All Forum Posts by: Burt L.

I certainly appreciate the replies. I've also retained a land-use attorney and am meeting with them upcoming. 

The difference in value can be substantial but the only real way to know is to simultaneously list a property as a combined sale and as separate sales and be careful about what offers are accepted as its the last chance to choose one method. But the sum of the parts is almost always always worth more than the whole. 

I will take a look at the cooperative method also, as that could work with a single non-profit owning the structure and selling shares. It would probably meet resistance as people aren't familiar with it here, though I've found some "62 and over" communities here. 

I don't see a category for it in the MLS so the more familiar Condo approach would be preferred but it is interesting. I'm still working the phones and speaking to lenders, etc.

In addition to a large security deposit to keep him honest, I'd offer him a one-year lease that can be renewed, if both parties agree to renew it - to keep him honest again. 

I wouldn't sweat being under market rent a little bit on a good deal. If you have to update that unit have it vacant at least a month to re-rent you are still ahead on being a little low on the rent and cash may be low after the purchase as well. 

Get a big security deposit. I was in the same situation on a 4-plex and got $5K Security deposit as he would have more leverage to create problems than any other tenant. 

My former owner was the nicest guy- who this fellow doesn't sound like. This guy was so lonely that he took in a person off the street and then family members that I had to evict as they weren't on the lease. Then he moved out suddenly to get  a place with his ex-wife who came around again to use him yet again to do things around their new rental house and take care of here disabled sister. Hope I don't end up that way at age 75 with my ex-wife! The owner carry loan was pretty cool though. 

Swing a big hammer with a big deposit, if doing it -he will have the cash. Mine was held at the title company, but I had the right to determine what to do with it, if problems. 

BP Nation- I've been speaking with many mortgage brokers and haven't been able to  break through in the least. 

I have two 4-plex's on lots next to each other in Colorado. They were built in 1948, fully permitted and have separate electric and gas metering and share water and sewer service. They are reported at the Assessors site as 4-plex's and the zoning supervisor has confirmed that they are legal but now non-conforming as the zone district was later changed to duplex zoning  and are thus "grandfathered-in" and can continue in their use as 4 units for as long as desired. 

For me to convert to separate legal descriptions and sell them individually at better valuations, the end-buyers of course would have to get separate loans. There is a clause in the zoning code - that is common in the greater metro area cities here and probably nationally, that if less than 50% of a structures value is lost due to fire, etc, that the structure can be rebuilt to its present use of 4 separate units. But if damage exceeds 50% of the structures value, then it could only be rebuilt to its new zone district rules, which only allows duplex's now. 

If the hypothetical fire, etc damaged more than 50% of the structure's value, then two of the future Condo owners could not have their units rebuilt and the remaining two could have larger units. This same language is commonplace, as is the presence of non-conforming structures as zoning codes everywhere get changed from time to time. 

Whenever I speak to mortgage brokers, they say that two of the future condo owners wouldn't have collateral for their loans and I wouldn't be able to offer owner-financing on it either. I've also been told that after it is converted to Condos that its unlikely an appraiser would check the zoning for an individual condo loan but that's not a wise thing to base a project on. 

I would have to make disclosures to buyers that 2 units in each building couldn't be rebuilt in the over 50% casualty scenario. I would likely have to find a way that their interests would be bought out by overinsuring their units to fund a buy-out as their part ownership in the land can't be insured,  and all could lead to a possible huge problem years down the road. 

I have to obtain a "Lenders Letter" from the County on what the "Rebuild Rights" are for the individual owners and have been told it will mirror what's in the zoning code on rebuilding a damaged structure - the same 50% language. 

Is there something I am missing or another way to make this work? Local zoning authorities have the ability to damage an investors fee-simple ownership rights - so to speak - and there is another duplex in another local metro city I have the same problem with.

Condo Conversions don't involve county government and are done through the state-level Common Interest Ownership Act by recording a condo map, declarations, and bylaws to create separate legal descriptions, which the Assessor then puts in its records. 

