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*** Official Real Estate Forum *** (3 Viewers)

Hello, new visitor... found this thread via Jeff's sig :)

Anyways, I'm a military guy who will retire from the USAF in about 5 years. At that time I will build a house on my lot, and relocate to the Ausin area. I want to purchase a 2-10 acre land tract in an east Austin subdivision near Bastrop. The lots have city water and high speed internet is available, so it all seems pretty good to me.

My questions.

1. I'm noticing the lot prices are about $20K per acre. Is this normal? It seems high, but land prices tend to vary.

2. Many of these lots are uncleared. Will the seller usually clear the underbrush for you as part of the purchase agreement? Should I ask them to?

3. What kind of questions should I be asking before I purchase the land?

4. Does anyone have any other suggestions for areas around Austin? Must have city water and high speed internet, and be within a 15 mile drive to the city.

 
biglare66 said:
Hello, new visitor... found this thread via Jeff's sig :)Anyways, I'm a military guy who will retire from the USAF in about 5 years. At that time I will build a house on my lot, and relocate to the Ausin area. I want to purchase a 2-10 acre land tract in an east Austin subdivision near Bastrop. The lots have city water and high speed internet is available, so it all seems pretty good to me.My questions.1. I'm noticing the lot prices are about $20K per acre. Is this normal? It seems high, but land prices tend to vary.2. Many of these lots are uncleared. Will the seller usually clear the underbrush for you as part of the purchase agreement? Should I ask them to?3. What kind of questions should I be asking before I purchase the land?4. Does anyone have any other suggestions for areas around Austin? Must have city water and high speed internet, and be within a 15 mile drive to the city.
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biglare66,Welcome aboard. Glad someone's reading my sig :) .I know this is a big ol' thread, so I can understand you skipping over this - but we don't usually comment on certain areas here. I'm not familiar with Austin, but I know that there are FBGs in that area. I would start by PM'ing Sigmund Bloom who lives there. As for the purchase itself, as about engineering and permits. Water, utilities? What are the taxes? Where are the building restriction lines (BRLs), and what codes or covenants exist? Home owners assoc?Clearing - that should be negotiable, but be sure to ask around as to how much it will cost. They may try and rake you if you're not careful (like giving you a $20K bill when it costs $5K).Good luck. Finally, we salute your efforts in the military.
 
Jeff Pasquino said:
RKMoney said:
Random said:
RKMoney said:
About to put down a few offers on a few different properties so my main concern now is regarding taxes, specifically, what is the best way to pay the least amount of taxes?I can hold onto it for a year then pretty much not get taxed on it (profit will be ~100k) but would hate to hold on to it for that long. Could rent it in the meantime but again, what if the person who lives there causes problems for me down the road?Just looking for some suggestions. Worst case is that I'll flip it as quick as possible and simply eat the up to 50% tax hit I'll take.
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What kind of property? Residental? How are you not going to pay taxes by holding for a year? Lets see the #'s showing 100k profit.FWIW, I'm a noob in flipping, just about to finish up my first and can maybe give some feedback on your #'s if you want.
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Residential. Piece of property for sale is listing at 260k and cost for adding master bed/bth (~40k) will value home at 400k - 425k according to comps in same area houses that are 3/2. So, spend ~300k and sell house for 400 - 425k will produce ~100k in profit.I currently have a two family I rent out back in NY (Astoria Queens), condos being built on LIC and my accountant said the other day that I could be taxed ~ 35% - 50% with any gains I make by flipping additional property and not holding onto it for at least a year.
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Sell it on a lease option that CANNOT be transacted for 13 months. Done.
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Please explain this...I don't think there is such a thing as selling it on a lease option. Did you mean lease-purchase which should technically be a purchase-lease?
 
BassNBrew said:
Jeff Pasquino said:
RKMoney said:
Random said:
RKMoney said:
About to put down a few offers on a few different properties so my main concern now is regarding taxes, specifically, what is the best way to pay the least amount of taxes?I can hold onto it for a year then pretty much not get taxed on it (profit will be ~100k) but would hate to hold on to it for that long. Could rent it in the meantime but again, what if the person who lives there causes problems for me down the road?Just looking for some suggestions. Worst case is that I'll flip it as quick as possible and simply eat the up to 50% tax hit I'll take.
Click to expand...
What kind of property? Residental? How are you not going to pay taxes by holding for a year? Lets see the #'s showing 100k profit.FWIW, I'm a noob in flipping, just about to finish up my first and can maybe give some feedback on your #'s if you want.
Click to expand...
Residential. Piece of property for sale is listing at 260k and cost for adding master bed/bth (~40k) will value home at 400k - 425k according to comps in same area houses that are 3/2. So, spend ~300k and sell house for 400 - 425k will produce ~100k in profit.I currently have a two family I rent out back in NY (Astoria Queens), condos being built on LIC and my accountant said the other day that I could be taxed ~ 35% - 50% with any gains I make by flipping additional property and not holding onto it for at least a year.
Click to expand...
Sell it on a lease option that CANNOT be transacted for 13 months. Done.
Click to expand...
Please explain this...I don't think there is such a thing as selling it on a lease option. Did you mean lease-purchase which should technically be a purchase-lease?
Click to expand...
BnB,I think there was legislation in NC that might make this illegal now - which is completely wrong IMHO.It is purely rent to own.Put a deposit down that is non-refundable. "Non-Refundable Option Consideration", or NROC.Usually 3-5% of the future purchase price.Agree on a time for the future sale and a price. It can be a window and a sliding price scale.Charge rent, some of which can go towards the future purchase.Wait for them to buy your house.TIP - get them in a credit rehab program. If they had good credit they'd be buying the place.That's about it.
 
coolnerd said:
KnowledgeReignsSupreme said:
Random said:
coolnerd said:
Jeff, I did not go through the entire thread to see if this type of question has been answered, but it has to do with an appraisal. Doing a streamline refinance of my house. The appraised value needs to come in about 4-5% more than it did two years when I bought the house. We have made no major repairs or improvement to the property. The area here has been ok and probably should carry the value of the house on its own, but I wanted to know if there are any small things to do that can help the appraisal come up to the level needed.
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Actually, I just got our place reappraised a few months back to open a HELOC. Anyway, I knew what number I wanted and the first thing the appraiser said when he came over was "do you know what you need the appraisal to come in at". I gave him a range and he was in it.
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GB professional ethics.
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Just to give a follow-up because it fits with this theme. The appraiser knocked on the door with a tape measure and a camera. He measured the exterior of the house, snapped about 4 pictures before coming in to confirm that the age of the roof (2 years) and air conditioning (original). He may have taken 10-12 minutes on the entire thing. He faxed the "results" and of course it came just enough over the value needed to complete the loan. apparently, the mortgage company had given him his target and he made it happen.
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Completely standard. Appraisals are barely worth the paper they are written on. I'd say 29 out of my last 30 loans the appraisal came in at just exactly what I was asking for. I promise that it's not because I always magically asked for the exact value of the house. I few times I asked for more that it was currently worth. MANY times I asked for even half the true value of the house. Amazing that my request for about half the value was magically the total value of the home.BIGGEST SCAM EVAH!
 
