All Forum Posts by: Nik Corbaxhi

Hello BP Community,

Not sure if this was covered somewhere else but here is a situation. 

A power of attorney is attempting to sell the condo for the principal (his mother). The mother was accepted in hospice care and he wants to close the transaction ASAP. Power of attorney ends with the death of the principal. If I enter into a real estate agreement with him to purchase the property, and then the principal dies mid-transaction, does the agreement still stand or is it voided? 

Any help would be greatly appreciated. 
 

I agree with @Jason Regan above. I just closed on a property with COC return over 12%. It is not a buyers market but the numbers worked, and although I had a pay a higher price for the property to get, I was still able to capitalize because rent demand and price has gone up along with the price. Bottom line, do your homework and pull the trigger. If you tend to sit for a while to strike a deal, the others will grab it.

@Jacob O'Connor  My general goal is nothing less than 8%.  In general, a property with double digit cap rate (10%+) is considered a good investment.  Return on investment is also measured Cash on Cash or Cash Flow. A lot of people tend to not take into consideration the equity you are building along the way. I would say use whatever rate works for you and what you are comfortable with.   

@Mikel Kaubfa as others have suggested, the utilities are charged based on usage, therefore they should be paid by the tenants. That will give you the peace of mind that if utilities are going skyrocket, they are not eating away from your cashflow.

However, I would strongly urge you to do some research and connect with local investors and get their perspective on utilities. The only other benefit that I see is claiming the cost as a tax deduction.

Bottom line is, you can go either way. if you have good historical data and a good understanding of how much utilities will be, you can still include them in rent and be on the conservative side to allow for any spikes.

@Allana Alex most lenders will ask you for 25% down. i am going to assume your current house loan is in your name and as a primary residence. I have done that a few times myself and the only option I was given was 25% down and buying as investment property rather than personal, which usually has a 3/8 to 1/2 higher interest rate. I am curious to see what others have experienced.

@Charyl J. brokers can usually shop and get insurance quotes from different companies. They are most likely going to be your best bet. Find a good broker and explain the situation. From experience, there is always that one provider that will make an exception.

@Abbie Gibson a lot of good advice all around. I think every town has certain elements and deals that can work. It is definitely not a buyers market as houses are selling for more than asking ( at least I can speak for Fairfield County) due to the high demand from New Yorkers moving to CT. With that said, I have investment properties in Bridgeport and Stratford. Of those markets interest you, reach out and I can give you my 2 cents. Best of luck.

@Bobby Bohren for one unit, as mentioned, not really needed and does not really provide you much benefit.

As for the lender, if they find out, yes they can make the case that transferring the deed to an LLC is not allowed, however banks dont have the ability to check all loans for this. It only becomes an issue if you are not making payments and they have to dig around about you.

Also, just because you transfer the deed to an LLC from your name, does not mean that you personally are not liable for anything and just the entity is. I think there is a big legal debate on whether you can be personally liable, even if the deed is on an LLC. If the loan is on the LLC instead of your name, that would be a different story. Hopefully, I didnt confuse you more that providing clarification.

@Marco Padilla that is always the risk of buying properties with tenants. Personally, In the current market and the crazy world we live in, I walk away from any properties with tenants in. However, you have to look at the deal as a whole and weigh in the options and wether worst case scenario still means a push forward. Good luck.

@Luke Fruge Congratulations on getting to where you are. In addition to finding something close, do some networking locally and build a few relationships with successful investors that are seasoned enough to show you the ropes. BP community is great and we will give you all of the advice and support that you need, but even that will not be enough. Good luck and let me know if you want to talk. I would gladly give you my 2 cents, based on my experience.