All Forum Posts by: Stephen G. Wolff

I build a base amount into the lease and add a bill back over $XX provision. The reimbursement is made within 30 days. For example if the rent is $2000.00/month and the water bill has averaged $60 then I sent the rent at $2075 and bill any overages. I use a small buffer to eliminate the need to bill back. 

Remember there is a look back period for any benefits received from the government. I do not care to pay for it nor provide advice on how to perpetrate a fraud. Buy the house at fair market value--listen to the advice from the attorney.

We need to know the disposition of the property and mortgage. Has the property been titled in the new owners name? Did they assume the mortgages?

If they hold title, contact a local real estate professional and list the property for sale. When the sale closes the title company will satisfy the mortgages and disburse the proceeds. Make sure someone is paying the mortgage(s).

Without being an employee (W2) of the owner, have an ownership interest, or poses a brokers license you would be managing it illegally in the state of Minnesota. Happy to help further if you PM me.

when figuring out if the property cash flows, be sure to use a tax basis of the sale price. This will help you account for the potential of under calculating real estate taxes. Long live cash flow.

A balloon in three years may put you in a bad situation. I recommend you put in 5% and the seller take a carry back note and you secure long term fixed rate financing (traditional). The carry back note could be 7-8% with a 20 year term fully amortized. Back of the napkin math may work, but if I was the seller you do not have enough skin in the game to make it work. Perhaps you could purchases an option and come up with the rest of the cash for traditional financing...

Pay mom in full. End of decision.

If you are still interested from a control standpoint, it can be done by asking. Typically you will pay an extra 0.125 or 0.25 interest rate. I have traditional financing under these terms with the big 5.

You can ask for any concession; however gaining agreement may prove difficult. @Sherry Gao gave good advice that the negative cash flow is a sign. Its ok to pass on a deal that is not right and wait for a better opportunity. Would you rather have a portfolio of high performers or one filled with underperforming assets? 

No, yes. The lease stands and you should negotiate with the distressed seller prima facie. Another option is to convince the seller to that they should negotiate a buyout of the existing lease and you then could obtain the property on month-to-month terms. It may be cheaper for the seller to give them a free month rent in exchange for voiding the existing agreement. However, you lose in this scenario you are the bad guy and jack the rent up.

Lose-lose consider passing.