RKMoney said:
I also have another situation that sounds fishy and would love some insite.There was a residential property that I was very interested in and the RE agent said that since the property is controlled by a trust (owner is very old and deemed unstable) any offer accepted would need a judge to sign off of it. It's been on the market for a good amount of time and until I really get some of my contractors in there, I won't know the extent of the cost and profit if any will be made from it. Anyways, the agent told me that a year ago they had two offers for 375k and turned it down because it was appraised at 430k. Since nothing has happened since then, they are now very interested in just selling it and she felt that 375k would be solid enough price to have them agree and judge to sign off on it. She also said I could have a 20 day option period where worst case scenario is if the place is too expensive to redo then I can walk away.What's fishy is that I made the offer and she said someone else did as well. About a week went by and got an odd e-mail from her saying the bank is going with the offer offer and is in negotiations. I then got an e-mail saying that I can make another offer but that the other potential buyers while not accepting the banks counter offer can do so if anyone else submits another offer. This is bizarre to me: why not just accept it or try and negotiate with me as well?I am thinking about upping my offer just to throw a wrench into the situation, worst case is they turn it down and best case is they accept it. I can then use the 20 days to see if it's worth going forward then walk away if it isn't.Any advice appreciated.
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They want a Highest and best set up. I HATE these.Basically, they hold all the cards, and want a bidding war. Me? I would bail.I posted in this way back in the beginning of this thread about my worst one of these. Basically the Bank was going back and forth telling each bidder what the highest bid at the time was and asking if we would beat it. Cost me an additional $6K on a house that had sat without offers for months.I used to work with a Realtor here who would have people put in fake bids when he received an offer to drive a bidding war. I dumped him the day he asked me to submit a fake offer where it was worth a C-Note in my pocket.From my experience, don't know about yours, but I would just drop the deal now.On a side note, I am surprised that a Judge is the Trustee. Doesn't the guy have family?
 
Jeff Pasquino said:
DartTeamGoalie said:
I really would appreciate any advice on the following situation:I am trying to purchase a 72 acre parcel of land with no buildings and all mineral and natural gas rights. Several weeks ago, I made a written offer of $115,000 (I used a buyers agent). The asking price is $129,900. The owner countered at $125k and I countered at 120k, thinking he would probably meet in the middle. He replied that he was interested in accepting, that he would sleep on it and let us know in the morning.The following morning the listing agent calls my (buyers) agent and informs her that they have received a full-asking-price cash offer and the owner accepted it and they would be closing in 30 days. I am very suspicious about this other offer coming from out of left field. I think the listing agent is playing some kind of game so he doesn't have to split the commission.Fast forward several weeks to today. I email the listing agent and play dumb and inquire about the property, as it is still listed for sale on their website. Listing agent replies that there is a VERBAL offer at the full asking price, and that both he and the owner are willing to stand by the offer. WTF??? Why would he take a verbal over a written offer, even if it was 10k higher, without giving me a chance to match or beat it?What can I do now? Could I make a written offer matching or slightly exceeding the verbal offer? Is there any way I can get back into play on this property? Perhaps if I went to the listing agent with my offer instead of the buyers agent, so he doesn't have to split the commission?Sorry this is so long. Any advice woud be greatly appreciated.
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Stupid games by stupid people.Call the listing agent and tell him/her that you want to present an offer, but want to be present when the offer is presented.Depending on your level of comfort and/or relationship, bring your buyer agent. If this agent is trying to screw you, play hardball. You need to be protected in any case, so bring the agent to the meeting.Tell them this is the offer you have 24-48 hours (pick one) to decide. They may sign right there.Tell them you're busy and this isn't the only property you're considering (you could be considering the Eiffel Tower, who cares), so you need an answer so you can decide as well. Otherwise the offer is revoked. Put that in the offer.You'lll know the answer soon.
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Sad thing is that if you drop your Buyers agent, and go with the sellers agent so he can get commission on both sides of the deal, he would talk the seller into taking your lower offer.
 
rpreswood said:
Jeff/Mike,I know you guys aren't tax experts but maybe you can answer this simple question for me. If I purchase an investment property before the end of this year and lets say I put 30k into the property to fix it up but don't sell it until next year. Can I still deduct the repairs/expenses on this years taxes? Also, do you use 1031 exchanges at all in your investment strategy? When do you feel it is best to use them?Thanks guys for all the help so far!
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From my perspective as a LL, YES. As long as you had a For Rent sign in the yard on December 31st (Even if the place was months away from completion, I can deduct for this year.I don't know about flipping?
 
I wish I had looked at this thread sooner. Just been burried.

RKMoney said:
Great thread as always guys!

Put an offer last week on a place and was rewarded the contract. The house is in East Austin (hot area) in a historical district. As long as I don't tear it down (which I won't) I am in pretty good shape to redo and add. I currently am in the 3rd day of the 10 day option period.

ARE YOU SURE about the Add? If it is a National Historic District you should be pretty good to go without much interference. IF if is a LOCAL Historic District, it will be governed by Mayoral appointees, and they can be all over the place in thoughts. There may be very little you can do to the exterior at all in a Local District. If it is a Local District, there is an administrator down at City Hall. Find him and have a long chat.

Question #1: Should I bother wasting money on getting an inspector/structural engineer? The existing house needs complete redo of electrical / plumbing and foundation repairs (when I signed contract there were two bids included to fix foundation). The place is "as is" so unless I am missing something I don't see the reason why I need to waste the extra money for someone to tell me the problems I know the place already has.



Common sense says to get one. I doubt I would.

Question #2: Since I have excellent, top notch credit, I want to finance the entire thing as well as borrow $ to fix it up. If I want to put zero down, I'll take it in the seat with higher interest rates but no big deal, will save than putting a chunk of money down. That said, what's the best way to finance this / best deals you have encountered? I have a broker but getting a HELOC type loan (to fix it up) has a pretty steep rate attached. Should I look into bridge loans? Something else?

Question #3: Over the weekend there was an estate sale on a piece of property that I am very interested as well. The asking price is low 200s on a street with 500k houses and a million dollar home. Needs LOTS of work and more money to fix up but the payoff can be huge. My cousin was in town and willing to do one of the following:

A. Take care of entire cost of house (get it back when we sell) and he and I split 50/50 the cost to repair it.

B. I can finance the entire cost of house and he would take care of 100% of the repair cost (expecting repairs to not exceed but come close to 100k).

What's the best option for me? I am leaning towads A. While my cousin is willing to front more than I, I will have to take care of all the pain in the #### stuff. It's a good tradeoff especially since he is in another city and I will be a bit cash poor with the other investment house I just bought.
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I would have the other guy front the money. Two reasons, 1) your cash is free, and most importantly to me, 2) you are in control of the rehab. Don't let someone else ever been in control of the rehab with your money on the line. You need to control the budget and the time line.
 
