All Forum Posts by: Stephen Richardson

Came across them in Marion, IN. County info. Also, here's a link to their CL listing as long as it'll last. https://kokomo.craigslist.org/reo/d/marion-in-3-beds/6405671804.html 

Here's a quick update. Seller is permitting inspections prior to signing. No EMD. No down payment paid before signing. Just a verbal agreement on the contract prior to inspections commencing. It looks like there are some revisions to the contract that need to be made on both ends, so it was probably a legitimate oversight when the contract was drafted. Stay tuned...

@Matt Horwitz - I found LLC University a few minutes ago and was searching BP for reviews on the site. Thanks for being available on BP! 2 questions:

1) I'm forming my LLC in Indiana. I can set it up as a single owner, or I could include my wife in it. Do you recommend where I could find a reasonably priced operating agreement that will hold water if I get sued?  Or, is the state template good enough? 

2) Your site is really cool. I have to ask... how do you make money teaching people to form LLCs on their own? 

@Brent Coombs - I was wondering when someone was going to catch on to their in-house PM software being partially broken. Yeah, the shroud is definitely suspect. They're going to have to shed some light or hang on to the property until someone more gullible comes around.  

EMD (earnest money deposit, right?) hasn't even been mentioned in this deal. This is really good food for thought as I negotiate further.

@Caleb Heimsoth and @Mike McCarthy - I replied to you guys above, but it didn't apply the tag. 

@Caleb Heimsoth

Gents, thanks so much for taking the time to respond. This BP community is so cool. You've really reinforced my resolve to get some kind of "pending agreeable inspection clause." 

@Caleb Heimsoth - Thanks for the feedback! He's selling to get better economies of scale with larger properties and with higher rental values. The property class is as low as you can go before beginning to accept section 8. The property is currently 100% occupied and none of the units are section 8. 

@Mike McCarthy - Exactly! I like your suggestion of the dollar amount. Half of the units have been remodeled this year - new flooring, paint, cabinets redone, bathrooms updated. The other half are going to require $1-2k each of updates and that's doing the work, depending on how much work I do myself. So, I'm fine with updates and remodels. Frankly, room to add value is something I seek. BUT - what if there are structural concerns with the roof, foundation, or wood destroying insects? HVAC isn't much of a concern because it's all base board heat + a wall unit for A/C. Setting a dollar amount and limiting to structural might be a good compromise. 

@Darren Budahn - Thanks for responding. I'd be interested in any drawbacks you see in a land contract scenario. I'll be reviewing the contract with my attorney (when/if I get the seller to agree to putting a better inspection clause in the document) and I'm putting together a list of things I'd like addressed before I meet with him. As far as equity goes, it appraised for $390k in 2015 when average rent as $390/mo. I am buying at market value, but since the appraisal will be commercial in nature, value will increase as I improve the 6 remaining units and raise the rent. That said, I'm basing this on the assumption that base employment in the town won't fall out and the rental market with it. 

@Brent Coombs - Great questions! 10% seems to be the going cap rate. This one is around 11% - largely because of the remarkably low down payment. I appreciate the reminder of strength in the "walk away" position. If I understand your "why is he selling" question correctly, my answer would be that he would eliminate the operating costs of the property during the owner financing period and receive market value for the property in 45 months. Lastly, I asked for historical rent records, but their in-house "PM software is not reporting that right now." 

@Michael Plante - Thanks for the affirmation that an inspection is needed!

I'm working on a deal for a small 12 unit apartment property. Units are 1bd/1ba 500sq ft. Avg rent is $420. Cash flows $1800/mo at 100% capacity. Seller is an upstanding member of the community with 400 units and growing. We've verbally agreed on a purchase price, a down payment of 3%, and a balloon in 45 months. He had his attorney write up the contract. His agent showed me 3 units. The contract allows for an inspection, but does not give the purchaser an exit from the contract should the inspection be unsatisfactory. I understand my position is not strong in this deal and should the inspection come out well, I'll be walking away with a good deal. However, I'm reluctant to sign on a property without having an exit route should I uncover more repairs than I'm ready to handle. 

Are my expectations set too high for the contract to have a "pending an agreeable inspection" clause? 

@Rick T. - I just submitted an inquiry with PayLease. I'm particularly interested in their CashPay program and would like to accept cash payment at the local Walmart. Can you expound on any of their fees and business requirements, specifically if they require you to be an official business entity (e.g., LLC, Scorp) and if they have a unit minimum. I'm currently at 13 units and am looking to save time on those pesky cash payments.

Hi, everyone! Is anyone planning to attend the CIREIA meeting next week? I'm newer to IN and have never been to a REIA meeting. The BP podcast is always recommending REIAs as a great place to meet people in the RE game. Would anyone personally recommend the CIREIA?