All Forum Posts by: William Hochstedler

Have you looked into refinancing it?  Right now rates are great and you might be able to lower your payment to not have to feed it.

This is a tough one and I'm getting these calls a lot.  Ask yourself if you want to own this property for another decade.  Because if you don't sell now, your next chance might not be for several years to get anything better out of it.  You bought at the top of the market in 2009 and you might be at the top of the market now.  If it's not worth $200K again for 10 years but you've had these capital expenses, are you any better or worse off?  Does the tax benefit help you?

Then the much harder question is if you have $25K do have any better place to put it? Like you said, it's not enough for a down payment, but it's enough to get started as an active hand's on investor. You could partner on a flip or two. You might be able to find a seller finance deal with a high LTV. Etc.

And not to get all Dave Ramsey, but if you don't have 6 months to 1 year of savings and all that.  Now would be a good time to stress test your personal finances and make sure you have adequate reserves for your family.

Tough decision indeed.

You shouldn't have much to worry about in Ogden.  Compare largest employers in Ogden to somewhere like College Station, TX.

Also, there are many other housing requirements created by a university other than student housing.  What's your affiliation with the school?  (If your answer is none, consider that the same might be true for others seeking housing in that neighborhood).

The great thing about universities is not the student tenant pool, but the long-term stability of the neighborhoods that they're in. 

Good luck!

Most jurisdictions are terrified of this kind of development because they can't figure out how to differentiate it from a mobile home park.  With little capital, you could create a lot of value by talking to planning and zoning departments everywhere you can until you find some folks that are open to the idea and what it would look like.

I'd love to hear what you find.

@Bryce Bender

I've attended auctions in Box Elder and Weber Counties.  I even bid on some things in Weber but they got bid up so quickly it wasn't interesting.   One year, someone bid on a house that was only a house on Google Earth.  It had burnt down earlier that year.  These auctions happen in May.  So marketing to the owners may be interesting.  Trying to vet properties doesn't make much sense until a couple of weeks before the sales.  Counties work hard to make sure people don't lose their property.

In Weber County there are typically a few dozen parcels that mostly revert to the county.  They also notify neighbors who may want adjacent parcels that are smaller than the minimum lot size.  Interested neighbors on gap lots get priority.  A couple of other parcels I saw go were the space in a cloverleaf interchange and some dedicated green space that a developer managed to isolate to a dedicated parcel.  Just stopped paying taxes on it and now doesn't have the maintenance burden.

It's all pretty good sport!

It all boils down to whether or not they need their equity now. Are you better off coming in with $114K down (equity & rehab) than just buying them out with hard money? Your HML will likely not lend in second position.

You have to honor any leases that you inherit when you buy a property.  That's why it's important to review them during your due diligence period.

That being said, a lease is a contract.  All contracts can be renegotiated, terminated or whatever with mutual consent.  You can also have the lease agreement modified with a buyout prior to closing on the home.  But it sounds like you already closed?

There is no "service" in this situation.  The lease most likely won't have a provision for you to unilaterally terminate the lease with 30 day notice, so forget about that.  The two month buy out is just a convention or starting point.  There isn't any law or ordinance that says what the lease buyout has to be.  Your tenants might move for nothing if you help them find a new place and give them a good reference.  Just talk to them and see what they need and figure out if there's something that works for both of you.  Otherwise, you're stuck with the lease.

This is very difficult anywhere on the Wasatch front. There are some pretty big flipping operations who are willing to work on thinner margins than this. Any deal on the MLS is getting bid up until the 30% margin disappears down to single digits.

If the property doesn't need work, we're starting to see offers above appraisal in Weber, Box Elder, and Cache Valley.  This is a new thing this year.

@Russell Howes

It can be very difficult to view units with tenants in them.  It requires 24 hour notice and can require small showing windows.  In Ogden, many seller's require an offer before they will accommodate showings.  Up here in Cache Valley, it's much more browse-able.

Your agent is correct that it is standard to ask for a due diligence contingency which provides for a no-explanation cancellation.  Cancelling based on due diligence will get you your earnest money back.

So I agree with your agent.  In this market, we shoot first and aim later.  Offers can get accepted before you have a chance to get to the property.  On hot properties there will be multiple offers.  Sellers often request highest and best.  That would be when you go check it out and really think about if you like what you see.

What's more, other buyers will be making offers site unseen which puts you at a disadvantage if you require looking first.

I'd recommend taking an afternoon and looking at a bunch of vacant properties all at once.  That way you can compare a bunch of properties and get a feel for the market.  You and your agent can get on the same page so when the one you want comes along, you'll both know it.

Good luck!

I've been through several situations where a buyer calls their attorney (or is an attorney) to draft an offer.  The attorney takes some contract they have from a deal a decade ago or a recycled purchase agreement that has been circulating around for years and is boilerplate but of unknown origin.  Back in the day, I saw the same obsolete lease agreement from 4 different attorneys that was originally written for a portfolio owner 15 years earlier.

What then happens is that you take this to your attorney who charges you hourly to go through all the clauses that are no longer valid, have subsequent problematic case law, and ambiguous language.  What's more, if the contract goes south, you will now be litigating a document perhaps with unknown origin and is unsupported by convention and case law.

Unless this is a mammoth deal with a lot of moving parts, you (and the buyer) will be probably be better protected by transposing everything to the standard RE-21 if it's residential.  

If that's not possible, I agree with the other posts that you have no choice but to take this to an attorney. The other option is to find an agent and pay them a flat fee for their forms and E&O insurance. The costs may be similar on the front end, but again, the first option may cost a lot more to defend if something happens.

You won't be able to insure the title on these properties.  The national underwriters will only insure them after a 4 year holding period.  So if you plan on selling them or refinancing them before then, you will have to do a quiet title action.

This will cost $1500-2500.  So factor that in.

I'm only familiar with the northern counties, but deals are few and far between.  Assessor's really work with owners.  All that's left are junk lots and the very rare opportunity.

There was some good discussion here a few years back on Utah Tax Sales.  Do a search for them as well.