Random said:
Mike,We're doing the wood floors this weekend, you had a system?
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Sorry that I am just getting to this.I know this is going to sound crazy, but it works.ASSUMING the wood floor is in good condition, there is really no need to strip and sand it completely down and start over. We go right over the top of the old work.Now, it's been a long time, but I seem to remember from your pictures that the wood floor was OK, it just didn't pop. Right?If that is the case, pick your stain (I use Min-wax "Golden Oak") and just put it on with a throw away "Chip" brush. The 3 or 4 inch one will save you time. Go right over the top, everything. If you have a weaker spot in the old stain"paint" a little more on. Let it dry a day.Come back with Poly, and use the same application process and "paint" it on as well. I use Min-wax "Satin" in rentals as it still shines but holds up to scratches better. In a flip I could very likely use Semi-Gloss so it would really pop!Yes, just go right over the top, don't sand any more than spot sanding to remove water marks and the such. Don't bother removing the old poly, don't worry about it. I understand, absolutely against the grain of common wisdom, but from practical experience, it will be just fine.Let the poly dry a day or two, and brush on another coat. (I'd do 3 layers for my own home). It will look great, and maybe even have a little Character.One thing I have NEVER been able to figure out and the Professionals at the paint store just don't believe me, but the same exact can of Poly, after opened, used the very next day will not have the Shine as it did the first day. I pulled my hair out on this one for a number of Jobs. Use all your Poly. If you have some left over, don't use it for the second coat. Save it for a small room, if you do half a room with an old can, and the other half with a new can, there will be a definite line where you stopped of different "shine"Half the people reading this won't believe it, but this is what I do, and it always looks great with a 5th of the labor normally needed. Try it out in a single room if you need to.Also, in a Flip, if you are not going to be walking on it much, it's one of the last things, you could just do a single layer of Poly.
 
Jeff Pasquino said:
BassNBrew said:
Jeff Pasquino said:
RKMoney said:
Random said:
RKMoney said:
About to put down a few offers on a few different properties so my main concern now is regarding taxes, specifically, what is the best way to pay the least amount of taxes?I can hold onto it for a year then pretty much not get taxed on it (profit will be ~100k) but would hate to hold on to it for that long. Could rent it in the meantime but again, what if the person who lives there causes problems for me down the road?Just looking for some suggestions. Worst case is that I'll flip it as quick as possible and simply eat the up to 50% tax hit I'll take.
Click to expand...
What kind of property? Residental? How are you not going to pay taxes by holding for a year? Lets see the #'s showing 100k profit.FWIW, I'm a noob in flipping, just about to finish up my first and can maybe give some feedback on your #'s if you want.
Click to expand...
Residential. Piece of property for sale is listing at 260k and cost for adding master bed/bth (~40k) will value home at 400k - 425k according to comps in same area houses that are 3/2. So, spend ~300k and sell house for 400 - 425k will produce ~100k in profit.I currently have a two family I rent out back in NY (Astoria Queens), condos being built on LIC and my accountant said the other day that I could be taxed ~ 35% - 50% with any gains I make by flipping additional property and not holding onto it for at least a year.
Click to expand...
Sell it on a lease option that CANNOT be transacted for 13 months. Done.
Click to expand...
Please explain this...I don't think there is such a thing as selling it on a lease option. Did you mean lease-purchase which should technically be a purchase-lease?
Click to expand...
BnB,I think there was legislation in NC that might make this illegal now - which is completely wrong IMHO.It is purely rent to own.Put a deposit down that is non-refundable. "Non-Refundable Option Consideration", or NROC.Usually 3-5% of the future purchase price.Agree on a time for the future sale and a price. It can be a window and a sliding price scale.Charge rent, some of which can go towards the future purchase.Wait for them to buy your house.TIP - get them in a credit rehab program. If they had good credit they'd be buying the place.That's about it.
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Sorry Jeff...I was trying to make a point at your expense. These terms get intermingled and mangled to the point that the average person has no clue as to what they're doing.1. Lease-purchase (should be called a purchase-lease): You are signing a sales contract with a future closing date and leasing in the interim. Contract is best prepared by a lawyer.2. Lease-option (really just an option because the lease has nothing to do with the purchase): You are signing a contract that gives you the right to purchase a property at a specific (could be based on appraisals) price during a certain timeframe. Generally you should expect to pay some type of consideration for the option. In NC this has to be recorded for it to be binding. If you're not giving consideration for the option then you're either dealing with a stupid seller or someone who's going to leave you high and dry if it benefits them.You don't "sell" something on a lease-option because title doesn't pass. Rent to own is another bogus term. If you're not signing a sales contract or recording an option, you have nothing but someone's word...verbal contracts are not binding in real estate. I run into buyers all the time that are burned by all sorts of schemes.I honestly can't think of a reason to enter into a lease purchase as a buyer (exception being waiting on another piece of real estate to close). All they do is limit your options. But I'm getting a rent credit...nope, you're paying above market lease rates. Negotiate the rent down and make the purchase when you're ready.
 
We chose one of my wife clients as our buyer's agents 3 months ago. We made an offer on a house today. He obviously would like us to use the mortgage company that he has interest in. We want to, and it makes sense that since he'll be collecting a commission for selling the house he doesn't need to make a killing on the mortage. I'm cool with that. How can I be sure the rate is fair? Should I go to Ditech.com and get quote to compare it to? Anyone just want to guess what our rate should be? We're getting 100% financed. An 80% 1st and a 20% 2nd. We have good jobs good incomes, and FICO scores both between 700 and 730.

Thanks!

 
Last edited by a moderator:
Ten Yard Fight said:
We chose one of my wife clients as our buyer's agents 3 months ago. We made an offer on a house today. He obviously would like us to use the mortgage company that he has interest in. We want to, and it makes sense that since he'll be collecting a commission for selling the house he doesn't need to make a killing on the mortage. I'm cool with that. How can I be sure the rate is fair? Should I go to Ditech.com and get quote to compare it to? Anyone just want to guess what our rate should be? We're getting 100% financed. An 80% 1st and a 20% 2nd. We have good jobs good incomes, and FICO scores both between 700 and 730. Thanks!
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I would try www.bankrate.com, at least you can get an idea, given your specs, what kind of mortgage you are looking at. That site will list a number or lenders depending on what type of loan, where you live, and how much you are looking to borrow.I would also check out major banks such as www.citibank.com just so you at least know if the rate your agent is on the up and up. What I do know is that anytime an agent wants you to use someone they know, you know they will get some sort of kickback so will that be beneficial to you? You won't know until you do a little homework and bankrate.com is a great place to start since it can give you a list of what lenders are offering.Here's what happened to me early 2006:I was living in NYC and looking to move to Austin, my cousin who lives in Austin told me a friend of his wife is an EXCELLENT RE agent and would definitely help me out. Long story short, she was terrible! Worst part was while in town, she said she knew a lender who "Has been in the business in Austin for the last 20 years and is one of the BEST!" I naturally wanted to go see him, what's the harm since he was so hightly recommended and I didn't know anyone in the town anyway. Well, his closing costs were about 6k higher than anyone else and he added a point to each lien. I felt like because he knew we were moving from NYC that while the closing costs would be less, he could bump them up and we wouldn't notice. When I began to check out other lenders ALL were significantly less, even one told me "Hey, I won't turn down that 6k if you REALLY want to give it to me but in all honesty, you are getting ripped off." Oh, and my credit is excellent, around 760, great job so there was NO reason why I would get a crappy deal.The point is that an agent could be someone who knows your extended family and still recommend you to someone who ends up not getting you the best deal. Hope this helps.
 
