All Forum Posts by: Winston Covington

I would discourage your client from converting a 4 Bedroom home to a 3 Bedroom. Especially without a permit.

If he were to go ahead with his idea, he would need to disclose it to the Buyer and it would be a good probability that your client would need to restore the wall returning the home back to a 4 Bedroom.

Next, I believe that most appraisers would give a higher value to a 4 Bedroom home in the same neighborhood compared to a similar sized 3 Bedroom.

Last, Investors are more attracted to 4 Bedroom home vs a 3 Bedroom as Bedrooms equal cash flow. 

Hi Ramon, my first recommendation is an obvious one...never do anything in Real Estate without proper representation. My 2nd recommendation is to find a good Attorney who specializes in Real Estate to help you resolve this problem.  Remember that " In God we trust " with everyone else...get it in writing.  Good luck and keep us informed.

I like Dustin’s advice. In addition to a 2 year home warranty plan, I would have the unit inspected by an honest HVAC contractor.

A letter from the cContractor certifying that system is in good working order along with the home warranty should put the Buyer at ease.

If that doesn’t take care of the problem, you can split the cost or put the condo back on the market.

Just remember that if you put the property back on the market, you will need to provide the next Buyer a copy of all inspection reports as well as be prepared to explain why the previous deal canceled.

Check with your title insurance company to see if a survey will be required prior to being able to obtain title insurance. Double check your zoning and see if your County has a 5 year plan for your area. Are utility connections on the land or adjoining to ? What’s the easement and access situation. Is the Seller willing to help finance the purchase ? These are just a few of the questions to start with.

In my 38+ years as a Realtor, I have seen far more deals lost due  to uncooperative tenants that I care to mention. To begin with, your lease with your tenant must be respected as a sale of the home will not break the lease.

If an Investor is buying it, having a good tenant in place will be attractive depending on the terms and conditions of the lease.

However; if it’s a owner occupying Buyer that you’re dealing with, the tenants can kill the deal by their lack of cooperation in showing the home, not keeping the home clean and neat or by planting negative feedback about the house and the area in front of the Buyers.

Furthermore, I have seen tenants refuse to move causing major problems for the transaction knowing that it will take months before you have a date in eviction court.

if you can afford to carry the house payments while you’re selling the home, wait until your tenants move out.

If you can’t, negotiate a discounted rent for your tenants cooperation and work out a respectful showing schedule in advance.

Good luck.

Hi Brent, here’s some things to check into before buying at an auction.

1. Is there a Buyer’s premium that will be added to the purchase price by the Auction House. Many times it can be 5% or more.

2. The terms and conditions of how you will be required to pay for the property.

3. If the property is occupied, what are the costs and time requirements for an eviction  ?

4. If the occupants are cooperative, you might be able to get them out faster with a Cash For Keys agreement 

5. Make sure to have a healthy budget for repairs 

6. Be aware the the Auction house is very good at pushing the price up. I have seen lots of people pay too much for a property “ thinking that they were getting a deal by buying at an Auction “

7. Do your research, know your comps, check the title for any new liens or judgments and be patient. Many times, the better deals are found towards the end of the Auction 

Good luck

Short sales are a roll of the dice. As mentioned earlier, the Seller will agree to anything as they will not receive any proceeds from the sale. Therefore, the true price will be set by the lien holder and an appraisal or 2 or 3 averaged out. Short sales can take as long as 6 months to work out and  even then, they may not  come  together. Especially if the investor is out of the country.  Take it from the voice of experience and someone who has done a LOT of short sales over the years...they will be sold at current market value if at all and many times the process can prove to be a huge waste of time.

Hi Patrick, when you purchase a property “ subject to “ taking over the Seller’s loan…it is your responsibility to make timely payments to the bank as well as for your property taxes and insurance. If you fail to make your monthly house payments to the bank on time, that reflects on the Seller’s credit. That will hurt their Fico score and could easily affect their ability to obtain credit for anything well into the future. If you were to default to the point where the Bank had to foreclose, any equity still owed to the Seller would go to them as a lien holder. Any other equity would go towards the expenses due and you as the former deed holder would get the balance of the equity depending on the price paid at the foreclosure sale. * Note * In a foreclosure due to your default…your lack of being responsible for the monthly payments would leave a negative entry on the Seller’s credit report for 10 years.

Hi Elliott. I would encourage you to walk this property with an honest and experienced General Contractor. Get his opinion on what it would take to get this property in shape and make sure to get his bid in writing. Then add a minimum of 10 to 15% to cover unforeseen  repairs that will be found once you start your rehab. I would then get a 2nd and 3rd opinion for comparison and good old fashioned due diligence.

I would also recommend that you speak with at least 2 property management firms to get a good feel for what your rental income should be and how long it would take to rent this property to a qualified tenant. Check for the school ratings as well as the Public Information Officer for your local Police Dept. to verify the crime stats.a

If the above checks our well and you're pulling positive cash flow out of the BRRR long term financing , move forward with caution and triple check your #'s. aaa

Speaking from the point of view of a professional 37+ year veteran of real estate…I have never taken an open listing in my career. A Realtor that is dedicated to representing his / her client in the sale of their home to the best of their ability will invest thousands of $ in the marketing of the property as well as a considerable amount of time, energy and talent. With years of experience, knowledge and a high level of integrity…a professional Realtor earns his commission and then some for the level of service that they provide their clients. An exclusive right to sell listing provides the assurance that if the listing agent performs well and his marketing efforts produces an acceptable offer…the agent will be paid for their services.