Any suggestions out there on how to execute the much-better strategy of separate Condo sales despite the 50% stipulation on the hypothetical fire situation?

Been trying to wholesale an MLS property with a huge margin that most people run from as it needs a wall re-bricked and floors leveled on one side of the building. People don't look at it as just another check to write for an already-quoted figure, but get an emotional reaction.

I have a better buyer who understandably wants a structural inspection on the Friday Morning and I know for fact he's an ultra big buyer though this is our first deal, but may or may not take the deal after the structural inspection.

On Thursday, going to show the prop to some buyers another wholesaler brought, and they already want price reductions without even seeing the property. I suspect it won't go especially well and I still have the other buyer interested, though not a certainty without the inspection.

As its an MLS property, and I have it offered at list price after it just had a big price reduction and I got it below list, I can say there are back-up offers above list, and certainly have lost properties for just that reason on MLS properties before.

I could suggest these buyers come back on the Friday, and then they'll realize they aren't the only buyers involved and can't name their price. Conversely they may take it without further inspection as its already at 46% of ARV and the quote to fix the foundation is $11K and the ARV is $1.0M on strong comps. After the brick and floors are corrected its just a straight fix & flip.

Most people get an emotional reaction to the uneven floors and bad brick on one wall and don't see it as just another to check to write - quite similar to a Meth house response.

What's a good way to handle lowball buyers throwing their money around and demanding price reductions, even though its already an on-fire deal? Once the price starts to slip, it doesn't stop.

Suggestions are appreciated.

After a split and fix, the ARV will be $620,000-$630,000. Investors only - no listing commission or buyers brokers fee will be paid, no exceptions. 

Arvada Brick Duplex near Olde Town Arvada. Larger side is 3/1/2 car with 1130 sq ft. Smaller side is 2/1 measuring 785 sq ft.

Property works as either a split and flip or a rental. Or rent now and split later.

Both sides have replacement windows with vinyl eaves and property is on well water and city sewer so no water bills. Both sides have hardwoods with larger side being carpeted over. Roof is older performing without leaking. Larger side has two-car garage on its side of the smaller unit has a large shed. Smaller side has replacement cabinets.

Lot is 19,000 ft total so over 9,000 per side and the street has light traffic. Not many duplexes have been split in Arvada, so not a great deal of comps but they do well when available, as at 6245 and 6247 W 53rd Ave for much smaller 1bed/1 ba half duplexes for $270K and $275K of just 604 sq ft each on 9,000 ft lots each, in a lessor Arvada neighborhood, as one example. More comps below.

Hard to get into a rehabbed single family near Old Arvada for these prices, so side-by-side ranch duplex is next most desirable construction style as opposed to clusters of close cottages or condos with neighbors above and below, etc.

Splitting into separately salable units is what creates the value and two separate sales. Splitting costs 10K and takes 4-6 weeks, or leave it as a rental. I've split 25 plus multi-family properties and addresses of many prior splits are available, if needed. See the comps below, as each side of the property is different. This property is superior to the comps in lot and location, and superior to most in construction style. Price is $395K . With a split and fix, the ARV is $620-$630K. See detailed comps below.

Phone is 720-295-428nine. Please call for more info, pictures, addresses, etc.

Comps to 3/1/2 car gar side:

6504 Ralston Rd #3 1168 up/500 bsmt. In a 3 plex with $150 mo HOA. 2 car gar. No updated. 2 dom. $342K

5295 Cody St. 1227 ft two story. Half a duplex in HOA of a dozen Duplexes on 3000 ft lot, 1 car gar close to busy 52nd Ave. Not updated, 6 dom. $320K

5270 Cody St. 1226 ft two story. Half a duplex in HOA of a dozen Duplexes on 3000 ft lot, 1 car gar close to busy 52nd Ave. Not updated, 3 dom. $320K

4640 Garland St. 1220 ft ranch, lesser neighborhood, 6 mos old, updated with formica, 1 car gar, 19 dom, $317K.

Comps to 2/1 side:

9780 W 41st Ave. 904 ft ranch, lesser neighborhood and construction style, good update, 7 mos old, no gar, 6 dom, $290K.

9340 W 45th Ave. 827 ft ranch. lesser neighborhood and updated to formica. 7 mos old, no gar, long dom, $285K.

6245 W 53rd Ave. 604 ft ranch, 1 bd, 1 ba,much lessor Graves neighborhood, good fix, 9000 ft lot, 1 car. 20 dom, $275K.

8752 w 46th Ave. 827 ft ranch, lessor neighborhood, flood zone flood insurance required, good fix, no gar, 11 mos old, 5 dom, $275K

6247 W 53rd Ave. 604 ft ranch, 1 bed, 1ba, much lessor Graves neighborhood, 9000 ft lot, good fix, 1 car gar. 28 dom, $270K.

I have this property under a valid contract and am selling a contract to purchase. Good deals are found around a holiday, when other investors are distracted and playing catch-up.

After a split and fix, the ARV will be $620,000-$630,000.

Arvada Brick Duplex near Olde Town Arvada. Larger side is 3/1/2 car with 1130 sq ft. Smaller side is 2/1 measuring 785 sq ft.

Property works as either a split and flip or a rental. Or rent now and split later.

Both sides have replacement windows with vinyl eaves and property is on well water and city sewer so no water bills. Both sides have hardwoods with larger side being carpeted over. Roof is older performing without leaking. Larger side has two-car garage on its side of the smaller unit has a large shed. Smaller side has replacement cabinets.

Lot is 19,000 ft total so over 9,000 per side and the street has light traffic. Not many duplexes have been split in Arvada, so not a great deal of comps but they do well when available, as at 6245 and 6247 W 53rd Ave for much smaller 1bed/1 ba half duplexes for $270K and $275K of just 604 sq ft each on 9,000 ft lots each, in a lessor Arvada neighborhood, as one example. More comps below.

Hard to get into a rehabbed single family near Old Arvada for these prices, so side-by-side ranch duplex is next most desirable construction style as opposed to clusters of close cottages or condos with neighbors above and below, etc.

Splitting into separately salable units is what creates the value and two separate sales. Splitting costs 10K and takes 4-6 weeks, or leave it as a rental. I've split 25 plus multi-family properties and addresses of many prior splits are available, if needed. See the comps below, as each side of the property is different. This property is superior to the comps in lot and location, and superior to most in construction style. Price is $395K . With a split and fix, the ARV is $620-$630K. See detailed comps below.

Phone is 720-295-428nine. Please call for more info, pictures, addresses, etc.

Comps to 3/1/2 car gar side:

6504 Ralston Rd #3 1168 up/500 bsmt. In a 3 plex with $150 mo HOA. 2 car gar. No updated. 2 dom. $342K

5295 Cody St. 1227 ft two story. Half a duplex in HOA of a dozen Duplexes on 3000 ft lot, 1 car gar close to busy 52nd Ave. Not updated, 6 dom. $320K

5270 Cody St. 1226 ft two story. Half a duplex in HOA of a dozen Duplexes on 3000 ft lot, 1 car gar close to busy 52nd Ave. Not updated, 3 dom. $320K

4640 Garland St. 1220 ft ranch, lesser neighborhood, 6 mos old, updated with formica, 1 car gar, 19 dom, $317K.

Comps to 2/1 side:

9780 W 41st Ave. 904 ft ranch, lesser neighborhood and construction style, good update, 7 mos old, no gar, 6 dom, $290K.

9340 W 45th Ave. 827 ft ranch. lesser neighborhood and updated to formica. 7 mos old, no gar, long dom, $285K.

6245 W 53rd Ave. 604 ft ranch, 1 bd, 1 ba,much lessor Graves neighborhood, good fix, 9000 ft lot, 1 car. 20 dom, $275K.

8752 w 46th Ave. 827 ft ranch, lessor neighborhood, flood zone flood insurance required, good fix, no gar, 11 mos old, 5 dom, $275K

6247 W 53rd Ave. 604 ft ranch, 1 bed, 1ba, much lessor Graves neighborhood, 9000 ft lot, good fix, 1 car gar. 28 dom, $270K.