That helps, thanks RKMoney. This guy was upfront with me in saying that he'll make money off both the real estate commission and the mortage. He said therefore he doesn't need to make as much as a guy who is only going to see one side. I agree with that, I'll just use bankrate to keep him honest...

 
Ten Yard Fight said:
We chose one of my wife clients as our buyer's agents 3 months ago. We made an offer on a house today. He obviously would like us to use the mortgage company that he has interest in. We want to, and it makes sense that since he'll be collecting a commission for selling the house he doesn't need to make a killing on the mortage. I'm cool with that. How can I be sure the rate is fair? Should I go to Ditech.com and get quote to compare it to? Anyone just want to guess what our rate should be? We're getting 100% financed. An 80% 1st and a 20% 2nd. We have good jobs good incomes, and FICO scores both between 700 and 730. Thanks!
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Don't quote me on this, but I think he would have to disclose how much he will make off the mortgage. Accepting kickbacks is illegal useless you disclose what you interest is and what you will be receiving.
 
I was approached today by a good friend of mine with an "investment opportunity". He's an architect who's had his own firm for the last 5 years or so. His BIL who used to work for a contractor now works for him doing drawings. Well, they've been talking about trying their hand at general contracting and now have what seems to be a good opportunity. A developer in fast-growing area locally has offered him the chance to buy 5 preconstruction lots in a brand new subdivision to build on. These are $400-500k houses with about 300 planned for the community.

Now, here's where I (and a few others come in). My friend doesn't have the finances nor credit to do this alone. He has been advised to find individuals with good credit to apply for a construction loan each and basically let him borrow our credit to have the money to do this. He's offering $10k in exchange. Obviously, the risk is if the house doesn't sell in a year or whatever the term of the loan is. But I'm not too concerned about this really. They've already sold 35 lots w/o any publicity so far. My main concern is qualifying for the loan, but from what I read, this isn't like typical mortgage qualification. And we just bought our permanent house last year and a new vehicle a few months ago so we won't be needing our credit for the foreseeable future.

What else am I missing here? He says if this were to be successful, there's no reason we couldn't do it again after that.

 
BassNBrew said:
Jeff Pasquino said:
BassNBrew said:
Jeff Pasquino said:
RKMoney said:
Random said:
RKMoney said:
About to put down a few offers on a few different properties so my main concern now is regarding taxes, specifically, what is the best way to pay the least amount of taxes?I can hold onto it for a year then pretty much not get taxed on it (profit will be ~100k) but would hate to hold on to it for that long. Could rent it in the meantime but again, what if the person who lives there causes problems for me down the road?Just looking for some suggestions. Worst case is that I'll flip it as quick as possible and simply eat the up to 50% tax hit I'll take.
Click to expand...
What kind of property? Residental? How are you not going to pay taxes by holding for a year? Lets see the #'s showing 100k profit.FWIW, I'm a noob in flipping, just about to finish up my first and can maybe give some feedback on your #'s if you want.
Click to expand...
Residential. Piece of property for sale is listing at 260k and cost for adding master bed/bth (~40k) will value home at 400k - 425k according to comps in same area houses that are 3/2. So, spend ~300k and sell house for 400 - 425k will produce ~100k in profit.I currently have a two family I rent out back in NY (Astoria Queens), condos being built on LIC and my accountant said the other day that I could be taxed ~ 35% - 50% with any gains I make by flipping additional property and not holding onto it for at least a year.
Click to expand...
Sell it on a lease option that CANNOT be transacted for 13 months. Done.
Click to expand...
Please explain this...I don't think there is such a thing as selling it on a lease option. Did you mean lease-purchase which should technically be a purchase-lease?
Click to expand...
BnB,I think there was legislation in NC that might make this illegal now - which is completely wrong IMHO.It is purely rent to own.Put a deposit down that is non-refundable. "Non-Refundable Option Consideration", or NROC.Usually 3-5% of the future purchase price.Agree on a time for the future sale and a price. It can be a window and a sliding price scale.Charge rent, some of which can go towards the future purchase.Wait for them to buy your house.TIP - get them in a credit rehab program. If they had good credit they'd be buying the place.That's about it.
Click to expand...
Sorry Jeff...I was trying to make a point at your expense. These terms get intermingled and mangled to the point that the average person has no clue as to what they're doing.1. Lease-purchase (should be called a purchase-lease): You are signing a sales contract with a future closing date and leasing in the interim. Contract is best prepared by a lawyer.2. Lease-option (really just an option because the lease has nothing to do with the purchase): You are signing a contract that gives you the right to purchase a property at a specific (could be based on appraisals) price during a certain timeframe. Generally you should expect to pay some type of consideration for the option. In NC this has to be recorded for it to be binding. If you're not giving consideration for the option then you're either dealing with a stupid seller or someone who's going to leave you high and dry if it benefits them.You don't "sell" something on a lease-option because title doesn't pass. Rent to own is another bogus term. If you're not signing a sales contract or recording an option, you have nothing but someone's word...verbal contracts are not binding in real estate. I run into buyers all the time that are burned by all sorts of schemes.I honestly can't think of a reason to enter into a lease purchase as a buyer (exception being waiting on another piece of real estate to close). All they do is limit your options. But I'm getting a rent credit...nope, you're paying above market lease rates. Negotiate the rent down and make the purchase when you're ready.
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You have no idea why someone would buy a house on a lease?Maybe they WANT to own, but can't qualify due to their credit looking like Times Square January 1st at 4 in the morning. Maybe they have $ but can't get qualified. Maybe they can't do a conventional or first time homebuyer option due to being self-employed.Maybe they love that house / neighborhood but can't find another place to buy - only your lease/option is available.Maybe they don't want to pay equivalent rent to see 100% of the money go by the wayside.There's plenty of people who want to buy on a lease.
 
