All Forum Posts by: Russ McKelvey

If I am buying a property through escrow (in CO), and get title insurance, what should I be looking for from a clean title perspective? What do I look for in the preliminary title report?

My thoughts after reading all the comments in an 11 year BP post are:

Make sure you check the commitment before you close, when you get the policy it is too late to do anything, you've already bought any problem there is.

1. Property taxes - make sure all are paid current prior to close

2. Supplemental taxes - make sure all paid current prior to close

3. Any other city/county bond related payments

4. Legal description is correct so that it is the property I am buying

5. The exceptions will list out the restrictions and easements that affect the property and you want to read them and understand them. You don't want to find out after the fact that you can't use the property the way you wanted to or there’s a gas pipeline easement running through the backyard you didn't know about.

6. Look for stuff that has been recorded with a recording number. This sometimes seems to be in the exceptions section and sometimes in a "requirements" or "conditions" section. This is where you will find previous deeds of trust, specific easements granted, etc. (Also a good way to find previous owners who may have properties to sell in the area.) i.e. Airport Air Navigation Easement will tell you you are in the flight path. Utility Easements, others.

7. If you get a title commitment, it will usually have a list of requirements that need to be satisfied, such as payment of overdue property taxes, HOA fees, etc. This list should also include any deeds of trust that need to be released and reconveyed.

8. ​Make sure there isn't going to be an exception for mechanics liens in the policy, especially if the property has just been rehabbed, you don't want to get to pay the subs who did the work. Decide if you want to add mechanic’s lien protection if it is a recent rehab.

10. Get a survey or at least make sure there won't be a survey exception in the policy. I can't tell you the number of times I've had claims where the house the insured is living in actually sits on a different piece of property.

What else should I be looking for and how concerned should I be about this during due diligence? If I have questions, who is the best resource? Should I call the title company?

Thanks BP Community!

Hi Sid, hopefully someone from WA will answer but we sold a SFH to a long term tenant in Fort Mill, SC in 2018. We negotiated and used a very simple contract provided by a real estate attorney and closed with a title attorney. We paid maybe 600-1000 dollars in fees. I agreed to pay the closing costs that were about $2800 and buyer agreed to buy it As Is.

We submitted the contract to the lawyer and they had us fill out buyer and seller info sheets and they directed the rest. 

My wife is a Colorado Realtor now and I do believe that if you want to get top dollar, are new to a market, or out of state it makes sense to list the property with an agent but doesn’t sound like that is your goal here.

We knew we were selling slightly below market value to the tenant but didn’t want the hassle, wanted less capital gains tax, and just needed some money for down payment on another property we wanted. 

I did not have much experience at the time other than a 4plex we house hacked and still own but the title attorney walked us through it without much hassle at all. 

We also paid an agent for a CMA just to confirm we weren't giving away too much. We paid the agent because we knew we didn't plan to list with them and weren't buying anymore property in SC so wanted to compensate them for their time.

@Doug Spence and @Natalie.  Thank you, I will reach out to @Linda on Monday.

@Candice De Thanks! I will also reach out to Long Law Group, I ended up on their website a few days ago.

Also thanks to those who sent PMs. 

@Doug Spence. 

Thanks for the reply. I have not explored private money as an option yet, but am reading a lot about it right now. I want the  confidence of knowing I have been successful on a small apartment before feeling okay with asking others to  take the risk alongside me. That said, I know will have to get over that at  some point, but  maybe once I leave the military and  have more time. ROTH is a good option but  I like the diversity of my retirement assets for now.  

The more I have been reading, the more I am considering selling the 4plex and trying to do a 1031 into small apartment with the full proceeds because the biggest HELOCs on Investment Properties I have found after 26 calls is $250K. I am just concerned about  trying to make the 1031 timeline work for an asset type I haven't worked  with before. I have been some good  commercial lending referrals, but  now looking for property managers with small apartment  experience here in Colorado.

Thanks for the shout out to @Stuart Grazier I will try to connect.

BTW I like the Honor and Equity branding you have, Would love to  connect and hear what you do? 

Hello BP!

I am looking for some general Tax Strategy/Planning help and a referral to a CPA that is good with real estate investing.

Our goals: To make sure we are taking full advantage of our current situation and not leaving money on the table and to build a  relationship with someone that can help us understand the  potential  tax implications of moves we hope to make.  

Our situation:  

I have a W2 job with the military and will be eligible for the retirement pension in 3 years, but will probably stay in 5 and then hope to transition to REI full time.

My wife is a realtor with 3 years working part time, but starting to  get  closer to  3/4 time.

We have a 4Plex that brings  in approx $50k in rental income and cashflows about $2k  per month  managed  by a property manager in CO. We  live  in Colorado.

REI Goals: now-end of 2022: Purchase 2 x addl 4plex, 2023: buy 3 x 4plex, 2024 buy 3 x 4plex (max 10 mortgages), buy 8-12 unit apartment building. Currently looking in state, but considering out of state markets to get a better mix of properties between cash flow, appreciation, and balanced markets.

Any general advice  or questions are  welcomed and appreciated.

Any referrals to good CPAs willing to help us learn along the way as  we build  a long term relationship are great appreciated.  Colorado  preferred,  willing to work with great  CPAs living elsewhere if the know Colorado well.

Thanks BP!!!!

 

Hello BP!

Thank you for the template pinned to the top of this forum. 

