All Forum Posts by: Account Closed

@Kimberly Land 

wow. I figure the reason no one wants to start an HOA is that if one does get started, there are going to have to be some special assessments for deferred maintenance. It isn't just going to be $25 per month if the building needs a new roof (for example) and every owner has to chip in $1000 (for example). The cost of not doing anything is greater but only for those still around to bear the cost.

I know you want to save the building. If you manage to buy the foreclosed units and manage to start your own HOA, the question I would ask (since you will be the majority stakeholder in the HOA) is what are all the costs to take care of the deferred maintenance and to catch up with all the bills and get the necessary insurance in place? You'll have to raise most of this as well. Probably, you won't get a regular mortgage anyway because a bank won't finance an un-insured condo with no HOA.

Sorry to be bringing up more problems to think about (probably this has crossed your mind already). 

Hopefully some helpful folk on BP will come up with ideas and maybe even real solutions by partnering with you.

All the best.

Oh, and your original question: from what you say about how busy you are, I would get a property management company.

@Dennis Standers So you'll be buying the small apartment in order to rent out your house or you'll be renting the small apartment to be able to move out the house and rent it out? I'm not clear on this.

If you'll be buying the small apartment and you've run the numbers carefully that you'll actually be making money rather than losing money - then this is an option. If you'll be renting the small apartment - I wouldn't do it. You've only lived in your current house a year. If you're able to make an additional payments on your mortgage (and the bank allows you to prepay your mortgage without charge) to build equity, I would rather do this.

Don't stretch yourself too thin financially. When you run your numbers to figure out if you make a profit or not, you need to factor in vacancy costs. What happens if a tenant moves out and it takes a month or two to get a new tenant in. Will you be able to factor in that expense and be able to make the mortgage payments.

Just some thoughts.

@Cory Melick 

Good luck! Remember... screening, screening, screening!!!!! Great blog post called "The Top 8 Mistakes Made by Rookie Landlords" was posted on BP just a few hours ago. It's good common sense reading.

"Originally posted by @Lenin Vega:

-Purchase price- 590K is a bit higher then market rate.

1. Mmm... this is the statement that stood out to me. If you're buying a house for yourself, for your own enjoyment, you can (maybe) afford to pay market rate. If you're purchasing for an investment, to get into buy and hold and to eventually do flipping, you should NOT pay market rate. You need to go digging for deals, for houses you can get at below market value (short sales, foreclosures, auctions, etc.

 2. If you're taking over existing tenants - be sure to do your due diligence on them. Get copies of their signed leases. Get copies of rent receipts (are they paying on time every month), etc. If any of the tenants seem dodgy, put a condition in your offer that the particular unit is vacant at closing so you can put your own tenant in.

3. Do not fail to incorporate all costs into your calculation. If the current owner is an "investor", they should give you verifiable data regarding annual maintenance expense. You should also include in your calculations capital expenditure. Some of the systems in this house are new, but all systems eventually need to be replaced. It doesn't matter if you make X per year (cash flow after paying all your expenses) when replacing the roof 10 years down the line swallows that all up.

Does anyone else have any thoughts here? Have you looked under the analyse tab to learn how to analyse your property?

All the best of luck.

@Westin Hudnall 

Great spreadsheets and examples in "Resources" under "File Place".

@Carlos Rodriguez 

selling your house to your girlfriend may net you $60K but...

As others have said above, selling your property to your girlfriend will not have an immediate effect on your credit.

To buy the property from you, she will (I assume) have to qualify for a mortgage and the house would need to appraise and she would need to pay closing costs, even if you do the sale without a realtor.

Wouldn't it be more efficient financially, since she's going to have to qualify for a mortgage anyway (again, I'm making an assumption), for her to buy the second house in her name rather than do this gymnastics where she buys your home so you can buy a second one?

That being said, the best thing you can do for your credit is be paying those bills every month on time and building up your savings for a deposit. Paying them off in one lump sum would save you some of the interest charges but would not do magic to your credit score.

I don't know your whole situation but look at it from all angles and hopefully you come to a good solution.

Welcome to BP. A lot of people here who are more than willing to answer questions. Probably you will find that a mentorship relationship develops over time after you have gotten to know someone. Connect with people in your area through BP, hang around on the forums, attend real estate investor clubs in your area. Over time, the right mentor will come your way.

@June Alexandrea 

Can you maybe find out who the lawyer is handling his estate? Hopefully someone here knows how to look that information up. Once you have the niece's contact information, you can write her a nice heartfelt letter explaining how you came across the property, tell her her you feel sorry for her loss, tell her how you can remove some of the stress of the situation by solving her problem in some way and give her your contact information in case she ever wants to talk to you about it. You'd be surprised how a nice hand-written note (rather than some standard marketing brochure) can come across in a positive way.

Good luck.

@Peter Grosso 

Peter, I have no specific experience with german banks but having bought property internationally before I have to assume that a german bank would likely only give you a mortgage for property in Germany or the euro zone. I highly doubt you would be able to lend money from them (other than maybe a personal loan if you have a relationship with them) for property you bought in the US for example.

For example, my US bank would not (I did ask them) loan me money to purchase a property internationally (how would they verify the property, appraise it, do their due diligence, etc). Under certain conditions, they were willing to loan me money on a personal loan but the interest rates were personal loan rates. But even for a personal loan, they wanted me to provide extensive information about the asset I was buying.