RKMoney said:
Ten Yard Fight said:
We chose one of my wife clients as our buyer's agents 3 months ago. We made an offer on a house today. He obviously would like us to use the mortgage company that he has interest in. We want to, and it makes sense that since he'll be collecting a commission for selling the house he doesn't need to make a killing on the mortage. I'm cool with that. How can I be sure the rate is fair? Should I go to Ditech.com and get quote to compare it to? Anyone just want to guess what our rate should be? We're getting 100% financed. An 80% 1st and a 20% 2nd. We have good jobs good incomes, and FICO scores both between 700 and 730. Thanks!
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I would try www.bankrate.com, at least you can get an idea, given your specs, what kind of mortgage you are looking at. That site will list a number or lenders depending on what type of loan, where you live, and how much you are looking to borrow.I would also check out major banks such as www.citibank.com just so you at least know if the rate your agent is on the up and up. What I do know is that anytime an agent wants you to use someone they know, you know they will get some sort of kickback so will that be beneficial to you? You won't know until you do a little homework and bankrate.com is a great place to start since it can give you a list of what lenders are offering.Here's what happened to me early 2006:I was living in NYC and looking to move to Austin, my cousin who lives in Austin told me a friend of his wife is an EXCELLENT RE agent and would definitely help me out. Long story short, she was terrible! Worst part was while in town, she said she knew a lender who "Has been in the business in Austin for the last 20 years and is one of the BEST!" I naturally wanted to go see him, what's the harm since he was so hightly recommended and I didn't know anyone in the town anyway. Well, his closing costs were about 6k higher than anyone else and he added a point to each lien. I felt like because he knew we were moving from NYC that while the closing costs would be less, he could bump them up and we wouldn't notice. When I began to check out other lenders ALL were significantly less, even one told me "Hey, I won't turn down that 6k if you REALLY want to give it to me but in all honesty, you are getting ripped off." Oh, and my credit is excellent, around 760, great job so there was NO reason why I would get a crappy deal.The point is that an agent could be someone who knows your extended family and still recommend you to someone who ends up not getting you the best deal. Hope this helps.
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Bankrate.com is a good start. Check with other lenders, let him know you're shopping the loan. If he doesn't like it tell him to back off, it's your money.
 
regularguy said:
I was approached today by a good friend of mine with an "investment opportunity". He's an architect who's had his own firm for the last 5 years or so. His BIL who used to work for a contractor now works for him doing drawings. Well, they've been talking about trying their hand at general contracting and now have what seems to be a good opportunity. A developer in fast-growing area locally has offered him the chance to buy 5 preconstruction lots in a brand new subdivision to build on. These are $400-500k houses with about 300 planned for the community. Now, here's where I (and a few others come in). My friend doesn't have the finances nor credit to do this alone. He has been advised to find individuals with good credit to apply for a construction loan each and basically let him borrow our credit to have the money to do this. He's offering $10k in exchange. Obviously, the risk is if the house doesn't sell in a year or whatever the term of the loan is. But I'm not too concerned about this really. They've already sold 35 lots w/o any publicity so far. My main concern is qualifying for the loan, but from what I read, this isn't like typical mortgage qualification. And we just bought our permanent house last year and a new vehicle a few months ago so we won't be needing our credit for the foreseeable future. What else am I missing here? He says if this were to be successful, there's no reason we couldn't do it again after that.
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Where are you?Markets matter for pre-construction.PM me if concerned about publicizing.Get a partnership agreement in writing dictating the arrangements of the $ here. Also cover as many exits as you can - what if it doesn't sell for example - and how things will be resolved. Get that nailed down while everyone is smiling.I wouldn't worry about qualifying, ESPECIALLY if you are going thru the construction / bank affiliated with the project.
 
Jeff Pasquino said:
regularguy said:
I was approached today by a good friend of mine with an "investment opportunity". He's an architect who's had his own firm for the last 5 years or so. His BIL who used to work for a contractor now works for him doing drawings. Well, they've been talking about trying their hand at general contracting and now have what seems to be a good opportunity. A developer in fast-growing area locally has offered him the chance to buy 5 preconstruction lots in a brand new subdivision to build on. These are $400-500k houses with about 300 planned for the community. Now, here's where I (and a few others come in). My friend doesn't have the finances nor credit to do this alone. He has been advised to find individuals with good credit to apply for a construction loan each and basically let him borrow our credit to have the money to do this. He's offering $10k in exchange. Obviously, the risk is if the house doesn't sell in a year or whatever the term of the loan is. But I'm not too concerned about this really. They've already sold 35 lots w/o any publicity so far. My main concern is qualifying for the loan, but from what I read, this isn't like typical mortgage qualification. And we just bought our permanent house last year and a new vehicle a few months ago so we won't be needing our credit for the foreseeable future. What else am I missing here? He says if this were to be successful, there's no reason we couldn't do it again after that.
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Where are you?Markets matter for pre-construction.PM me if concerned about publicizing.Get a partnership agreement in writing dictating the arrangements of the $ here. Also cover as many exits as you can - what if it doesn't sell for example - and how things will be resolved. Get that nailed down while everyone is smiling.I wouldn't worry about qualifying, ESPECIALLY if you are going thru the construction / bank affiliated with the project.
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metro Atlanta areaThanks for the good advice.
 
Random said:
Random said:
pics of the flip

kitchenBC

kitchenAB
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Little update her for ya. The kitchen (pics above) has been totally demo'd. Cabinets gone, soffet gone, ect. We have to do a complete redesign. We were originally just going to put the stove on wall A (left wall when facing the window - glass cupboard doors) and fridge on wall C. Move wall cupboards accordingly, eliminating the glass door ones, simple solution.But, the dishwasher door wouldn't open with the stove there. So we were going to move the dishwasher to the other side of the sink. Easy enough. But the cabinets are all one unit. We figured it would require too much work and look like a hack job to disassemble, cut, and attempt to reassemble so we took the wall measurements to HD/Lowes.

All new cupboards (stock, not custom) came back at $1200 for design 1. The arrangement is fridge on wall B in the AB corner, dw on wall B, other side of the sink, and stove in cutout on wall C. This leaves very little counter/cupboard space.

Design 2 was a little more, $1700 total, but utilized wall D (the one with the flashlight "thing") for the stove with countertops and cupboards around the stove. Wall A would be left empty (although we all thought about adding cupboards afterwards maybe another $200), dishwasher would be left where it is in the pics, and wall C would have fridge in the cutout. We all pretty much liked this layout better, with or without adding cupboards on wall A (not sure how this never got in the design, maybe there's a reason).

Wife is going to check out Menards today for designs/prices on their in stock stuff and we'll go from there.

Other notes:

We have grass comming up in the bare spots that were "patchmastered" (I love this stuff)

New tub and surround are in the downstairs bath

First floor is painted (except kitchen, one bedroom, and the bathroom) Ended up going with MAB with the paint because a friends mother in law runs the local one and is giving us the paint at a much better discount than our SW.

Powerwashed the house, deck and hottub. Amazing results.

Total money spent so far $1850. Includes:

$300 Tile for kitchen and bath and backerboard for bath.

$200 in paint

$800 bathroom (tub and surround, vanity, faucets, and plumbing)

$100 landscaping (patchmaster, hose, sprinkler, roundup)

And lots of misc stuff.

