All Forum Posts by: Ryan Cheung

@Jay Hinrichs From my understanding, the original tax lien was around $100,000, and the sellers were able to negotiate it down to the $66k.

I will indeed be using a 203k loan, and live in one of the units. 

Since the sellers have already negotiated down the tax lien, I'm not sure if there is any additional room for negotiation. 

Hello,

I went to see a home in North Bergen today that is listed as a 3 family home. However, the agent said that it can be legally a 4 unit home, with an additional unit in the basement. This house is at a good price, but when we arrived, the agent mentioned that there is a $66,600 tax lien on the house. What are my options for dealing with this? Would the only solution be coming up with the cash for the lien before I can move forward with the FHA just the price of the home? The following are some of the numbers on the home:

Asking Price: $325,000

Tax Lien: $66,600

Renovation: $50,000

ARV: $480,000

Rental Income

Unit 1: $1,650(Unit I will be living in)
Unit 2: $1,650
Unit 3: $1,100
Unit 4(Unit to be added in the basement): $950

Total Rent: $5,350

Taxes: $11,600

I think that most likely, I will have to pay cash for the lien before we can go forward with the FHA loan on the actual purchase price and rehab of the home. Since I do not have $66,600 in cash for the lien, does anyone have any creative financing strategies that I could potentially use to pay off the lien and purchase the property?

I denied the tenant and lowered the price, and immediately the following day my agent showed the house to another family who is willing to pay the $3000 asking price. They also have two small children and are looking to stay long term, and are able to move in on August 1st, so we will not have another month of vacancy! Thanks everyone for all the great advice!!

Thanks for your responses everyone! It seems that you all have the same decision, so I will pass on this tenant. Thank you for all of your guidance and support!

@Luka Milicevic We have been fixing it up during this month and we have lowered the rent today, so hopefully we will start getting more interest. With regards to fixing it up, we replaced the old fridge and dishwasher with brand new stainless steel ones, and removed the old carpets from the bedrooms which have nice hardwood floors underneath. I personally think the property is quite nice, but we will see how future prospective tenants react.

@JD MartinWe have only recently started renting out this home since last year. This used to be our personal residence until June of 2015, and we found a tenant who paid $3200 per month, but unfortunately had to leave after only one year. However, finding new tenants with the same price has proven to be a challenge, and with the end of summer coming, it seems that our window to rent out the property is closing due to schools starting soon, forcing us to lower the rent to $3000.

Thanks for all of your responses. Very helpful!

So I have lowered my asking price to $3000 per month. The tenant in question is offering $2900. My house is in a pretty high income area in Bergen County in New Jersey. I could definitely take another month of vacancy and have the funds leftover to cover the costs, but my main dilemma is whether I want to sacrifice $3000 (vacancy) or $1200 ($100 lower than asking x 12 months). However, it seems that the majority of people here are saying that it is worth taking the loss in order to find a better tenant.

I will run the actual tenants history through Smart Move and if it comes back very weak then I will have to deny them, even though they have a strong cosigner. Is this is the best course of action, or should I just deny them outright? Thanks!

Thanks for your quick responses!

What if I were to run the actual tenant through SmartMove and he did not qualify, and have his qualified brother as a cosigner. I would also ask for 2 months security deposit instead of 1.5 months, as well as 3 months rent upfront. Do you think that would help negate the risks? It seems that I was a bit over market value, which is why I was having difficulty renting the place out.

@Account Closed Yes I have. I ran his brother's name through SmartMove, and everything seemed to have checked out.

It appears as if his brother's name will be on the lease (not as a cosigner). Is it unwise or even legal to have someone's name on the lease who does not live in the property?

Hello,

I am currently in the process of finding a tenant for my home. We have had one month vacancy while searching for a new tenant, so I am looking to fill the home as soon as possible. A tenant who is interested in the property is offering $200 below my asking price, and his credit is not that great. However, his brother, who will NOT be living in the home, will be a cosigner on the lease, and his credit is good. Although they are offering a lower price than I asked for, should I wait to find a tenant and have another month of vacancy, or should I rent to this tenant who seems somewhat risky for a lower price? Any input would be of great help. Thanks!