably help you out.

To answer your second question: to know whether or not it's a good deal goes back to my earlier post.  Figure out what your metric is, how much cash flow do you want from the property.  Lets say you want it to earn 500/month after all expenses.  If you can get a mortgage for 3.5% down that allows a positive net cash flow of 500/month, then its a good deal.  Now if you can only put 3.5% down, but you need 20% down for that cash flow to work, then its probably not a good deal for you.  There might be some ways to raise capital for a down payment (i.e. gifts, selling something...) but in most cases, I know in Connecticut, you can't use borrowed money for a down payment.  

So when you say "what if I find a good deal but can only put 3.5% down?" then it might not be a good deal... for you.

Originally posted by @Marco Cruzatt:

Michael:

I'm a full time Civil Engineer with a decent income (Taxes are kicking my butt at the moment). I would like to start investing in real state.

This is what I have planned,

Option A:

Buy a house where I can live in , fix it up a lil bit and then sell it so I can make some money (Hopefully the house will create equity within the first 2-3 years).

Option B:

Buy a 4 unit, live in 1 and rent the other 3, once I have some cash, buy another house (where I can live in). 

As you can see, I'm still a little uncertain on where and how I would like to get started. I wanna be able to buy multiple properties to either flip or hold, whatever is more convenient for me at the moment. As of now, Im still trying to figure out what the best way to get started would be.

I'd like to live in my own house and at the same time I'd like to start making more money through investments.

Does that make sense? 

 Yes that makes sense! I'll try to offer some advice on how to start down either path, but ultimately you need to decide which outcome you see yourself benefiting from more.

Option A looks like it helps with one of your desires, to live in your own house. This option has potential to make you money down the road by physically putting the equity into the house, like you said by fixing it. In order to get started going down this route, you want to find a place at a pretty steep discount from the ARV. Like Cameron said earlier, its all about finding those gems. When you get your hands on a place at a discounted value, you know you can force the appreciation of its value. This should provide much more successful results than buying a place at full market price, doing some minor fixes, and hoping the market appreciates.

Option B will start making you money, but you wont have "your own place." This in my opinion is what I recommend.  I currently live in a duplex and rent the other unit.  While I am not making money, my tenants are effectively putting half the equity back into the property for me.  If you screen your tenants thoroughly in the application process, and you're patient enough to find good ones, its worth it.  Even if you don't start out in a place you can entirely call "your own."  To get started on this route, learn how to analyze potential rental properties... what expenses to account for and how to estimate rent (I personally love Rentometer.com).  There is plenty of literature on here and elsewhere on that topic.  Once you've figured that out, practice!  Look online for properties and analyze them.   Use your analysis to figure out what you can offer on the property in order to make money, don't focus so much on what it is listed for.

I really hope this helps! I don't know everything and I still have a plenty of experience to gain.

You should spend some time thinking about what your goal is and where you want to be in 3 years (or further even). As you dig into this site you'll notice that there are not many people buying houses when the market is down and waiting to sell them when the market swings back up. That type of "investing" is actually called speculating, and is not much different than gambling. What are you looking for? Live rent free? Make an extra $500/month? Flip a house for a $20k+ profit? There's ate different ways to do all of those. There are many approaches you can take, and most of them don't involve speculating... That's what is what is so awesome about REI. So like I said, a good place to start is to figure out what exactly you want, and then what strategy is best suited to get you there. There are a few good articles on here about different strategies for beginners. Hope this helps, good luck!! Mike

Check out the BP deal analyzer for wholesaling. It has an option for flipping or holding. You can give it a whirl for free and if you like it go pro and use it. Or just make note of the inputs and calculations it uses and do it on your own!

Joshua Martin hit the nail on the head. You should start by figuring out what your desired Exit Strategy is in general. It looks like you want to buy & hold. So, What metrics do you want to set (cash flow, cap rate, cash on cash return, etc.) setting these criteria for yourself will allow you to quickly tell what is a good deal or not FOR YOU. Once you have those metrics set, like Joshua said, start looking for the areas that lend themselves to the numbers you want to hit. Good luck! Mike

Hi Will,

If you're looking at Albany it might be worth your while to check out Troy, NY too.  Its a short drive from Albany.  Very cool city on the Hudson, I went to college there and since I've graduated there have been a lot of businesses opening up downtown.  The city officials take reviving Troy very seriously, and they seem to be making some strides.  Its a college town so there is always a market for rentals.

Good luck!

Mike

Hi All,

I met with the owner of a potential lead last night.  Unfortunately he doesn't seem motivated enough to make the deal work, but I do have a question about something from our conversation.

He said, "...let me know and I'll have you talk to my attorney."  

So my question is: When negotiating an off-market deal, whether it be for wholesaling, flipping, etc, how do you handle that?  Typically I've been told to buddy up with an attorney that knows your plan and work with them to close the deal.  I'm sure this isn't uncommon, so is there anyone who's closed a deal with the seller's attorney before? If so, how did it go?

Thanks,

Mike