All Forum Posts by: Ryan White

Hello Everyone!

I am knew you this and I am really looking for advice on what to do. I have stumbled upon a commercial opportunity with quite a story.

Without too much detail here are the short facts.

It is a commercial Plaza with 8 units that has been owned by two families that are not related. One side of the family did the business related day to day and the other built the commercial property. The commercial builder has died and this left his side to his family. The accountant family still ran the property and dealt with the day to day operations.

The widow of the commercial builder has now passed and the family is learning that property taxes, income taxes, and basically everything has not been reported for the last 20 plus years.

The family that inherited the building wants out of the situation but is not sure what the best approach is and I think it could be a opportunity to get a great deal but do not understand all the up front things that have to happen before I can buy.

Can anyone give me some guidance on what to do?

Thanks,

Ryan

Mendy, Thanks for your thoughts and questions! We do plan to make this a single family. The goal is not to hold the property after rehab but sell the home. If we couldn't sell at the right price we would rent. We have not been inside the house yet so I would say that is why we have a large number for a rehab. I think we are trying to find the nice medium in making the house enjoyable for us while also trying to set ourselves up for a good jump for our next house. Our rehab numbers are very rough right now and we have not received any bids yet. From that perspective we think it will need and we will want the following: -From the outside the house the foundation looks okay - the owner said there is no mold issue - the porch needs to be jacked up and repainted - new flooring on porch - It doesn't have central air we would add - we are considering putting in different dormers due to a side of the roof sinking next the current shed dormer. We think it will look better (not needed but my wife wants it and I agree it would look better. We allocated 20,000 for this. This is dependent upon our permit and also a historic society approving the update. The shed former is sinking on one side so it will need to be repaired regardless. - will need a new roof - will paint exterior of house - will have demo inside to remove walls and make single family home - will change 2nd front door into a window - Will replace the second new window and leave the rest for now. - we budgeted $30,000 for a complete new kitchen. We know this is a over the top rehab but it is important to my wife. There is a lot that goes into this number. - we will refinish the wood floors - new light fixtures - new electric more than likely - new plumbing more than likely - new front and back door. - plan to rehab one bathroom and leave the other for now - will need to convert one kitchen to a laundry room area As you can see some of these are more want than need so that is where the balance begins. Our plan is to try to do as much as we can that is legal haha.

Scott, Thanks for the thoughts. Our plan is to live in this house for 5 plus years depending so we have that as our exit plan. It is in a great place for rentals and we believe we could rent the house for 1,200 plus. We took a conservative approach on the rehab numbers and took the approach that we did not do any of the work. We plan on doing as much work as we can that makes sense in the first 3 months before we move in but we wanted to stay as conservative as possible. So 20,000 in my mind at this point has great potential to grow. For investing we plan on maybe using a HELOC after the house is complete. Our main focus right now is trying to get some gains on the rehab while having a great first home. Thanks again for your insight!

Hello all,

Background:

My wife and I were recently walking around one of our favorite neighborhoods and some of our friends gave us some info regarding a house on their street. It has been vacant for 1 year due to a older lady having to move out of it and live in a nursing home. We believe it will be a great fit for us and our family and would like to put a offer in on the property. We have not seen the inside of the house however I have looked it up on PVA and we have talked with the POA. It is 2,200 square feet, 2 full bath, 4 bedroom, no basement. It is currently a duplex with two kitchens. We believe it is 2 bedroom 1 bath on each apartment. The house was originally a single family home. 3 offers have already been made on the home 125,000 and two offers for 150,000 (both contractors) and they were all turned down. We are the first family to put in a offer and the seller has said they would like to sell it to a family. We would like this to be our primary residence and would plan on living there 5 plus years.

Additional Background:

The POA has said they are going to hold the house until they are positive their older family member will not move back in. She said it is highly unlikely that she will move back and that it may be around 6 months or so before they actually are ready to sell. We would like to lock in a written offer contingent upon the elderly family member not moving back and want to make sure we are considering everything we need to for the written offer. We have told the POA we would give 155,000 and she thought that was reasonable however the elderly woman is still making the decisions for now so she could not say "write it up".

Questions:

1. My first questions is I have never created a written offer and I cannot seem to find one on the forms/templates. So I would appreciate any direction on this regarding what should be included from a legal perspective. In addition, what does a written offer actually guarantee legally? Is there a better way to go about this?

2. We know our written offer needs to have contingencies based on the situation and I am considering the following: 1. it will be contingent that the elderly woman does not move back in. If she does the agreement will cancel. 2. It will be contingent upon an inspection 3. Anything else we should consider or have in place before the offer is signed??

3. We currently have 67,000 cash and are looking at the different types of loans we can do to rehab the property. I plan to go into deeper depth in another post regarding our rehab estimates (we believe $125,000 is needed because it is in bad shape and similar houses on the street are selling or  around $300,000 plus) but I wanted to get thoughts on the best way to finance it. Should we get a one time construction/rehab loan and build it into the mortgage? Should we get a 155,000 loan and then open a separate loan for the rehab? Should we phase the rehab and just save or cash (would love for someone to convince my wife of this haha)? Other ways??

All input is appreciate as this is our first home purchase so we would like to turn over every stone so that we do not put our self in a bad position.

Regards, 

Ryan

Hey everyone,

My name is Ryan White and I live in Lexington, Ky. I have been interested in real estate for a long time and Bigger Pockets has pulled me in to really wanting to make this concept a reality. 

I am married to one hott little lady named Kate and we have two children, Talulah and Harrison. I currently work as a risk analyst within Treasury Management Banking.

Me and my wife plan to buy our first home soon and then begin to invest although I have a good feeling our first house may be rehab project! So, I think Bigger Pockets will be a great support in that process. I will plan to invest while having a full time job while my wife will work part time.

On a goal level, I believe we will flip until we get enough cash to hold properties unless I jump into some creative financing. We would like to have $6,000 a month in passive income within 10 years. After that my wife and I will decide what the next goal will be.

In addition, I am currently studying for my CPA and I am considering what area I plan to be a specialist in. I would like for real estate to be a main area of focus along with audit/security awareness.

That is a little about me and I am glad to meet everyone!