Still looks like we're going to keep it at/under 10K.
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Time for another update. Hard to believe I made the above post a month ago. So much has happened since then. We ended up going with Menards on the cupboards/countertops and wow, what a headache this has turned out to be. Our order came in a few weeks ago but one of the countertops was damaged so we sent it back. The cabinets were also a little rough (door screws missing/broken, drawer tracks were loose, doors hung on the wrong side, and some cabinets were actually physically damaged). I called the store and let them know we were sending a countertop piece back and that I would need the replacement asap. No problem, they reordered right away. I also let them know we were not very happy with the condition of the cabinets and that it took us alot of time to get them right.

Well the reordered countertop came in last weekend and it was the wrong piece. I was livid. We put off tiling the backsplash until the countertops get installed and now we have another week delay (at least). Ended up talking to the store manager, told him the whole story and he is going to completely refund our money on the countertops. I asked about the cupboards and he said I need to send in a complaint form (they mailed to me earlier) to get that taken care of because they have had many similar problems with their supplier. He assured me he would see that this was also made right.

So we have the floor tiled in the kitchen, cabinets up and still need to install the countertop and tile the backsplash to complete the kitchen. Main floor bathroom floor is tiled and the walls are also being tiled today (all the places formica was torn off the walls are being tiled). We've almost got the painting done upstairs but have yet to redo the bathroom upstairs (hopefully get to that this week). Most of the carpet/pad has been removed, deck has been stained (looks great!), and I'm guessing we're about 2 weeks from completion.

Total spent:

5,348.38

still looks like we're on pace for around $10k.

Mike, you had something to say about refinishing wood floors?
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Update:Just about finished. We've got a little touching up to do here and there but all of the major renovations are finished. We've spent a total of 13,643.11 on renovations, and another 1,627.76 in carrying costs to date. Total investment is 95,255.87. Had a relative do a CMA (comparative market analysis) and it came back at 134,700. Will be going up for sale within a week (we've got an electrical issue to figure out yet, among some little things to tie up). Thanks for all that have helped me along through this.

eta: Pics comming soon!

 
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Jeff Pasquino said:
You have no idea why someone would buy a house on a lease?1. Maybe they WANT to own, but can't qualify due to their credit looking like Times Square January 1st at 4 in the morning. 2. Maybe they have $ but can't get qualified. Maybe they can't do a conventional or first time homebuyer option due to being self-employed.3. Maybe they love that house / neighborhood but can't find another place to buy - only your lease/option is available.4. Maybe they don't want to pay equivalent rent to see 100% of the money go by the wayside.There's plenty of people who want to buy on a lease.
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I figured someone would trot out these arguments...1. If their credit sucks, 9 out of 10 won't repair it in time to complete the sale anyway. Generally most of these folks end up in worse financial straits after defualting on the sale.2. Anyone with a pulse can get a loan these days. I believe the premium for a no documentation loan is no more than a 1/2 percent. These really isn't a valid argument in this day and age. Serious, if you can't get a loan you probably shouldn't be buying.3. You're talking about a very rare instance or a foolish buyer. Regardless, they're paying a premium to get the house, might as well pay over-market value on the front end and be done with it.4. You know very well this is hogwash. In most markets it's cheaper to rent than own in the first place. You also know that very little equity is accrued in the first several years. Furthermore, in most of these lease-options, the "cash back" is just a surcharge added to fair market rent.Jeff, I see and hear about these scams and schemes everyday. Probably the reason why the gov't is stepping in. I really only know of two valid situations for either and option or a lease-purchase. One is if somebody has a home to sell elsewhere and can't qualify for two mortgages. The second related just to the option would be if someone wanted to pay a premium to test out an area before committing on a very unique property.Most lease-purchases are so heavily weighted towards the seller it's not even funny. Ethically I refuse to pray on the weak (exception being STAFF in a FF league). I realize most of these arrangements are legal and there's a sucker born every minute so it's a great business opportunity, it's just not the way I want to make my money. I do have one property that I might move in this arrangement...however there will be no cash back inflated rent or downpayment due on the front end. It will be an option that the will be drawn up by a real estate attorney and properly recorded for the buyer's protection.
 
regularguy said:
Jeff Pasquino said:
regularguy said:
I was approached today by a good friend of mine with an "investment opportunity". He's an architect who's had his own firm for the last 5 years or so. His BIL who used to work for a contractor now works for him doing drawings. Well, they've been talking about trying their hand at general contracting and now have what seems to be a good opportunity. A developer in fast-growing area locally has offered him the chance to buy 5 preconstruction lots in a brand new subdivision to build on. These are $400-500k houses with about 300 planned for the community. Now, here's where I (and a few others come in). My friend doesn't have the finances nor credit to do this alone. He has been advised to find individuals with good credit to apply for a construction loan each and basically let him borrow our credit to have the money to do this. He's offering $10k in exchange. Obviously, the risk is if the house doesn't sell in a year or whatever the term of the loan is. But I'm not too concerned about this really. They've already sold 35 lots w/o any publicity so far. My main concern is qualifying for the loan, but from what I read, this isn't like typical mortgage qualification. And we just bought our permanent house last year and a new vehicle a few months ago so we won't be needing our credit for the foreseeable future. What else am I missing here? He says if this were to be successful, there's no reason we couldn't do it again after that.
Click to expand...
Where are you?Markets matter for pre-construction.PM me if concerned about publicizing.Get a partnership agreement in writing dictating the arrangements of the $ here. Also cover as many exits as you can - what if it doesn't sell for example - and how things will be resolved. Get that nailed down while everyone is smiling.I wouldn't worry about qualifying, ESPECIALLY if you are going thru the construction / bank affiliated with the project.
Click to expand...
metro Atlanta areaThanks for the good advice.
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Atlanta's a big market and growing well last I checked - but I'm no expert on the area.Good luck.
 
BassNBrew said:
Jeff Pasquino said:
You have no idea why someone would buy a house on a lease?1. Maybe they WANT to own, but can't qualify due to their credit looking like Times Square January 1st at 4 in the morning. 2. Maybe they have $ but can't get qualified. Maybe they can't do a conventional or first time homebuyer option due to being self-employed.3. Maybe they love that house / neighborhood but can't find another place to buy - only your lease/option is available.4. Maybe they don't want to pay equivalent rent to see 100% of the money go by the wayside.There's plenty of people who want to buy on a lease.
Click to expand...
I figured someone would trot out these arguments...1. If their credit sucks, 9 out of 10 won't repair it in time to complete the sale anyway. Generally most of these folks end up in worse financial straits after defualting on the sale.2. Anyone with a pulse can get a loan these days. I believe the premium for a no documentation loan is no more than a 1/2 percent. These really isn't a valid argument in this day and age. Serious, if you can't get a loan you probably shouldn't be buying.3. You're talking about a very rare instance or a foolish buyer. Regardless, they're paying a premium to get the house, might as well pay over-market value on the front end and be done with it.4. You know very well this is hogwash. In most markets it's cheaper to rent than own in the first place. You also know that very little equity is accrued in the first several years. Furthermore, in most of these lease-options, the "cash back" is just a surcharge added to fair market rent.Jeff, I see and hear about these scams and schemes everyday. Probably the reason why the gov't is stepping in. I really only know of two valid situations for either and option or a lease-purchase. One is if somebody has a home to sell elsewhere and can't qualify for two mortgages. The second related just to the option would be if someone wanted to pay a premium to test out an area before committing on a very unique property.Most lease-purchases are so heavily weighted towards the seller it's not even funny. Ethically I refuse to pray on the weak (exception being STAFF in a FF league). I realize most of these arrangements are legal and there's a sucker born every minute so it's a great business opportunity, it's just not the way I want to make my money. I do have one property that I might move in this arrangement...however there will be no cash back inflated rent or downpayment due on the front end. It will be an option that the will be drawn up by a real estate attorney and properly recorded for the buyer's protection.
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BnB, I think we need to discuss this more. I'll get back to this topic shortly.I don't agree at all with this sentiment.Most people know you shouldn't lease a car either, yet many do. Is that wrong for car dealerships to offer that as a choice?
 
