All Forum Posts by: Paul Pratt

If possible I'd say get some opinions from a local mortgage broker as well. Banks shouldn't be your only source!

Yeah Orlando is cracking down. Highly suggest looking for areas just outside main metros. For example Daytona Beach has set areas for STRs, but a few surrounding towns have none at all. 

It depends, you will probably not have any vacancy issues in LA. But you mentioned another state? If you are open to moving out of state obviously your options will increase tenfold. Could probably buy a 4-plex out of state and have a full unit to yourself for the same price.

-How are you qualifying the buyers? What do you want to see from them financially? Are you using a 3rd party to qualify the buyer?

Bank Statements, Tax Records, Credit Checks

-What would motivate you to do seller financing?

You are your own bank in this regard aside from slight risk (inevitable) and your property is struggling to get traction so you have to compromise.

-How are you setting up the payments? I know title will do a lot of this.

Monthly and a 5 year balloon structure so that at the end of 5 years they pay balance due or get a loan to pay it off.

-How do shore up the risks? Whats your plan when the new owner stops paying?

The risks are what a bank does every single day. And hopefully they don't because they have been properly vetted and have money into the property that would be lost.

@Chris Seveney I don't think there will be any "fireworks" as I'm hoping everyone in this forum has enough data/info to not be shocked by this. Maybe non-investors would have more pushback on your statement.

Let's be honest, most people didn't get it in the 2's. Some did in the 3's and a lot of people in the 4's are mad they didn't get the 3's. Everyone else who waited is sitting back hoping for a miracle while home prices have stabilized and not crashed like they hoped.

Lesson, and I think you'll agree is be active when you can. Your window may close at any minute.

Quote from @Patricia Sander:

Quote from @Paul Pratt:

@Patricia Sander I think you're overcomplicating things.

1. Almost all real estate transactions are AS IS.

2. Within your inspection period you do your due diligence, if you don't like it you can back out and take your EMD with you.

3. You can ask for a credit but seller doesn't have to give it to you. Someone else will probably buy it if it's a solid property.

4. Any attorney who is urging you to complete a deal you're not comfortable with is not a good sign.

 You’re right, I told her I was terminating and she said I can’t do that, I asked what she meant as the contingency still stood and I was unhappy with seller response to “resolve” and she said I should at least hear the seller out first even if I wasn’t legally obligated to. I’m going to CC seller attorney and both realtors about my choice to terminate and never use this lawyer again as this is way more stressful than it would’ve been if I had adequate legal representation. Thank you for your input! 

 No problem! Yeah, if your representative wants the house more than you do sounds like a red flag. Clients come first.

@Patricia Sander I think you're overcomplicating things.

1. Almost all real estate transactions are AS IS.

2. Within your inspection period you do your due diligence, if you don't like it you can back out and take your EMD with you.

3. You can ask for a credit but seller doesn't have to give it to you. Someone else will probably buy it if it's a solid property.

4. Any attorney who is urging you to complete a deal you're not comfortable with is not a good sign.

Quote from @Andrew Creel:

Quote from @Paul Pratt:

@Andrew Creel I'd say time would be the bigger deciding factor. If it takes you a year plus to get permitting and build vs a renovation in a few months then in the course of a year you would potentially let 6 months or more cashflow slide. Totally up to you, but if the cost to build is similar, I'd just renovate and start your house hack sooner than later!

Paul, thank you for the response. Would the 6 month head start in rental payments outweigh the probable differed maintenance on an existing Duplex? 

I think it depends on a few things. In my area of Florida for example, concrete block construction is much lower maintenance than frame. So If I found a block duplex, even if it's older, I'd prefer that over a brand new one made of frame/wood. I'm sure your climate is similar.

Swap out a roof, cabinets and flooring and paint and you're good to go. Building can be a hassle even when builders promise you it won't be lol So the more specific we get the better and will help make your decision easier. 

At least what I've seen is rents/prices for multifamily units aren't impacted as much by the year of construction.

@Andrew Creel I'd say time would be the bigger deciding factor. If it takes you a year plus to get permitting and build vs a renovation in a few months then in the course of a year you would potentially let 6 months or more cashflow slide. Totally up to you, but if the cost to build is similar, I'd just renovate and start your house hack sooner than later!

@Anthony Alexander there is no minimum value! Just keep in mind that money from will go straight to an intermediary. Which you will use for your next property which must be identified within 45 days, and purchased within 180 days. The property needs to also be higher in value as well or you'll have to pay capital gains tax on the difference.

Hope this helps!