All Forum Posts by: Natalie Schanne

Jan Fensterer - I'd be hesitant to trust someone new to me with my whole project. Create a written scope of work and walk through the site with 2-3 GCs who can bid the whole project piece by piece with a timeline. Or if you want to GC, then get this person to bid for the plumbing and get their buddies to bid on the other stuff (their suggested painter) vs your existing contractors (your painter(s)). Never pay deposits upfront for materials and non-completed work. Home Depot offers 30+ day credit lines. Too many stories about people getting burned by trusting someone unknown with a deposit.

In Jersey, I hire two ladies for $75 total and they clean a 2 br 2 ba thoroughly in about 2-3 hours. Ballpark $20/hour per person. House cleaning (with minor trash out) turn over shouldn't be more than $200 max. (If you need to do need to clean carpet with equipment, that might be another 100-200). That's what I've found in my market anyway. There are a lot of decent cleaners available on craigslist for cash and these are usually much cheaper than a franchise 'merry maids' would charge. Pay by the successful completion, not by hour. Make clear what you expect. If they have to bring cleaning chemicals, vacuum cleaner, paper towels, trash bags, then expect to pay more.

@Mike B. - It's great you've had this experience. After doing it yourself, you know how much time each part takes and what materials cost. (You know you can get perfectly fine materials and appliances on craigslist for 50-80% off new.) You understand quality. 

Now you are so well equipped to evaluate bids (labor+materials). You shouldn't get cheated. You can save by GC'ing yourself and/or keeping pieces of your scope of work where your preferred GC bids high but you don't mind deleting it from the bid and doing it yourself (like tiling). You win.

Overall, timing matters when you have more/unlimited deal flow. Forced appreciation from 12 projects at 10k is similar to 4 projects at 30k, except now you'll have a lot more properties to flip or brrr. There's less advantage to the speed (except during Philly's May-Aug rental season) when you don't have another deal ready to start. 

It also sounds like you had some fun bonding time with dad.

@Jon Graham - this is so exciting for you. Well, if you get 60% of the next 11+ showings to send you offers as well, then you might get offers a lot higher than asking.

Then the concern becomes whether the counter party has the cash in hand to pay for any difference between the appraisal value and your accepted offer (without trying to renegotiate it down on you.)

I.e. 10k conv financing offer over the cash offer, but appraises for 5k over cash offer. Person needs to bring $5k to the table to buy it, plus up to 20% of the loan amount and closing costs. Again, this is where proof of funds and quality of the counter party matters.

Good luck. Fingers crossed.

Kevin Laughlin What Platform do you use? I tried to set my tenants up with cozy.co for ach autopay, but months later nobody has used it. They prefer to deposit at the local bank in my account or pay by PayPal/Venmo by/on the first. I check deposits at COB on the first and know immediately who to send my pay or quit notices to with late fee info on the 2nd (or 6th depending on grace period). How many units do you have? It's definitely nice to have a software system that will auto withdraw the funds from the bank account on the first of the month and auto confirm timely rent receipt in some kind of dashboard. Who offers this at low fees besides cozy?

Jon Graham - your house looks beautiful. Good job. As a real estate agent, I'm always fascinated by houses that sell very quickly with multiple offers. I wonder whether the homeowner would have received more if he had listed higher. The agent is incentivized to sell the house asap. He or she only gets 3% of every $1 additional you get, so he'd prefer a lower priced, 'surest' thing. Best policy is to ask for highest and best by X date, potentially after 10-20 total showings. You may get higher offers from people who haven't seen it yet. Instruct your agent to tell all showing agents that you have pending full price offers on the table and to bring their best asap if interested. Know that you'll annoy buyers and agents if you ask for highest and best multiple times, and they might get turned off. But, you don't know how emotional these buyers are and how much they want your house. Last thing you want to do is go from 3 offers to 0. Ask agent to compare offers in a spreadsheet - anonymized - like Party A, Party B, Party C to compare offers as apples to apples. Ask for whatever you can get from the agents - proof of funds, credit scores/mortgage prequalification letters, proposed settlement dates. Mortgage prequalification letters should be from a direct lender not a broker. Lender pre-agrees to loan x amount. Broker pre-agrees to shop the loan of x amount to lenders. There's a significant difference. Financing problems can delay settlement 30-60 days and give the person an out for cold feet. You usually cannot keep earnest money for your wasted time (without a fight). Which aligns best with your needs? - Settlement Date (when do you want to move out? For vacant homes, closer settlement dates mean thousands less in holding expenses for property taxes, insurance and utilities). - Contract terms: --Financing: offers contingent on financing are worse than offers not contingent on financing. FHA requires inspections, seller-paid repairs to code, everything must have been perfectly permitted). I also am concerned about the strength buyers who haven't been able to save cash much greater than 3.5% of the purchase price. -- Inspection contingencies - these provide an out. (Friend was tied up in FHA deal for 2 months before it died due to an outrageous home inspection report - 60 year old home was priced 40k below market, buyer gets out after cold feet and asking for the sellers to replace roof, hvac, hot water heater, all kitchen appliances when all in working condition / passed FHA.) --Is a cash buyer willing to waive home inspection contingency or agree to as-is, excluding high gross expenses (like mold). -- Higher earnest money down Good luck. Highest purchase price is not the only consideration. What aligns with your needs? Timing? What are the qualifications / incomes / savings / credit score of the counter party?