I have this property under a valid contract and am selling a contract to purchase. Good deals are found around a holiday, when other investors are distracted and playing catch-up. .

I have a 4 plex that I am buying on a 20 year owner carry with 7% down. It is due to close tomorrow and a tenant eviction hearing is the following day and there is no security deposit in place for the problem unit.  

The seller lives next to the problem unit and is of course quite focused on the eviction. He let someone he trusted move in next door without a lease as that person does work around the property for him, and that person let someone else come in and had a quickly broken relationship with second person, and that second person let a third person come in with a new relationship with second person. The first person isn't a problem as a friend of the seller and is about to move as the third person is physically intimidating though only the second person is named in the eviction, for non-payment of half of the verbal lease agreement.  As the settlement statement current is, I am withholding $5K as a security deposit until the seller vacates in 30-60 days with a post-closing occupancy agreement, before I knew of the problem tenant contesting a pretty clear-cut eviction process for non-payment. 

My concern is that the unit under eviction will be heavily damaged with no security deposit and insurance doesn't cover tenant damage, though a criminal act. I walked though using a home inspector last week and no damage to date. 

I would like to close tomorrow as the deal is favorable and the contract expires tomorrow and the seller is more focused on the eviction and wants out. He had played me pretty successfully against other investors before and I so I am leery of extending as he is ready to close though I am confident he is also willing to extend. Thus far he hasn't consulted legal counsel though he has mentioned it - but he has been transfixed on the eviction.  I am concerned an attorney might try to talk him out of doing an owner-carry or create other closing difficulties. 

Some of the options I see are to extend the contract or increase the security deposit significantly and  have it include the unit in question. Maybe there is something else I am missing, as I am "too close" to the transaction, similar to the seller being too focused on the eviction as he lives next door to all the drama. 

With the eviction order in hand, the seller doesn't have to communicate the property was sold and can continue the process without me restarting the process, though my attorney said I could do a 'substitution of plaintiff" if I wanted. 

I really would like to get this closed but have the unknown of having a destroyed unit without a tenant security deposit in place. Is there something else others might suggest?

I think its going in the right direction then; the owner will be 78 years old in year 5, and I believe he will want the income for another 10  years or so. Not sure I want to be paying a rate of 10%, after year 5 though.

Had a call this morning from a fellow with two larger duplexes on the same lot, in a strong rental market and principle amount well under market price.  I bit usual layout as its set back from the street with its own access lane and backs to a large apartment building and has taller wood fencing, but the owner has lived there for 12 years and is 73 now and tired of playing landlord with his neighbors/tenants - he has the usual tenant adventures going on right now, such as an eviction and probably isn't a thorough tenant screener. The lot is 21,000 ft.

He has said he has another offer to owner-carry but doesn't like those terms and especially a 30 year carry at his current age,  and can I do better? Of course I don't want a back and forth auction type of scenario. 

 The other party offered him $40K down and a rate of 4.2% for the first 5 years, and then 10% after that, fully amortizing after 30 years. 

He wants a little down more down payment and more income in his 70's while he gets around better. Says the 10% sounds good later, but I doubt he will ever get that, and I suspect they will cash him out at five years or so, but I dont know that offering skepticism on that is helpful. He says 30 years is too long a term  and doesn't want his heirs to have to continue to deal with this. 

Looks like I increase the down payment and the initial interest rate, but certainly don't want to pay 10% after that either. Perhaps 5 years at 5.5% with more down payment, then switch to a remaining 25 year amort at a higher rate, with a balloon at year 20? There are so many ways to approach it and I don't often go deep into the amortization schedules. More than five years before the payment increased dramatically would be helpful though. 

Never had an owner carry before, after many tens of thousands of wholesaling mailers. Looks like a good one - would others have any suggestions on how to structure this better and meet his needs? I am meeting with him tomorrow night; the property is owned free and clear.