All Forum Posts by: Sergey A. Petrov

I suppose it is even more interesting then… I know there are eminent domain and implied easement laws and other things. But at the end of the day, your line is on someone’s property. It is still your line that is very old. Using the classic car example, I am going to put mine in your driveway. I want you to do nothing with your property that could potentially damage my car. If you do, you should pay for my car but I am not moving it out of the way of whatever it is you want to do with your property. After all my car has been sitting in your driveway for 50+ years and still has a few more years to go before it falls apart. Or play nicely. It is your line, work with your neighbor but now I almost feel it is 100% on the owner of the sewer line vs a split. Easement or no easement, utilities cross all the time. The responsibility to maintain, repair, and replace remains with the owner of that utility unless of course someone intentionally damages it. And somehow a potential damage to a very very old utility that happens as a result of normal construction work doesn’t fit in that box in my head. Look at it as an opportunity to move the line (or replace) especially if something is about to be built on top of it thereby hindering your future access to it. 

@Pierre E. and @JD Martin, thanks to both of you. Might be worth exploring. I do think i have a bunch of passive carry overs every year..

You are on a shared line. You knew that when you bought the property. At that time, you should have either looked for a cost sharing agreement (likely does not exist), spent $10k+ in legal fees negotiating one and having recorded, or accepted it as is. You accepted it as is. Generally speaking unless there is something to the contrary you each pay 50% when something needs to be done regardless of who initiates it. I own one of those as well and accepted it as is instead of making it formal. The cost benefit analysis makes sense - you already know it is old and will need to be done and will be expensive so know you’ll likely have to pay soon. You can have attorneys negotiate but that doesn’t change the fact that you’ll still have to pay. Why not just pay half the repair price vs half the repair plus some legal fees to have it in writing that you’ll pay half. That was my thinking.

Consider this (I did and ultimately decided not to take that route) - abandon and cap the existing sewer line and run your own to the street. No more dealing with shared utilities…

@Greg Scott thanks! Agreed fractured condos are no fun! And yes execution and ability to sell them will be key. Seattle market is softening but things still move. Suppose it is a risk benefit analysis since my crystal ball seems to have run of batteries 😁

Here is an interesting one that I’ve toyed with over many years but never actually pursued. Any thoughts would be greatly appreciated.

generally speaking, individual units get a higher sale price than multi family on a per unit basis. So if you have a 4-plex at $1m each unit would be $250k. If I comp those four units individually (like for like with all things considered) they might be worth $300k.

I am very familiar with apartment to condo conversions and what all that entails. That is NOT my question.

Every once in a while you see these 4-8-12 unit complexes that were built and initially setup as condos but have been owned and operated (and bought and sold) as apartment complexes for years and years and years. So this would not be your typical conversion. They, legally, already are condos.

What am I missing? Buy for $1m, spend some money “re-establishing” the condo association and sell them off at $1.2m. I am a pro at condos and have the right team in place to get the legal, insurance, financial, etc matters in place fairly quickly and easily. The above $1m to $1.2m is hypothetical and I am capable of calculating the holding costs and the selling expenses. Every time I come across one of these and run the numbers they make sense and come ahead of any other short term play. 

There must be something I am not seeing…any words of wisdom? Has anyone done it? Thanks in advance!

@Ryan Lehman & @Matthew Addison - First Tech was one of the ones I talked to as well. 90% is on primary. 80% is on investment.

Sent you a private message 

Quote from @Jeff Halverson:

@Sergey A. Petrov Thanks for your thoughts!  I have definately tried reasoning with him.   During the remodeling phase, he told me he will never accept short term rentals and will fight this...

Well in that case, dot your Is cross your Ts on the compliance side, tell the neighbor to stay off and away from your property and that they / their attorney should direct further inquiries to your attorney (or your manager if they are up for it; most likely not. I’d want to “shield” my manager from this as well)

Keep the house and rent it for now. You have 3 years before you start worrying about capital gain taxes. The market is softening (Portland included although I am in Seattle and not super up to date on Portland). You'll likely get more for the house when the market bounces back (hopefully in under 3 years). You'll likely get less for the house now than you would have just a few months ago. Keep your existing low rate mortgage untouched. If you need cash for the next house (or an investment property be it a single family home, a duplex, or a four plex where you occupy one of the units), get a HELOC for now and watch the markets. A permanent refi might make sense if the rates come back down (personally I doubt they will in the couple of years), pay off / pay down the HELOC over time if you want, and keep on going. You already have a leg up with your sub-4% leverage rate.

First, I’d make sure I am in full compliance with local regulations so that there isn’t a “case” against you.

Second, I’d try talking to the neighbor, let them know you very much care about your property and the neighborhood and will do your best to make sure your tenants (short term or long term) do not cause any issues for anybody. I’d give them my contact information and encourage to let me know if they observe any issues (again, because you don’t want issues and issues are a bad thing for all involved).

More often than not, people are reasonable. If you find that there truly is no reasoning with your neighbors, yes get an attorney, stay compliant, and do what you do best. And hope the neighbor isn’t unreasonable to the point of knocking on the door, disturbing your guests, or doing something crazy. If that starts happening you might have a “case” against your neighbor. Won’t be a pleasant experience but we do face those here and there.