All Forum Posts by: Tom Albares

My wife died two weeks ago and I’m confused what to do with my real estate holdings. 

My current situation is I own a house with a detached guest house in Tucson, AZ. It’s worth about $580,000 and $475,000 is owed on the mortgage. It would take about a $25k investment to make it really sellable, and the market is slow. 

My wife also ran a vacation rental business in Tucson. The condo is worth about $200,000 and $88,000 is owed on the mortgage. The business grosses $23,000/year and nets around $2000/year after all expenses including mortgage are covered. 

But I work in Palmdale, CA and we were in the process of buying a new construction home for us to live in while I finished my career. The house in Tucson would become a second home that we’d retire to. 

Now all of that has changed. I can keep the vacation rental business going if I want to. I can hold onto the house. But should I carry the burden of a huge house payment for a house I don’t use?  And I don’t want to rent it. Too big and niche for a normal rental. 

Any advice would be appreciated 

We own a rental home out of state and our tenant decided not to renew his lease. We would like to remodel the home to become a short term rental. We have received a bid from a reputable contractor, but we now see that we will be required to do a good deal of the demo work to stay within our budget. Are the costs of travel and lodging at a hotel tax deductible during the renovation work? Or does it count only as one of the two annual trips to inspect your property? Any help would be appreciated.

Hi, I have a 696 sq ft house in Cortez, CO.  We have already updated the outside of the house with a new roof, siding, windows, and doors.  We now need to remodel the inside.  It's two bedrooms, one bath, one kitchen, and a living area.  The plumbing and electrical will need to be updated.  It won't require an entire gut, but drywall work will be needed.  It will also require a new HVAC, as it currently has just a floor radiant heater.  Is there a rule of thumb per square foot on how much this should cost?   Thanks in advance

We are trying to purchase two vacation rental condos here in Tucson. One was a normal sale, and we put on offer on it that was accepted. The other condo is a foreclosure that we also bid on. I bid 3% under the list price and asked for $2500 in closing cost. No inspection contingency. Now the bank has come back for best and highest offer. Our realtor found out there is only one other bidder and the bank wants all bids back by Sunday to decide on Monday. My wife does not want to get in a bidding war. If the unit sells for much higher, it will approach the price of the other condo we have under contract, but would need bathroom repairs? What should I do? Should I increase the bid to their asking price? I think I should drop the request for closing costs. Should I increase the earnest money from 10% to 20%? Or should I just walk away and concentrate on renting the one property we have under contract?

Went under contract today for a 2 bedroom 2 bath unit. 1st floor easy entry. Literally steps from the pool/tennis courts/rec center. Good price, below market value, seller contributes $2500 towards closing costs. Need to replace the refrigerator with a counter depth model with an ice maker. Other than that, clean and decorate it.

Bernee Brawn I agree with the furniture assessment completely. In the unit we looked at, the beds were both 14 years old. The linens and bedding needed replacement. The cookware was not usable (at least I would not want to eat that much chipped Teflon). The dinnerware, glasses, and silverware also needed replacement. So other than some wood furniture and a lot of knick knacks, it wasn't too turnkey for a vacation rental. We officially cancelled the contract today and put in offers on two different units. I think I priced them fairly, and again using the tools here project that they both can produce decent income streams (around $9k/year each) with about a 40% occupancy rate, based on comparative rentals in the same area.

We exercised our right to cancel the contract. The seller did not respond to the inspection repair requests. Today, we are looking at other units. The complex is desirable to us because it backs directly to the Santa Catalina mountain foothills. It has direct access to hiking trails, is located next to a golf resort, and is in a secluded area of town. Tucson is not the hottest vacation destination, except in the heat of the summer (LOL), so every little bit helps to attract visitors.

Maybe I got ahead of myself. During the inspection, the HVAC could only cool 12 degrees cooler than the outside temperature. Not good in southern Arizona. The inside unit was original 30 years old. The outside unit was inaccessible during the inspection, on the roof. Due to the weekends and a 10 day inspection period, there was no time to get a HVAC firm to really tell me the condition, so when submitting my buyers request (BINSR), I requested replacement of the HVAC or credit in lieu of. The seller has not responded, and that means I now have five days to take it or leave it. My feelings about this transaction are mixed. The seller did not budge on his price and was extremely slow to respond to our offer even though it had a set time frame. We literally had to threaten to rescind the offer to get him to sign. During the inspection we went through the included furnishings. All of the beds are 12 years old. The appliances do not match and are old models. All of the dishes and bedding would have to be replaced. In essence, we'd be buying a vacation rental that the owner was tired of and wanted to cash out. In the same complex are some 2 bed 2 bath units for far lower prices. All are in good condition (I now suspect HVAC on most of these 30 year old units). But the prospect of buying two of these units and furnishing them and generating two possible revenue streams intrigues us. What is your opinion on this deal? Take it or leave it?

My wife are thinking about investing in a vacation rental in St. Croix. The USVI gives us a chance for a normal loan with 20% down. The prices aren't too bad, but HOAs in condos are through the roof - $600 to $800 per month. And it would require local property management. It looks like a reasonable price/night would be around $150. But it only looks like a 50% vacancy rate. So possible income is $27,000 per year. So if the condo is $95000, total payment including HOA is $1240/mo of $14880 per year. Property management would cost around $2700 per year. So possible profit of $9420/year. Any opinions or knowledge of the area? Thanks.

I ended up getting a few rough estimates for repairs. Came out to $8425. Submitted a BINSR to the seller with the repairs requested or a credit in lieu of repairs. Now it's a waiting game to see the sellers response. I do agree that turn key should be just that.