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Went to a Learning Annex deal in Chicago last weekend. Never been before, but had an opportunity to get the $400.00 VIP passes for $100.00 each, and stay at the Hyatt for like $40.00 for the night. Traveled about 4 hours one way up to Chicago.

Robert Shemin's was the Master of Ceremonies, and did a class on "Good Deals, Bad Deals" that was COMPLETELY worthless. I went to the very first breakout group with him after the intro meeting. I assumed was that we would gather even one single bit of useful info from the class. Perhaps learn about how to determine a good deal from a bad deal? What a novel concept. Not the case at all, it was a 90 minute info-less "Infomercial" with him pitching his product. EXTREMELY disappointed. I expected to learn something, anything from the hand picked Master of Ceremonies. I was quite disappointed to spend money just to attend and then sit through a 90 minute sales pitch without a shred of useful info. His class should absolutely be titled "Buy my stuff", as there was no value outside of that. EVERY other speaker at least took the time to throw out a useful tip or two. His talk had nothing, absolutely nothing to do with good deals and bad deals.

However I did pick up a couple of useful tips from Suzie Orman, the CNBC finance gal. She was course, rough, and mouthy. Not at all what I expected. If my notes are any good (I haven't checked this out) but she said that a person can buy PMI insurance in a lump one time sum from the private market and use it for any loan. As an example, she stated that you could just buy a $600.00 PMI policy that would cover a $100K loan as a one time shot, and be done. I haven't researched this at all, but she gave the site MGIC.com as a source. I don't pay PMI really ever, but I thought this was GREAT info. Her other bit of info that maybe I knew, but I'm not sure is that if you buy a second on a property, you have a legal right to assume the first at the terms of the first. Once again, need to research, but that it a way around applying for your own mortgage? I really don't know, but it deserves research.

Wayne Gray did a whole Tax Lien class that was eye opening, fantastic! Tax sales in my area just don't work like much of the country is what I learned. There is some real money in this that I need to research more.

Robert Bluhm provided great information as well. Tons of Football analogies. Lawyer who puses the Family Limited Partnership as the correct corporate structure. Basically he is the Defensive side of the ball. I really need to do some research here, but if what he claims is correct, the FLP is absolutely the correct corporate structure to be in. He claimed 100$ protection, period. I struggle with that absolute, but need to do some research. Extremely interesting.

I can't begin to say enough about David Lindal! All about buying Multi-families (Which is already my bread and butter). Great information given out. New ways to look at NOI. Also brought up the Angel network that I knew nothing of. Ways to acquire and manage good PMs. That's the way it should be, come to the classes and learn something. Dave was insightful, funny, and a great communicator. We bought his course, and I knew going in that I wasn't going to buy anything over the weekend. I was galvanized to not buy, but his program was a must purchase. That's how every class should be! Dave Lindal should be on center stage. His classroom was standing room only, with a line to get in the door. We were frustrated that it started a half hour late for seemingly no good reason at all as Dave himself was in the hallway trying to figure out why we hadn't started. That said, in retrospect, outside of the fact that my pregnant wife really needed to sit down, I would have stood there for twice as long. In our opinion, Dave was the Superstar of the Weekend.

I thought about going to Russel Whitney's talk, but that was canceled. I was ecstatic to understand that it was replaced with a talk about Land Lording. Unfortunately, that talk was canceled on Sunday as I attempted to go to it. So I headed over to the Reggie Brooks talk as I really wanted to go to that as well. Only it was canceled. With all the cancellations, there was no opportunity to get into the Tony Young talk as it was standing room only, with a line to get in, where the staff would only let in maybe 3 people every five (5) minutes or so. There were just too many people, with too many classes canceled on Sunday, it was difficult to get into see anyone.

All in all, it was a good weekend. Was it great? No, not really. Between the complete let down of the Robert Shemin class to the many cancellations (Remember, four hour car trip one way) it wasn't as great as it could have been.

At the end of the day, David Lindal by himself made the trip worthwhile!

 
Not counting rehabs that are in no condition to move into, and have been that way since we bought them (Not tenant damage), We were FULL for a whopping 5 days!

32 FULL Units, and all of my parents units that I manage and run were full as well.

Honestly, being full is what made me wait a little longer than I should have to file for an eviction yesterday. Because I missed a cutoff BY A COUPLE OF HOURS, the hearing won't be until Nov 22nd now (A Wednesday which is weird). But it does warm the heart to know they will have to get out over the Thanksgiving holiday.

Then I just found out today that another tenant lost his job a few weeks ago, but hasn't made any real effort to find another one. I know I'll file faster this time.

I think those 5 days makes me 100% full for about 12 days over the last 3 years. With over 50 units run, it's just the law of averages that 4 leases come open any given month.