Beware. Does the buyer have previous direct experience removing a home with a foundation? Cost estimates you've double checked from reputable moving companies? The Texas Flip and Move tv show details significant expenses and damage to homes that are moved. (I.e. Additions left behind, etc.) I don't see why you can't write a contract to buy the house without the land. (There wouldn't be any land title transfer but you'd need some kind of settlement such that the owner's mortgages and liens were satisfied, their property taxes reduced, etc.) Owner may need clarification on any demolition rubble left behind - whose responsibility is it? (if the home needs to return to basic land state?) Can you get out of the purchase of the house without the land if the buyer backs out?

David S. - you seem too emotional about your property's curb appeal. Please consider using your wife to communicate with this person. 1) Do nothing. No landscaping problems are irrevocable. If it looks trashy when you get it back in 4 months, then you can take it off their security deposit and have freshly mulched/mowed areas for the new people. (It won't show well until they've moved out though.) 2) If you want it maintained, it seems this person isn't willing to do it, so you can do it at your expense (but don't go crazy - tell them when the yard people are coming by - like once a month for $50-100). Don't deduct off sec deposit for this. 3) Send them a nice DATED letter with before pictures and current pictures of the house exterior. Remind them of xyz clause in lease and that requires the house exterior to be maintained in the before Condition. Include 2-3 contact numbers and bids from lawn companies (that you've researched), say any of these would satisfy the clause, and ask them to hire one for like $60/mo or $100/mo. Say the rent amount was discounted by $100-150/mo due to them signing clause xyz stating they'll manage the lawn. Tell them that you really appreciate them as good renters who take care of the house and you would hate for them to lose part of their security deposit for emergency lawn maintenance and fertilization to get it back to the before Condition after they move out. Note: I have yard maintenance to be done by the tenant in my rental agreement but tenants HATE doing it. I hired a neighborhood kid for $20 every 2-3 weeks and end up spending a few hours and $200 in craigslist helpers every fall raking leaves or trimming bushes. So next lease, build it into your rental rate and contract for a lawn care service. (With caution, if they ask, offer the next tenant a partial / $25-50/mo discount every month he's willing to do it himself with your/his equipment. Make clear repercussions in the lease such like Rent is $1500 with $50 discount applicable to every month the tenant texts/emails a dated picture of the lawn by the 28th of the month and you OK. This is time intensive though).

I'm assuming you're not willing to full-blown house hack (meaning renting bedrooms in your own house, not just renting out half of a duplex). I bought a 5BR 3 BA foreclosed house much too big for me in Northern Virginia and rented out spare bedrooms paying the whole mortgage, utilities and repairs. This house sold for 475k in 2006. I paid $255k in 2009 + 30k in renos. It's worth about $400k today. There are many cost advantages of duplex/tri/quad/room renting - home ownership: lower interest rates on $$, higher leverage (80-97%), lower home insurance, do-it-yourself maintenance, limited property management costs, 250-500k homeowner capital gains deduction from appreciation, fewer landlord tenant laws for home owners. Expecting appreciation is tricky and risky. On average, home values increase by inflation when maintained (capex of 1-3% of value annually). I'm currently shopping bank owned foreclosures as a buying opportunity. In Central Jersey, the houses still coming up for sale were often bought 2006-2007 and are still underwater in 2017. I'm looking in nice neighborhoods around Princeton where everyone paid $300-400k in 2006 (assuming continue expected appreciation from 200k sales prices in 2000). The REO homes are selling for $150-$200 now (requiring 20-30k work). The other direct homeowner sales listings at 300k+ 80% expire off the real estate agent MLS without a sale. Those people got stuck in their homes because the area around them depreciated.

There are registered agents and registered offices you can hire to give you non-PO box addresses - I just got one in PA for $49/year. (Another quoted me $99/year). They will scan all your mail for free within 48 hours and forward mail originals (with a limit). While this doesn't necessarily work great for checks and money collection, it works fine for business taxes and company registration. So buy a registered agent service and use their address... or use your home address and not care.