All Forum Posts by: Nik S.

@Mike S.

Thanks for the reply. Easiest way would be to create new llc and buy the real estate however that would create a transfer of how much I paid for property to the public.

Hi everyone, I am in contract currently purchasing an apt building. The sale is suppose to be an "entity sale" however I am a bit confused. My intentions are to purchase the LLC entity that holds the real estate in efforts to prevent any public info of the property actually transferring, hence no purchase price shown. Currently, a title company is handling the transaction. They are charging a conveyance fee (wouldn't that provide info to the public?). From what I read, shouldn't there not be one as technically no real estate is being sold, just an entity? This is all new to me, obviously meeting with an attorney asap however just trying to see if anyone else has some experience with how this is suppose to be done properly and effectively.

@Kyle M.

As bitter as it sounds, I always try to satisfy the buyer so the sale can go through (assuming it’s a price you are happy with). I always try to offer a credit if it’s something I don’t feel like doing. If not accepted, I fix MOST of the items (any unreasonable demands can’t be met). At the end of the day, your goal is to profit and move on the next one in a timely manner. No ego involved, dollars is the focus. Repair & close the deal!....and REPEAT!

@Jonathan Nixon

I’m waiting on a term sheet so interested to see what others are seeing.

Correct me if I am wrong but if there's only up to 5k worth of repairs....why wouldn't you do it? Capture the full ARV. After commissions and closing costs (given your PP/Repairs/ARV), you could potentially net 60k. Something doesn't add up. Check your numbers again.

@Nikolay Izmerli

Education always costs! Next one I’m sure will be better knowing what you do now! Overall you did more than a fantastic job on the interior and exterior. Over improving is what some of us like to do Bc it’s a reflection of our design/work however when flipping it can make or break the deal. Move on from this and make the next one count, your talent is surely displayed on your first flip!

Given the price range and area, it's safe to assume you will get more FHA buyers vs conventional. FHA appraisers may flag the slopped floors. In the event to proceed with the sale, the floors would have to pass FHA structural guidelines. Might be safer and easier to just clean it up and sell it cheaper. Both scenarios CAN work its just a matter of what your gut tells you. It sounds like your learning on exiting without fully renovating (leave it for someone else perhaps). Does the reward outweigh the risk? Just throwing that out there. Good luck with your decision! :-)

You never know what you get with tenants but that's part of the game! There's horror stories with all types of tenants.

@George Lods 

You can always request a rent increase however it's not always met. S8 department has their own way of figuring "market rent",  wrong or right. Generally trying to make the tenant pay more of they portion is difficult and doesn't happen too often. 

What you mention of S8 not paying full mkt rent is very true. If the rent works out in the low 700's as opposed to $800, then its okay. It matters when you base your numbers off the $800 and S8 only offers $700.

For the units I have that are S8, I NEVER worry about payment. ALWAYS on time (unless holiday).  

My expericene of S8 (5 years) is that the tenants are LONG term. So whether they are S8/F.responsible, after the long term tenancy your going to have to do a turn over regardless. 

Depending on who is doing your tenant screening (assuming all laws), whether its your or your PM, apply best judgement possible...just as any other tenant. 

Im sure you will require a deposit, so it goes the same for S8 tenants and f.responsible tenants. 

Depending on the asset/location, I don't mind S8. I have about 20 tenants/Units that are S8. I get my money on the 1st and have minimal problems. I am getting market rent so i have no complaints. These are also 1 bedroom units so the tenants can't cram excess people in. In my area, if you have S8 voucher you do NOT want to lose it as the waiting list is years long. So essentially tenants are fairly decent. Some investors say if you do S8 your units have to be PERFECT. It's not exactly true however you do need to take care of the required items to have your unit/building S8 approved...it's not hard and in most cases I agree with their demands. 

Obviously if its a A/B asset, I prob wouldn't recommend it. It all depends on your location and building. Sure you may come across a few bad S8 tenants but what about for the bad financial responsible tenants, some are TERRIBLE.  In the last 5 years, I don't think i've had to evict 1 S8 tenant however for the financially responsible tenants, I've had to evict a handful. 

Pick your poison :-) 

PS: The ONLY downside I see is when it comes time to the exit strategy. It appears that a building with S8 tenants has a very little appreciation value given location of course. Other investors see it as a "low class asset" even if its not true. Cash flow is king although. I don't personally buy on appreciation value but more so focus on core value (meaning given current income what's property worth right NOW).

Good-luck! Theres a ton of strategies that work, what matters is what's best for you!