All Forum Posts by: Robert Ferrell

Hey everyone, this is the situation I'm facing right now. For the past 15 years my mother and I have lived in one unit of a duplex. Weve been excellent tenants and have always paid rent on time. Recently, the owner of the buliding sold to our neighbors in the back half of the duplex. This neighbor gave a verbal agreement to us that he would not make any changes and always be willing to work with us because he knows our situation (my mother is on permanent disability and section 8) and also because he knows we're good and reliable people. 

Now, about 3 months into him being the new owner he has brought up some issues about how "unfair" it is that we pay such little rent, a number that he knew well before purchasing the property and a number he well knew when he offered his verbal agreement, granted, it is pretty far below market. This is mostly because he got himself into an extremely bad deal and pays a ridiculous mortgage. And is now demanding a $200 increase in rent or possibly less with exceptions such as we will no longer have use of the driveway or front yard or side yard storage. 

I understand we have been lucky with owners in the past and our rent not being increased too drastically over the time we have been here, but is there anything we can do to counter this? Does the verbal agreement mean anything? And can a landlord restrict certain areas off from use like he has proposed?

Any suggestions or info would be greatly appriciated. We really dont want to have to move, mostly because moving costs alone would be nearly impossible, not to mention a first and last months deposit on any new place. So any advice will help. Thanks.

@Wendy Patton Your presentation was very interesting. Let me know if I am understanding this correctly. For example A seller has a home listed at 100k, I negotiate a lease option deal to buy the house for let's say 95k in the next 5 years. In order to solidify that option, I pay them a fee of lets say 1k. Now I am in charge of that property for up to the next 5 years, which means every month until I can find a new buyer, I will be making the monthly lease payment to the seller? But, once I find an interested buyer I can offer them a lease option for a shorter amount of time, say 3 years, and now their monthly payment will cover the lease and hopefully they will excercise their option to buy, in which I would sell the property for say 110k? 

So my purchase price is 95k less 1k for the option price plus however many lease payments I had to make before finding a new person to offer a lease option to, then subtract closing costs and what is left would be my profit?

Please let me know if I am understanding the process correctly. Thanks!

@Tom S. Aren't closing costs paid by the seller? If not though, is that something that could be negotiated into the purchase price kind of like a warrenty is stacked onto a car loan? Also, I would be planning to rent out the building, so would relying on cash flow be sufficient to cover that 5-10k surprise cushion?

Being a new investor with absolutely no money in my bank account, I am very interested in the prospect of Seller Financing. I have read that it is usally much much easier to work out a financing deal with a property owner rather than a bank, especially when you are looking to buy mulitifamily properties (which I intend to buy). My question is, how can/should I try and convince an owner to finance to me when I have no money down. I know this is a very common question. Everyone wants to do a deal with no money down and blah blah blah. But, I am being serious. What can/should I offer instead of a down payment in order to incentivise the owner to actually financing their property to me. 

If you have any experience making offers to sellers with no money down, what did you offer? How did you add value or convince them that doing a deal with you without recieving any money down would work for them. I am very interested in not making this a one-sided deal (i.e. I want your property for nothing and you should thank me for taking it). I want to create a deal that satisfies both my need to get the property with no down payment and the sellers need to feel they have made a good deal.

Also, if you are a seller that has financed to someone with no down payment, what did the agreement look like? What did they offer you? What were the terms? Any relelvant info would be extrememly appriciated!

Thanks for the info everyone! Your responses have confirmed my suspicions and I'm thinking that this is a deal I probably don't want to get into. I would much rather own the entire building rather than just a single unit.

@Scott Hollister Awesome advice for starting out. That is actually a route I am very interested in taking, which I why I stopped when I saw the Quad in the first place. 

Thanks for tha advice @Donald Cooley. I've got a question about the balloon though. What exactly does that mean?

Hey there everyone. Tonight as I was driving down the road I passed a "For Sale by Owner" sign in the yard of a Four-Plex. I pulled over and took a photo of the sign to quickly save the info. It didnt offer much, a phone number and a price. The price listed though, was clearly not enough for the entire property. So I am assuming that this person must only own one unit in the four-plex. My question now is: Is this a good idea to do? Does any one have any experience owning one half of a duplex or one unit in a three/four-plex? Does this limit what you can do with your piece of the property? Can a majority owner dictate any rules about specific things you can do with your unit? Could they try and fight possible renovations or anything like that?

If anyone has any experience with a situation like this, please share any advice/info. Or, if I'm completely mistaken and single units cant be purchased by multiple people then by all means, dont hesitate to label me a bafoon! Thanks lol.

Hello everyone, this is my first post on BP and I'm hoping someone out there would be so kind as to asnwer a few questions I have. Before I ask the questions, I'd like to point out that I am a complete newbie to the world of real estate and my only education thus far has been reading the Beginners Guide here on BP. That being said, I am eager to learn and hope to engage in my first deal soon. Now, to the questions:

1.) When aquiring a property by way of seller financing, would it be smart to negotiate a no penalty for early payment clause into the agreement? If this is something that is commonly done, please forgive me, but I ask because, if I'm not mistaken, on traditional bank mortgages there does tend to be a penalty for early payment. Personally, I like the freedom to pay off a debt as soon as possible. So just wondering if that practice would be a no go or something that shouldn't be a problem.

2.) In the same senario, a seller finance deal, should/can I have someone (I'm not sure who actually does this, please let me know) come and inspect the property before I agree to purchase?

I feel like I had another question to ask but it's evading me at the moment. Maybe as the discussion continues I will remember. Thanks in advance to anyone that would like to chime in. And also, feel free to add any helpful information that may relate to seller financing or the above senario.