All Forum Posts by: Patrick L.

 Well in that example you might also need to budget another $300k+ to repair and stabilize the property.   That would need to come from you or your partner, in cash.   Once stabilized for a year or so you could refinance it and cash that money back out or sell the property now that you've added value. 

If it's at 60% occupancy you're going to be coming out of pocket every month to make your mortgage and other overhead until you increase occupancy. It'll also most likely be neglected property that will require a large cash infusion for CapEx and updating and making the vacant units rent ready. If it's at 60% occupancy it's either because the property is in disrepair or there are market issues keeping tenants away (war zone, poor local economy, lack of local demand for property type, etc). On a distressed property a down payment is only a small portion of the cash outlay, the repairs and reserves will probably exceed that amount.

 He said the owner lives in California and implies the owner is not local.  I'm guessing the apartment complex is in OK.   

Your 0% loan would be terrible for the seller tax wise.  If the interest rate is too low (or 0) the IRS will charge an imputed rate to the person holding the note (I believe it's around 3%) and they will be taxed on that theoretical interest as income (even though they received nothing).     Also no monthly payments is a pretty odd arrangement.  More fair terms would be interest only at a reasonable rate with a balloon.  

When I list a house on MLS in a hot market like this I generally list it on Friday morning. When offers come in they're informed that the seller is out of town for the weekend and will review them on Monday. On Monday morning my agent lets everyone that made an offer (and any other agents that have expressed interest for the clients) know that we have multiple offers (because I always do at the price point I like to operate at) and the seller will be selecting the best offer at the end of the day. When I do this with houses around $200k I get 20 offers, most over asking and go with the strongest offer (considering both price and terms/financing) )

You won't find a great deal on MLS in a hot market. If you buy the house that means you were willing to pay more than 25+ other buyers. A seller or agent with half a brain isn't going to jump on the first offer that comes in just because it's first when the market is hot and there is a ton of interest in the property. They'll do what I do and buy time and wait to see what the other options are.

The only deals I've closed this year were with off market distressed properties with problems that I could solve for the seller. I haven't touched MLS in 2 years for a purchase.

Sounds like a litigious tenant, I wouldn't agree to any of those.   If it's a prospective tenant move on now.  

Are you sure the contractor you hired is even a licensed contractor?    If he is then great, you can give his name and license number to the inspector and he can do whatever is necessary to get the work cleared up and permitted.   If not then this is going to be a big headache on you.    

This is also a lesson for you, you need to learn to stay on top of things.  As an investor you need to verify that what is being done is what you paid for.   If the buyer can look up the permits then why didn't you?   Here I can see everything online, permits, inspection times, inspector's comments, etc.   I don't issue final payments until I verify that the permits have been closed.   I also verify that the contractors have pulled the permits when they are starting the work because as the owner I am going to be the one with the issue if the property gets nailed for work without a permit.   

At this point you're going to have to pull after the fact permits.   I don't know about your city but those are generally far more expensive and if some of the work needed to be inspected before being closed up then it will have to be opened back up if the inspector needs it opened (things plumbing or electrical).  HVAC is easy enough to inspect after the fact.   Electrical it depends on what work you did.  If it's just a service upgrade or panel changeout that's easy but if you rewired the entire house you could be in for a big headache.  

Short term rentals of less than 30 days are prohibited in the City of St Petersburg.  You can rent your house legally twice per year for a period of less than 30 days.   The city doesn't proactively monitor this but when your neighbors call it in (and they will) they will crack down pretty hard.   There are other municipalities in Pinellas that do not/can not prohibit short term rentals.  

Sounds like you're on the right track.   I wouldn't say you have enough to retire but you've definitely set yourself up nicely.   $3k/month wouldn't even cover my 3 kids' private schools so I have to keep grinding.   

Well if the place is in decent condition why not start marketing it now?   If their plan is to have the place cleared out by August 30th why not start looking for a tenant for September?