All Forum Posts by: Account Closed

I have a townhouse which I prefer to rent to families. However, 2 recent university grads (both female) want to rent it together. Would you rent it to them? Some potential problems in my opinion:

- 2 tenants on the lease which complicates the agreement

- May have overnight guests whom I would not want to stay

- May sub-lease the extra bedroom to people who I do not approve of

- If only one moves out, I cannot rent the whole house to a family. Finding individual tenants to fill each bedroom seems like a lot of work

- May have parties

What do you think?

Cheers,

Paul

I'd do a little social media search on them and see what kind of people they are. Parties are fine, it's "wild" parties that are the problem. You can keep them from subleasing and put a limit to the number of days anybody that isn't on the lease can stay. You just need to know what is legal to exclude in your jurisdiction. I'd want to know their majors and if they had jobs, too. It tells you a little bit about them. If they graduated in physics, that's one thing but if they graduated in message therapy that's something else.

1 Vote

Originally posted by @Paul Sassin:

Hello Everyone,

So...I’m in the midst of analyzing/negotiating my first Land Contract deal in Michigan....However the seller just realized there is a due on sale clause on his mortgage. :( I’m not sure what his loan amount is yet.

So is this a deal killer? Are there any work around for this? What can I do to protect myself? Also, are there any other important things I should do if he agree to terms for this land contract.

Thank you all!!!!!!!

A Land Contract with a private individual is very different than a Mortgage with a big bank. The private individual *might* allow you to assume the loan. But since it is "tightly held" he will certainly figure out the house has been sold and may call the loan due otherwise. It isn't a deal killer, but in this situation I'd talk to the holder of the Land Contract and see if he's on board. If it was a mortgage with a big bank, I say "no worries", just do it.

0 Votes

Originally posted by @Jason Hill:

Ok so here’s the deal...

A high school friend of mine down on his luck (stroke victim, divorce, health issues, etc) is nearing achievement of obtaining disability due to health issues. He owes 10k on a land contract for his ~$70k home, is nearing delinquency and is desperate for help. He has sold off nearly all of his belongings of any value and is at the end of his rope. He’s offering a $10k price tag on the home, suggests that we would own the home, and once he gets his disability, would buy back the house for $13,500. Then if he is unable to repay (undefined term) the house is ours. Certainly I want to help him out but I don’t want to get bit either.

Now I’ve not seen his current contract yet, as I don’t want to give him a false hope by asking questions. I’m hoping to get some advice on this matter so that I can avoid blindness to potential risks and to be able to ask the proper questions (of him and the current note holder).

Thanks in advance for any advice.

Thanks so much.

Since it's a Land Contract I'm guessing it is from a private individual who will want to get paid out if you go forward. In theory you would pay off the Land Contract and do a Lease Option with your buddy. The title is then in your name until he exercises the option (if he ever does). You can do a 3 year LO or longer or renew, etc.

The question then is, what if he stops paying on the lease? Do you evict him? What happens if he can't pay and a year later he still has no money to pay you? That's the down side.

Now, how much of a buddy are you if you are buying a $70,000 property from a "dear ol' friend" for $10,000 who has health problems?

2 Votes

Originally posted by @Jessie Randolph:

So I met with an attorney so I could set up my llc right. I told him I wanted a series llc and he said it wasnt legal in ohio yet but was in the works. Wondering how others here in ohio have structure their LLC's in ohio to protect there assets independently for buy and hold?

Until you have lots ($100,000) of equity, you don't need an LLC to buy properties. They are hard to maintain properly frankly. If you don't maintain them properly you lose in a lawsuit anyway.

Use umbrella insurance starting out. It is better coverage and doesn't require work to maintain.

3 Votes

Columbus, Ohio

Originally posted by @Tomeikia Gray:

Hey,

My name is Tomeikia. I am from Kentucky, and I am having a hard time finding a real estate agent without being pre-approved. I plan on using the BRRRR method for my first deal. What should I do?

While I encourage your enthusiasm, a real estate agent needs to be compensated for their time and effort. If you can't get pre-approved you can't close, and if you can't close then the agent doesn't get paid. They are nice people but they have to eat. You could get a real estate license and have access to the same things they do.

3 Votes

Originally posted by @Bryan Devitt:

Originally posted by @Victor S.:

seeing how ol' clayton likes to double and triple-down, can we say "appeal time"?

It was dismissed with prejudice, I think that is the end of the ball game legally but I could be wrong.

While a great Victory!!! -

Dismissed with prejudice means that they can't attempt to reopen the case before that trial court. They can appeal though if the attorneys want to continue making money, I mean can convince him that he has an appellate case ( which it seems is highly illogical). But, his ego might drive him on.

