All Forum Posts by: Jeff S.

Wayne Brooks, Dion DePaoli, and Joel Owens - Thank you, I appreciate all your input.

I will start with the zoning department and see where that leads.

I have a seller that thinks they have a potential easement issue. The neighbor (several years ago) and since moved/resold their house, installed an extension on their driveway that runs right next to the property line. I've searched other forums to find advice on this but I'm still not sure where to start. I'm trying to figure out if this is something that needs to be resolved and how to do it with the least amount of expense incurred.

So a few questions:

How far does a structure (or concrete drive) encroach around its premises? Do I contact the city to take a look? A surveyor? I've read multiple suggestions on related threads to contact a real estate attorney, but I don't want to spin the hourly wheel if I can do some of it myself. The add-on was not permitted to the seller's knowledge. I haven't gone to verify that with the city. Also, I'm concerned that I may start off on the wrong foot with the new neighbors if I rent the place out and we just fought a legal battle over the property line. But I also want to make sure I will be getting all the land I'm paying for, free of issues on the front end.

No, sorry I should have clarified. I don't think the seller has the HOA fees factored into the price. As long as it's included in your deal analysis somewhere you are good - by no means is it a rule. It's something that I've seen agents and other investors subtract from the overall price as another way to analyze the deal. Sometimes the seller is behind on dues, but you can look that up as part of due diligence. I only brought it up because people forget about HOA fees and then see breakeven or negative cash-flow when they are hit with dues. Especially when they increase for whatever reason. So in your case, with a margin of $162, had it not been factored in the condo's cash-flow would be negative.

Around here I've heard 10 or 12 times (basically a year) of monthly HOA fees factored into price. You may want to ask the previous owner if there were any HOA issues in the past. I've heard Brandon or Josh allude to problems with condo HOAs in previous podcasts.

Sometimes zillow can pull recent sales for condos. But you'd have to widen your search if no recent sales were in that area. Cool find though, good luck and let us know how it turns out!

Need to account for HOA fees too. Not sure what the standard practice is for factoring them into price in your area, but I bet there is one.

Michael, welcome to BP. Be sure to set up keyword alerts so you will know when topics you are interested in are being discussed. Good luck on this deal, let us know how it goes!

Jonathan Sullivan, there are lots of blog posts on how to "start young" here on BP, Brandon Turner has written a really good one:

http://www.biggerpockets.com/renewsblog/2013/02/09/how-to-start-investing-real-estate-young/

Take your time and plan things out. If "everyone" is telling you these discouraging messages, change who you are talking to. There are plenty of investors here on BP and elsewhere that will encourage you. Keep asking questions and re-developing your investment strategy...it will change as you grow in knowledge and experience. The fact is, people will rent a property that fits their needs, the landlord or perceived landlord doesn't really get in their way if they want what you have (a place to call home).

Alaska is far far away from Oklahoma. I would suggest visiting there before moving. It's a gigantic state, so lots of places to choose to move to. Winters are cold and lack of sunlight year round will beat you down if you aren't prepared. Lots of opportunities to make money up there though. And yes, you can invest from literally anywhere...but you will need your business set-up to work that way. There are many investors here that invest out of state and love it!

Not sure what you mean by "make the rent"? Market rates determine how to set rent. Basically, what is everyone in the same area charging. You can call PM companies, check various websites like craigslist, rent-o-meter, zillow, etc. for comparable rents.

And Ditto on Mandy's excellent advice. Pre-Congrats on your upcoming closing Mandy!

Welcome to BP Jeremy Spiegel!

I agree with K. Marie Poe on the possibility of structuring the deal with a gift deed. However, the first $250k of a single person's gain on sale of personal residence can be excluded from taxable income (assuming you meet all the requirements..see IRS pub 523).

I'd be very careful with an installment sale as it usually requires the interest income associated with the installments to be reported as ordinary income each year (see IRS pub 537 for more explanation). Again, have her consult an actual CPA or EA to determine how her taxable income from this transaction could affect her medicaid benefits.

I believe she is worried about her reportable income increasing and phasing her out of medicare benefits. If she has owned and lived in the home for more than two years I don't think she has anything to worry about if the profit from sale is under $250k (not legal advice). The seller should consult an EA or CPA to confirm how the sale will affect her situation.

Good luck!