Financing scenario/question template

Your goals and story: I am looking to start accelerating my RE investing in my last 3 years in the military with the goal of going full time REI in the next 3-5 years. We currently own 1 x 4plex in Colorado Springs that we bought with FHA loan in 2012 and house hacked that is a cash flow machine and has appreciated significantly. We want to buy 2 x 4plexes between now and the end of 2022 (probably in Colorado, but considering learning out of state). We are lucky to have pretty good equity positions in our 4plex and primary, 1 of 2 VA loans available, and a fairly diverse set of retirement supports (3 years from drawing military pension, mutual funds/TSP/ROTH savings, and our 4plex).

The problems I am trying to solve: 

I need some help to figure out a long term financing strategy to maximize the assets I have to buy more MF properties over the next 3-5 years while I have my W2 income. My wife is a realtor with two years of commissions history.

Challenge: We have lots of equity, but not lots  of cash outside of our retirement accounts.

Type of property: 2022 : 2 x  4plex ($600K -$1M), 2023: 3 x 4plex, 2024: 3 x 4plex (this will bring us to 10 mortgages): 2025: 8-12 unit apartment building

Location of property: Colorado in El Paso County (Colorado Springs), the Metro Denver Area (Aurora, Parker, Lakewood), or Weld County, Colorado. 

Purpose of financing: Purchases: Want to access as much equity from current 4plex as possible for down payments.

Type of financing sought: Not Sure what makes most sense. My current plan: 1. HELOC of approximately $400K to use for down payment on purchases. 2. Investment Loans (My family is not likely to want to house hack during this period after 6 moves in 8 years. 3. Possibly consider moving some retirement accounts into self directed. 4. Transition to apartments with commercial loans. Any suggestions or questions are welcome.

However I am not sure what people do to keep cycling cash back to HELOC for future purchases and then to exit the HELOC. Do you just direct cash flows to the HELOC? Do you refi after trying to force appreciation? Sell something to cover? Just pick up that payment? What is the best exit plan for the HELOC at the end?

Current or prior ownership of real estate: Currently own 4plex in Colorado Springs, purchased in 2012 with 13500 downpayment on FHA loan and lived there for two years. Bought off market, cash flows over $2000 per month after all expenses, market value $950K+, 30 year loan with $300K owed (refined immediately to drop PMI). Owned one SFH near Charlotte, NC 2008-2018 rented with property manager and sold to tenant thru lawyer in 2018 to purchase primary residence. Bought primary residence in 2018 and have approx. $180K of equity in 30 year VA loan. Have owned/sold 2 other primary residences in GA and CO.

Income Source: Salaried W2 (My  military), 1099 independent contractor (wife realtor,  third year),  rental income approx $48-50K year but cash flowing about  $2K month.

Monthly debt obligations appearing on credit report, plus (if applicable) personal rent and alimony/child support/etc: $ One  car payment of 350 per month, 2840 personal rent, 

FICO: Right at 800, some over some say high 790s

Credit issues: none.

Thank you for any advice or questions. The BP community was hugely helpful when we purchased our first 4plex and we wouldn't have been able to do it without you!

Hello, We have a SFH rental in Fort Mill, SC with long term tenants. They want to buy the home and we want to sell it. I am looking for professionals to help us work through the options and they way ahead. The tenants are interested in buying or rent to own. They have not had good enough credit to buy it the last couple of years, but they may now be eligible for a loan.

Seeking referrals to a good attorney that could help us discuss sale and rent to own options.

Seeking referrals for lenders that work with people with credit issues for home loans.

Seeking referrals for real estate agent who would be willing to help us coordinate the sale/closing for discounted commission based on not having to market for a buyer.

Thank you!

Russ McKelvey 

Yes, I suppose you could have.

Please view the opportunity below and let me know if you have an interest. If not, please provide me your criteria so I can get a better idea of what you are looking for.

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Another opportunity just became available in Falls Church, VA with lots of profit built-in! This is an great opportunity with addition or scrape and build new potential. A small addition and it could sell for $900,000+, or do a full scrape and build new and it could go for approximately $1.25 million.

This opportunity is located at 2634 West St Falls Church, VA 22046 and is priced at $554,000.

Addition/Rehab Comps:

410 W Rosemary Ln $1,050,0002,400 sq ftBuilt 1942

204 W Marshall St$1,100,0002,500 sq ftBuilt 1950

604 Laura Dr$902,000 1,980 sq ftBuilt 1950

Scrape/Rebuild New Comps:

7237 Woodley Pl$1,239,0004,300 sq ft0.13 miles

A few more details for this property:

3 bedroom/2 Bath

822 Sq Ft

Built in 1955

Lot Size: 13,223 Sq Ft or 0.3 acres

Colonial Style

Forest Heights Subdivision

Fireplace

Estimated cost for a rehab and small addition would be approximately $160-175,000. This would bring the ARV to $900-$1 mill+ depending on size of the addition. Or, do a complete rebuild of 3,500-4,000 SF and reach an ARV of approximately $1,250,000. This area is being built up quickly and there are plenty of these new million+ dollar homes within a half mile.

Pictures and Videos can be viewed at these links.

Pictures: https://drive.google.com/drive/folders/1-1xu3ZFl1f0RD750nr2PFIJmBBctu1Ex?usp=sharing

Videos: https://drive.google.com/drive/folders/1-2IQa4vzPJfbptAJOga239nAC6HcjwFp?usp=sharing

Deposit to secure contract will be $3,000.

Please reach out with any questions or for further information. This property will go quickly. As always, contact me via phone or text at 719-434-0206.

Hello everyone.

I am looking for any rehabbers currently working on a project in Deanwood, DC 20019.

I have an idea for a social media documentary that I would like to discuss with you.

Please shoot me a PM if interested in talking about it.

Thanks!