All Forum Posts by: Peter Falk

Sec 8 also does a property tour and flags various safety issues (confirming smoke, co alarms, etc) so could get an advance list to make sure items are all done or you have no concerns about passing the basic inspection before getting too far down the road with an interested sec 8 tenant.  I also fully agree that you need to screen on housing history, etc. and just view Sec 8 voucher as their partial or full source of income, but make sure they are qualified in other areas of your screening as there may be issues aside from making the rent payment. 

Not knowing the offer/inspection contingency terms, would generally seem that if you don't want the property due to these items, it would be time to give the seller a notice of defects you object to and if they have a right to cure in the WI Offer, they can agree to fix those items before closing and move along or tell you they won't fix them and the deal is dead (or if they weren't given the right to cure defects, the deal would be dead) but again, would need your agent knowing the terms to discuss with you or an attorney or advice from both.  If you have time on your inspection deadline you can also throw out an Amendment to the Offer giving other options for the seller to consider (seller credit, lower price, more time for further repair bids, etc) if you do want the property if these items are addressed (also assuming the seller didn't disclose any of these items to you, although an old roof is usually pretty obvious and just worked into the offer price up front).

It is confusing for a plumber to offer no repair solution (is it a broken sewer main outside of the house that company doesn't deal with, etc) so sounds like that may need more getting looked into.  If other items drain though, it seems the washer may just be broken and the toilet a stand alone issue?

Also could see who is developing the closest new subdivisions and see if they'd have an interest.  If municipal sewer and water isn't close enough to connect, that will force bigger lot sizes for for well and septic. 

I agree with just calling the municipality.  It sounds like a rural area, so likely one person handles all the zoning, variances, etc. so can learn a lot with one call.  Some GIS maps will overlay wetlands and floodplain areas, as that will likely impact your buildable areas and a place to start too.  Sounds like a spot that would interest people with boats they are willing to tow and having your cabins would allow them to tow their boat up instead of a camper.  

FHA also has condition requirements (safety, security, soundness)-no peeling paint on pre 1978 homes, functioning mechanicals, roof with some useful life left in it, etc., so can skip looking at heavy fixer uppers if you definitely want to use an FHA loan.

Also, not sure the plan with your friend helping you out-but if with down payment funds, if loaned, think they'd count that as a debt burden on you or require them to sign that the funds are a gift.  

Perhaps some landlord/tenant attorneys who work with property ownership entities may have recommendations?  I have no direct experience, but a Madison fund I have passive shares in see had some docs drafted by Justin Mertz with Michael Best and Friedrich's Milwaukee office.

I'd confirm FL landlord/tenant laws, but in WI owners clearly have the right with a minimum of 12 hour notice to show the property, so can remind them of the law and showings are a needed part of the sales process (and could discuss working with them on when showings can be done or ask buyers to view the other side first and then the problem side if they have further serious interest).  If they do have an in place long term lease, could let them know that lease transfers to the next owner and they can't modify the terms during the lease (again, assuming that is like WI) and that may alleviate the their concerns.  However, I do agree as well that if their lease is winding down, just don't renew and market it vacant or let them know you won't be renewing to make it more saleable, and offer to let them end their lease earlier if they find a place to relocate to sooner.  Like with buyer showings, I also vastly prefer showing a vacant unit to giving notice and one that is occupied (could be messier, someone home that forgot or didn't get the notice passed along to, etc).

A heavy rehab property that wouldn't qualify for conventional financing would limit the pool of buyers to cash buyers (or those taking on non conventional loan products-one flipper at a closing had a good relationship with a smaller local bank who provided financing in a portfolio loan-mortgage they held in house and didn't plan to sell to Fannie/Freddie).  My guess is to get a seller to consider a 203k loan and buyer over a cash buyer would be you'd have to entice them with a higher purchase price.

I'd run the numbers carefully though, as if purchase price + rehab = cost of a ready to go/fixed up property, save the headache of the rehab and just pay more up front for a property ready to go or more cosmetic work.

You also have to wait and see what the tax/mill rate adjusts to.  Madison has seen overall very large assessed value increases the last few years, but with those big moves up in tax base assessed values, the mill rate (to get the money the city needs) has typically then fallen.  So, the tax bill in some cases fell, if the assessed value of that parcel didn't change.  Net taxes have pretty much always gone up, but a 10% increase in assessed value, will not likely end up resulting in your actual property tax bill rising that same amount.  

The 203k (purchase and rehab loan) is great on paper, but in a competitive market think sellers would likely pass on accepting an offer contingent on 203k loan financing.  It's been a few years since I had buyers even look into it, but as I recall required the buyer getting contractor bids prior to closing to establish the loan amounts, and little reason for sellers to give a buyer a long window to investigate that and hope things come together when they can just accept a quick cash buyer offer.  Terms may have changed, but as I recall you also had to hire contractors.  Makes life easy for the buyer with that, but didn't work the best for someone wanting to do a lot of work themselves and build in some more sweat equity.