All Forum Posts by: Taylor Robertson

I'm pretty new to REI. I did my first deal six months ago on a duplex house hack that's gone great so far. I'm eager to do more deals but capital is my biggest issue.

I was notified today of a family member of mine who is going to be forced to sell due to health & financial issues. Based on what I was told she wants to sell for, it appears to be a great deal on the surface. It would need about 10k of rehab to be rent ready— she wants to get between 70-90k out of it and Based on market research, it would rent for 1200-1300, so well over 1% as well as sell on the market in the 150k range. I’m very interested but couldn’t buy it traditionally for 25% down because I simply don’t have the capital after expending mine earlier this year. I thought seller financing would be a great idea. I just have no idea how to go about that. Also, she still owes $66k on the mortgage so I’m not even sure if it’s possible to do seller financing and, she needs the equity she has in the property upon selling.

My question is, is seller financing even an option if she still has a note on it? And if so, how should an investor proceed who lacks the experience? 

I am trying to fill my first rental. I’ve narrowed it down to two parties. The property will be rent ready by this time next week.

#1. Single, smoker, has dog. His references came back perfectly. Great credit and background check. He would be paying an extra $25 per month due to his dog. He says he would only smoke outside. He wants to move in June 1st. I would envision him as a quiet respectful tenant. 

#2. A younger couple relocating to area for work. Non smokers and no pets. They also have good backgrounds and references. Only problem is they plan on moving down here June 19th, so I would lose out on most of the months rent. My gut tells me to go with them. They understand that I’m trying to fill the spot as soon as possible.

So the dilemma is a smoker and dog with one applicant or losing out on rent from the other party, unless they were willing to start the lease early. Any thoughts? 

I have a recent applicant who is relocating to my local area for work. She does pass the qualifications for the most part but I see a few red flags. For one, she told me she doesn't have past landlords to use a references because she previously owned a house and since she's moving here, she will have to break the lease with her current landlord. Furthermore, she said she will be working for a new company here, so I can't necessarily verify her income with that job due to her not starting until the end of May. Other than that she appears to be a promising applicant (good income, background check etc). She's driving 5hrs one way to see the place tomorrow, so it seems like she's serious. This is my first property so I don't have the tenant experience yet to say whether to pass or not. She's a little older and will live by herself, so I'd like to hope she will make a good long term tenant. Is there anything I can to best protect myself and ensure the accuracy of her claims.

Just closed on my first deal last week-- a duplex househack. I was planning on starting to advertise for the vacancy this week and have it available within a few weeks. I was moving in over the weekend and the next door neighbor and his daughter (mid twenties) came over to introduce themselves to me. They said that she wants to rent the unit and asked me not to list it. He's older, retired, and lived there 15+ years, so I believe so he'd like to have her close by. She is a single mother with two daughters no pets. The only problem I can think of is that it is a higher end rental for my local market and I'm not sure if she'd qualify making 3x income to be able to afford rent. However, my agent told me he thinks her dad would be willing to help her on the rent if she can't afford it all herself. I know this contradicts basic landlording 101, but due to the fact that he's literally next door and wants her to move there as well, should I make an exception due to the circumstances if this is the case? This obviously would be contingent on her meeting my other minimum standards, passing a background/credit check, and getting good references. Any thoughts? Thanks

What can I do as a buyer about a seller unmotivated to close?

I was set to close on my first house on 2/24. The day before, there was a chimney fire that caused some damage. Insurance paid out to the seller for the repairs and we set a new closing date for 3/17. We have had to extend the closing two times now due to the house not being ready. My agent says the seller is dragging her feet via not putting her crew to work (she is a contractor). In the meantime, my lender has graciously extended my rate lock but will not continue to do so as it costs him money. My local market is still quite competitive right now so I’m not in a position to back out and find a similar property. Long story short, seller keeps breaching contract by not meeting her obligation to be ready to close. My agent let her agent know we would be requesting an interest rate buy down and her agent scoffed at that remark. My agent said she’s playing hardball because she thinks I have no other option to purchase. What can be done to either motivate the seller to close or receiver some sort of compensation for wasted time?

What can I do as a buyer about a seller unmotivated to close?

