All Forum Posts by: Summer Dechanukul

You have been given all kinds of advice in many forms here. You are going to have to make a decision eventually. For me personally, I have no advice there. I feel its nearly impossible to build a strategy until you know what numbers you are working with. Everything here seems fuzzy and insure. You need to fully understand and be precise in what the after repair value will be (ARV). You have to have a full scope of everything you will need to repair and how much it would cost. You cant guess, hope or depend on what others say. For all you know to clear all code violations it can be 10k or maybe 100k. Who knows? After that, you may be subject to other forms of inspections that uncover more. What if that is another 30k? There are all kinds of stuff behind those wall that could be waiting to uncover themselves. Do you know how long this will take? What if you cant complete in a yea? No tenants or cash flow. Can you cover all these repairs and holding costs for a long time? I mean I have seen people acquire 100k homes but after everything was done (fines, unknown repairs, theft etc), they were all in for 350k. Not good since the home is only work 140k. None of this seems concrete and there´s no solid way to make any logical conclusions.

Yes, this should serve as a lesson to the others. Maybe not to this extent but elements of this happens to a newbie and even experienced people probably every few seconds. There is a lady in another topic asking how can you understand the numbers for a flip and how much stuff will cost. It would be very easy to roll up on a contractor who knows she doesnt know, who will hype that thing double of what it should be or more. It wasnt even that long ago that a realtor directly lied to me because they were desperate and dishonest. This is the real world and I hope the kind of newbies who surf from trend to trend believing REI is just another easy get rich quick gig, they will study real world scenarios like this.

 She's not going to lose $220k. She's going to lose everything she spent on rehab and her down payment. That's about $100k. She owes $119k on it, so if she sells it to whomever has offered to buy it for $120k the mortgage will be wiped clean but so will all of her equity. As I said her cadence makes it a little difficult to follow but I get it. 

 Yes she is detailed but again, something does not add up. Why does she have " violations" from the city. Why would the city even be involved. Why would a realtor put their rep on the line and sell this for 90k to much? Why would it need all new wiring ? Why would she pay 12k for two furnaces and HW tanks, when the cost is about 6k- 7k, ? I haver offered to help and walk it for her to get her facts but yet crickets. You would think one would want someone to have a look . 

 No its terrible, MAX the all-in price should be is 125kish, DIAMOND condition. NEW everything, 

All mine are 1.5 - 2% I just picked up a duplex not far from this area, all in 90k, NEW EVERYTHING rented for 19k, SF all in 70k, rented for 1300, 

Ok this post is making more and more LESS sense. Why would the city be involved? Why would the city even know about these repairs? 

Also 

I already spent $107,900 and I have mortgage balance $119,000 that I have to close

which means I'm going to lose around $115,000  ????????

Also, you said you were offered 120k as is in that area? HMMM, that is way over the true value, again this post is making less sense, 

Which city? 

 The building inspector is the last person you want to speak with. You do NOT want the city involved. I have mentioned this 100x, NEVER do biz in Cleveland without a team in place. If you already got the city involved well now you are in more of a headache/ hassle, 

I have so many questions? Did you tour the property at all before buying? You replaced both HVAC systems why? Were they working before? Why new windows? Were they damaged, this could have been noticed with a quick walkthrough.$100K for two HVAC systems, windows and electrical panels is pretty steep and is going to be pretty hard to overcome. 

 The agent is working to the get deal done. Not working for the buyer, there's a fine difference.

OP, in your case. This is a good lesson, it's a hard pill to swallow. We all make mistakes, don't sit in your sorrow. It's time to buck up and address it. 

For one, definitely go after the real estate agent if there was truly was  disingenuous work here. Make sure you have all your communication. Two, get a real list from building inspectors & contractors on the full cost of the issues. If its $30k, which I doubt, versus $115k like the way you put it. I eat the $30k and hold the asset, if it was like $30k vs $40k, I'd probably sell and rid myself. But that's a pretty big difference. You need to make sure you're asking for every penny back from the agent and going at them hard. Set an example for this. You won't get that, but be damn sure the fight is strong enough to where they'll regret doing this again. Also, get a local team to help you and make sure you vet properly. 

But whatever you don't, don't let this eat away at you. You have your options, and others, in front of you. Don't think this problem was put in front of you to deter you, infact it'll likely you make you now look at all investments, and even daily tasks, differently and more appropriately.  It'll be a net win.