All Forum Posts by: Teri Feeney Styers

@Allison Levine I would think a practice facility is a whole different animal than a stadium. I'd research what you can about how it will be used and by whom. Is it even used year round? Will they have a fulltime staff that needs housing? Will small business follow (food trucks, bars)? What will be displaced when they build - does it need to be replaced? Sounds like you know the area well. So what is needed TODAY? Always affordable housing... 

@David Kirkpatrick hmmm... here are the problems I see with this scenario (and that you need to remedy). You inherited these tenants and their lease. The lease is "silent" on who maintains the chair lift specifically. The lease is probably not silent on other landlord repair responsibilities and there is generic language in it to include other systems and appliances. You didn't take it out - therefore it is in. Secondly, your tenant spent $200 without notifying you first. Does the lease spell out repairs and reimbursements? As a landlord you are required to follow the laws of the Fair Housing Act. The chair lift is "reasonable accommodation". Here is what the law says: "The Fair Housing Act prohibits a housing provider from refusing to permit, at the expense of the person with a disability, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises." So you left the chair lift in place. That is reasonable accommodation. The batteries should be at the expense of the tenant. You need to modify the lease so that the tenant pays if the chair lift breaks (no reason to take it out if it is functioning). The tenant is responsible for maintenance. If the chair breaks you must allow the tenant to install a new one at their expense. 

@Jay Lam in Colorado a licensed property manager has to hold security deposits in a trust account. Now you aren't that "official" - but you should think about how to protect your tenant if something should happen to you. Holding the security deposit in its own account is a very good practice; but also make sure that there is some sort of "continuation" for that account. Your wife as joint tenant (even though she isn't an active manager she can still sign a check if need be), a child or trusted relative as a designated beneficiary (so the bank knows what to do with the money). It can be a personal account; but for recordkeeping, IRS, etc. don't co-mingle other non-business funds. When I had my own rentals I had two accounts (a checking and a savings). The checking was where rent deposits were made and month to month expenses such as water bills were paid. The savings had the security deposits and monthly deposits for longer term items (cap ex) like a new appliance, or paint, or roof. I chose to put 10% of the gross rent in there. 

I have flipped many houses. I am an S-Corp but that doesn't really matter in this scenario. For now you do nothing. Just keep all your financial records regarding the purchase, improvements, holding costs, etc. The year you sell the house (presumably 2024) you report ALL the profit and loss. Simple. This is "ordinary income" and you will show it on your personal tax return. Don't try to write off any expenses until you have an income to offset. Much cleaner. @Mike Bayer

@Mark Y. You have lived in the home for more than 2 years as your primary correct? You'll net around $150k and that will be tax free. Unless you guys absolutely love the home and see yourself coming back to live there for many more years, I would sell. A lot can happen in your lives in the next 2-3 years and you could pivot in ways you don't see right now. However, if the intent is to buy a home when you return, I would not invest in anything that has risk. You can get very safe CDs paying a little over 5% right now. Buy for 12 months - guage where you are - then decide whether to reinvest or spend. Investments with risk (stocks & mutual funds) are a longer game - 5 years or more. They are not a bad investment (I have them): but they have a different purpose than what you are describing now. Enjoy this next adventure and don't worry. Your money will be safe and waiting for you no matter what! Well done. 

@Grant Vincent your step-father can be of fine health and still choose to "abandon" the home; in which case the life estate is terminated. Definitely take the car ride and lay it all out - including how regular rate increases might be handled. What if insurance or property taxes double in your area as they have elsewhere? Perhaps making step-father responsible for those items is better than charging rent. Does your Mom have some additional funds to leave you for maintaining the home while step-dad occupies? Once you lay out all these things they may find that option less appealing. 

@Michael Campbell if there is a mortgage on the property it should have been recorded at the local Clerk's office. You can probably pay a visit and search the files for the lender name. Or you can ask a Title Company to do the search for you. In my county you can search online for records and pay a small fee to download the documents. Then visit the lender website and see if the have an REO section or try to find a person's name. It is not unusual for lenders to hold foreclosed properties for long periods of time before putting them on the market. You might get lucky and not have to wait if you can show true interest and ability to buy. Maybe they would even be interested in lending you the money to make it a performing asset again.

@Grant Vincent I think what your Mom needs to establish is a "life estate" as you mentioned. For the benefit of those who are unfamiliar: Mom can will the house to you; but the life estate is also recorded and you have to honor that much like you would have to honor a lease on a property you buy. The life estate will spell out the obligations of the step-father (taxes, utilities, insurance, upkeep - or even a base rent that you could use to cover those costs). Life estates generally terminate in two ways: the Remainderman (step father) dies or permanently moves out (like a nursing home). Once that occurs you are free to handle the property any way you wish. I am also a broker and sold a life estate property last summer. This is where it got messy: Mom willed the property to all her children. She allowed one son to live there with a life estate. The son ended up in a nursing home but refused to admit he was unable to ever come back to the home. The lawyers had to move with caution because he was becoming mentally incompetent and they didn't want to have him signing documents (malpractice). They were finally getting somewhere with having him declared incompetent when he suddenly died. There was probably a way to address that in the original life estate document (some sort of time limit for the abandonment). Obviously you don't want to kick step-father out just because he needs to stay in a rehab facility for a month or two after a hip replacement; but at the same time, this guy was never going to be able to live on his own again (and he had let the property deteriorate to a state that made it uninhabitable) and it took a lot of unneccesary time and money to work towards resolution. So you and mom go in with your eyes wide open. 

 @Doug Smith and @Jay Hinrichs in Colorado the schooling and testing has a much higher bar. Our required contracts include spelled out options on how a seller will pay a commissions and how the listing agent will (or will not) split that money with a buyer's agent. On our contract to purchase there is a whole section regarding the buyer's agent and who will pay them and the seller's agent and who will pay them. We are pretty transparent. When I read about the "listing" contracts offered to the original sellers in Missouri who started the lawsuit I about fell off my chair - I would sue too! I agree with Doug - this will be very detrimental to buyers. Some will believe they can handle the transaction themselves and will either end up under represented or the listing agent will end up doing double duty to keep deals together. VA buyers will need to beg sellers to pay their Realtors. All truly professional agents will need to work extra hard to explain to sellers why it is in their best interest to offer compensation to buyer's agents. AND agents need to remember that the commission/compensation has always been negotiable. Do I work twice as hard to sell a $1m house as I do a $500k house? Probably not - as house prices (the pie) have risen our slice of the pie has remained the same. Perhaps agents need to reconsider that and offer some tiers and some capped rates. Just sayin...

@Robert Adams As a Realtor I would be cautious about the wholesaling. It could be perceived as a professional taking advantage of naive sellers. You are offering less than market value and then selling that contract at a higher value. Could be perceived as an Ethics or Fiduciary violation... However, you could build your investor-buyer network and partner with one or more who have more money. You have $15k to throw in the pot along with whatever commission you might earn on acquisition. You have expertise in the negotiations and contract writing. As a Realtor you know what the general public is seeking from homes so you can advise on upgrades and finishes and what the ARV would be. And you have the ability to bring it back on the market and represent the sale.