I was set to close on my first house on 2/24. The day before, there was a chimney fire that caused some damage. Insurance paid out to the seller for the repairs and we set a new closing date for 3/17. We have had to extend the closing two times now due to the house not being ready. My agent says the seller is dragging her feet via not putting her crew to work (she is a contractor). In the meantime, my lender has graciously extended my rate lock but will not continue to do so as it costs him money. My local market is still quite competitive right now so I’m not in a position to back out and find a similar property. Long story short, seller keeps breaching contract by not meeting her obligation to be ready to close. My agent let her agent know we would be requesting an interest rate buy down and her agent scoffed at that remark. My agent said she’s playing hardball because she thinks I have no other option to purchase. What can be done to either motivate the seller to close or receiver some sort of compensation for wasted time?

Background: (Kansas) My first deal was going to be a house hack on a duplex. We were set to close on 2/24. However, hours before we closed, the house caught on fire due to the fireplace being used by the tenants. There was no structural damage because the fire was contained to the outer edge of the house in one small area-mainly drywall and flooring needs replaced. Tenants and current owner were both aware that the fireplace needed service due to inspection report, yet continued to use fireplace without servicing it. Closing was obviously pushed back.

Fast forward to today. My agent said that my lender is now requiring that a structural engineer come out for a re inspection of the house is structurally safe after seller's insurance finishes up repairs. Additionally, they are saying that the house will need reappraised, I must disclose what happened to my insurance (which could mean my premiums go up), and that I will need to sign a hold harmless agreement at closing. Closing was pushed back to 3/16, which is the day my interest rate lock ends. The repairs will not be done by then.

What can be done to resolve this situation? Should the seller buy back down the interest rate because it was gone up substantially since the lock? Can purchase price be renegotiated? According to my agent, the seller is desperate to sell because she needs the money. I too want it because there is no other duplexes available in my local market. Do you see a way to leverage the situation?

Thank you all for the insight. My worry with walking away would be the fact that I've already spent money on the inspection, as well as the appraisal & underwriting fees were due via closing costs as well. I'm not sure if I would be liable for all of this, which would add up to ~$2,000 in total. I'm don't believe there was structural damage but could easily be 30-50k it total costs. I would like to move forward with the house simply because there have been so few multifamily homes for sale in my local area (Wichita, KS) and I finally found this one after nearly one year of looking. The home was built in 2016 so it is still fairly new.

There may be some legal disputes between the tenants and owner as well. Like I said earlier, the fireplace & chimney were deemed not safe for use and recommended to be professionally serviced per the inspector. The owner was given this report and chose not to service them but rather give me credit for the cost after closing. The tenant was also aware of this and chose to continue to use the fireplace despite orders not to from the owner. Also, the smoke detectors were found not to be functional per the inspection. Again, seller was fully made aware of this. However, on the seller disclosure report I was sent before inspection, she stated that everything was in good condition.

Lastly, from looking at the tenant's social media, they are already looking for a new place to rent. My loan was contingent upon proof of rental income in order to qualify for the loan. If the tenants do vacate, I wonder if the lender will disqualify me from the property even though my initial plan was to get new tenants in there at market rent. A lot to unpack, I know. Hopefully I get some good news from my agent next week. Thanks!

I was set to close on my first home today. Last night, the tenants on the other side (duplex) caught the fireplace ablaze and caused substantial damage to their side of the house. The inspection report stated the fireplace was NOT safe to use and needed cleaning due to this specific reason. I was set to buy both sides of the house. I planned on getting the tenants out as soon as possible because I knew they were irresponsible and poor renters. Closing is obviously off the table until further notice. I imagine the owner will file an insurance claim, but it could take weeks to months until it’s fully repaired. It was a good deal for the property and my rate is locked until mid march under 6%. My realtor and lender have never seen something like this happen and are at as much of a loss for words as I am. Is there a chance to renegotiate the terms/price? I don’t want to lose my rate because it’s gone up significantly since I locked it. Any advice?

Thank you all for the helpful responses. The purchase price is $276k and it's a conventional FTHB loan. I do plan to hold long term, likely moving out after a year or two to rent out both sides and purchasing another property.