4 Votes

Originally posted by @Karan Chandran:

Hello...I am new to this forum. Live in SoCal and have been investing in SFRs mostly and one Multifamily since 2009. I have sold most of my investments due to capital appreciation (yes! I did pay pretty hefty taxes but am good with it). I was looking at OOS investing including turnkey investing. I like the cash flow aspect of it but I am worried about price depreciation(I feel like the prices are too high now in 2020 at least in So Cal) and big repair expenses that could drain all the profits and put me in a negative. Also, the property management costs when you add everything up such as the monthly 8%, lease fee of 75%, renewal fee, bi-annual inspection fee, 15% margin fee on repair etc. seems like a lot and in the end, they make a lot more money on my investment than I do with little to no risk while I am taking all the risks. Can anyone with experience in OOS investing give me some advice on this? I'd like to learn more about the risks associated with this type of investing and how to mitigate them. All your advice are welcome and appreciated! Thank you!

As requested I sent the info. Check your messages.

0 Votes

Originally posted by @Ashley Abramson:

My parents own a piece of recreational property (no house, but a bathroom/shower and a cabana) on a lake. They own the property with a friend. 50/50 owners. Unfortunately don't have any more details on the agreement (working on it). Sounds like a lawyer drew up paperwork for them but it is very basic. The friend rarely uses the property and came to my parents wanting them to sell the property with him, while the market is high. He said someone offered him $700k for the whole property.

Problem is my parents have no interest in selling. So their partner wants $350k (aka half of the $700k he was offered for the whole property). Tax assessment if $492k. I can only find one other vacant lot on the lake for sale it is listed at $449k and has been on the market for 472 days. No real comps on the lake as most anything sold on the lake has a home on it.

I am wondering if the friend/other owner has any legal rights to force my parents into anything? Or at this point can my parents just make him an offer to buy him out? If he doesn't like the offer is he stuck or does he have options? The property has been in our family since the 50s so it is sentimental.

You need to have the friend have the "someone" put the offer in written form with the proof of the ability to close. Just say, "I think we'd like to see the written offer so we can help determine value". I think your friend will get a rude awakening that it was hyperbole rather than a realistic offer based on the information you have provided. Once his feet are back on the ground you can establish a true value. It keeps you from being the "bad guy" with him thinking you are undervaluing the property.

3 Votes

Originally posted by @Jonathan Oh:

@Karan Chandran Prices have risen everywhere. Most markets that turnkey providers operate in are linear markets. Prices don't fluctuate as wildly as SoCal. The most important aspect to OOS is PM. Yes, they can cost a lot, but you have to ask yourself, is it more worth it to save the extra costs by managing yourself? It's not just about management either. What about understanding local laws, eviction process, etc? I invest OOS, so feel free to ask me questions. Hope this helps!

I looked around and settled on Phoenix. Las Vegas is probably good too, but when I did a point by point it jumped out at me. Your criteria might be different than mine. Make a comparison list and see what the bottom lines says to you.

1 Vote

Originally posted by @Derek Hutson:

Hello,

I am currently in the process of looking for my first property, and am gathering my network of resources to use (realtor, inspector, lender, etc..)

I asked my realtor for information regarding a couple home inspectors she would recommend, and she said that until I filled out her paperwork saying I am exclusively her client she can't give me any of that information...

Is this normal? Or is this a red flag that I should maybe look elsewhere for a realtor..

I'm not a realtor but in my day job I have lots of desirable contacts and that question often comes up. I simply say "if we decide to work together, you get access to my entire rolodex, shall we start the process"? If the answer is "yes" I pull out the agreement for their approval and then start answering all of their questions. If they say, "we'll I'm not ready quite yet" I say "fine, let me know when you want to get started". Why would I want someone I hardly know calling & wasting the time of one of my contacts?

It's also great for qualifying leads. I'm more interested in knowing if they are a "hot" lead or a "not" lead. If they aren't ready, I'm spending my time and expertise and contacts on someone who isn't in the buying zone and I'm thereby neglecting someone who needs my services and will pay for them.

2 Votes

All Forum Posts by: Account Closed

Account Closed has started 9 posts and replied 390 times.

Post: Would you rent a house to 2 new university grads?

Post: Due on Sale Clause?

Post: Risk vs Reward, helping hand with a Land Contract

Post: Attorney told me that series LLC's arent legal

Post: How do I find a real estate agent without being pre approved?

Post: Clayton Morris Loses $7.2 Million Lawsuit against HoltonWiseTV

Post: Downside to Out Of State investing for cash flow now in 2020?

Post: Own property with a friend- Friend wants out HELP

Post: Downside to Out Of State investing for cash flow now in 2020?

Post: Realtor can't give me networking information?