 
Mike Anderson said:
Went to a Learning Annex deal in Chicago last weekend. Never been before, but had an opportunity to get the $400.00 VIP passes for $100.00 each, and stay at the Hyatt for like $40.00 for the night. Traveled about 4 hours one way up to Chicago.Robert Shemin's was the Master of Ceremonies, and did a class on "Good Deals, Bad Deals" that was COMPLETELY worthless. I went to the very first breakout group with him after the intro meeting. I assumed was that we would gather even one single bit of useful info from the class. Perhaps learn about how to determine a good deal from a bad deal? What a novel concept. Not the case at all, it was a 90 minute info-less "Infomercial" with him pitching his product. EXTREMELY disappointed. I expected to learn something, anything from the hand picked Master of Ceremonies. I was quite disappointed to spend money just to attend and then sit through a 90 minute sales pitch without a shred of useful info. His class should absolutely be titled "Buy my stuff", as there was no value outside of that. EVERY other speaker at least took the time to throw out a useful tip or two. His talk had nothing, absolutely nothing to do with good deals and bad deals.However I did pick up a couple of useful tips from Suzie Orman, the CNBC finance gal. She was course, rough, and mouthy. Not at all what I expected. If my notes are any good (I haven't checked this out) but she said that a person can buy PMI insurance in a lump one time sum from the private market and use it for any loan. As an example, she stated that you could just buy a $600.00 PMI policy that would cover a $100K loan as a one time shot, and be done. I haven't researched this at all, but she gave the site MGIC.com as a source. I don't pay PMI really ever, but I thought this was GREAT info. Her other bit of info that maybe I knew, but I'm not sure is that if you buy a second on a property, you have a legal right to assume the first at the terms of the first. Once again, need to research, but that it a way around applying for your own mortgage? I really don't know, but it deserves research.Wayne Gray did a whole Tax Lien class that was eye opening, fantastic! Tax sales in my area just don't work like much of the country is what I learned. There is some real money in this that I need to research more.Robert Bluhm provided great information as well. Tons of Football analogies. Lawyer who puses the Family Limited Partnership as the correct corporate structure. Basically he is the Defensive side of the ball. I really need to do some research here, but if what he claims is correct, the FLP is absolutely the correct corporate structure to be in. He claimed 100$ protection, period. I struggle with that absolute, but need to do some research. Extremely interesting.I can't begin to say enough about David Lindal! All about buying Multi-families (Which is already my bread and butter). Great information given out. New ways to look at NOI. Also brought up the Angel network that I knew nothing of. Ways to acquire and manage good PMs. That's the way it should be, come to the classes and learn something. Dave was insightful, funny, and a great communicator. We bought his course, and I knew going in that I wasn't going to buy anything over the weekend. I was galvanized to not buy, but his program was a must purchase. That's how every class should be! Dave Lindal should be on center stage. His classroom was standing room only, with a line to get in the door. We were frustrated that it started a half hour late for seemingly no good reason at all as Dave himself was in the hallway trying to figure out why we hadn't started. That said, in retrospect, outside of the fact that my pregnant wife really needed to sit down, I would have stood there for twice as long. In our opinion, Dave was the Superstar of the Weekend.I thought about going to Russel Whitney's talk, but that was canceled. I was ecstatic to understand that it was replaced with a talk about Land Lording. Unfortunately, that talk was canceled on Sunday as I attempted to go to it. So I headed over to the Reggie Brooks talk as I really wanted to go to that as well. Only it was canceled. With all the cancellations, there was no opportunity to get into the Tony Young talk as it was standing room only, with a line to get in, where the staff would only let in maybe 3 people every five (5) minutes or so. There were just too many people, with too many classes canceled on Sunday, it was difficult to get into see anyone.All in all, it was a good weekend. Was it great? No, not really. Between the complete let down of the Robert Shemin class to the many cancellations (Remember, four hour car trip one way) it wasn't as great as it could have been.At the end of the day, David Lindal by himself made the trip worthwhile!
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It is David Lindahl, to be correct if you're googling.I've seen a few of these.Russ Whitney - congrats on missing him.Bob Shemin - yeah, I concur.Suzie O - not surprised by your description. At all.We should compare notes in the off-season. I'm looking for commercial stuff right now.....
 
Mike Anderson said:
Random said:
Mike,We're doing the wood floors this weekend, you had a system?
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Sorry that I am just getting to this.I know this is going to sound crazy, but it works.ASSUMING the wood floor is in good condition, there is really no need to strip and sand it completely down and start over. We go right over the top of the old work.Now, it's been a long time, but I seem to remember from your pictures that the wood floor was OK, it just didn't pop. Right?If that is the case, pick your stain (I use Min-wax "Golden Oak") and just put it on with a throw away "Chip" brush. The 3 or 4 inch one will save you time. Go right over the top, everything. If you have a weaker spot in the old stain"paint" a little more on. Let it dry a day.Come back with Poly, and use the same application process and "paint" it on as well. I use Min-wax "Satin" in rentals as it still shines but holds up to scratches better. In a flip I could very likely use Semi-Gloss so it would really pop!Yes, just go right over the top, don't sand any more than spot sanding to remove water marks and the such. Don't bother removing the old poly, don't worry about it. I understand, absolutely against the grain of common wisdom, but from practical experience, it will be just fine.Let the poly dry a day or two, and brush on another coat. (I'd do 3 layers for my own home). It will look great, and maybe even have a little Character.One thing I have NEVER been able to figure out and the Professionals at the paint store just don't believe me, but the same exact can of Poly, after opened, used the very next day will not have the Shine as it did the first day. I pulled my hair out on this one for a number of Jobs. Use all your Poly. If you have some left over, don't use it for the second coat. Save it for a small room, if you do half a room with an old can, and the other half with a new can, there will be a definite line where you stopped of different "shine"Half the people reading this won't believe it, but this is what I do, and it always looks great with a 5th of the labor normally needed. Try it out in a single room if you need to.Also, in a Flip, if you are not going to be walking on it much, it's one of the last things, you could just do a single layer of Poly.
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I wish I had remembered this post. We are in the process of fixing up our house. We spent all last weekend stripping the old finish off the hardwood floor. Of course, I don't think Golden Oak would've worked too well, as the previous finish was Mahogany or something similiarly dark. Plus it had other weird problems as well.
 
At some point in this thread, someone asked me about this Triplex:

902 West Jefferson, MECCA of Civilization

It first came on the market at a Quarter Million, and then had dropped to about $228K when I was asked about it in this thread (Mid summer I think?). If you remember, it is 2 blocks south of my home, DEAD across the street from the really, very bad drug house that I am fighting. (At this point, we are starting to bring VERY good pressure down on the drug house, massive improvement!)

Anyway, Update:

It was actioned off Saturday Morning, and went for an even $100K. It was a steal if we actually get this drug house closed. I'm very glad the guy who asked about it a while back didn't overpay by $130K. :yes:

 
Mike Anderson said:
Her other bit of info that maybe I knew, but I'm not sure is that if you buy a second on a property, you have a legal right to assume the first at the terms of the first. Once again, need to research, but that it a way around applying for your own mortgage? I really don't know, but it deserves research.
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This is not true in Arizona or California. And I doubt it is true in any state because it simply doesn't make sense. In AZ and CA, in the event of a foreclosure or trustees sale by the senior lienholder, a junior lienholder has the right to completely pay-off the superior lien, but not the right to assume the terms of that loan. And, in those states, if a junior lienholder does not payoff the superior lien, then the junior lien is completely wiped out following the foreclosure or trustees sale.If the law required that a senior lieholder allow any junior lienholder to assume the loan issued by the senior lienholder to the property owner, it would, as you suggested, be a good way for a person to get around applying for a mortgage. It would also be a problem for the lending community, since now they would have no way to underwrite the risk and credit worthiness of their borrower. I would be shocked if that were the law in any state.
Mike Anderson said:
Lawyer who puses the Family Limited Partnership as the correct corporate structure. Basically he is the Defensive side of the ball. I really need to do some research here, but if what he claims is correct, the FLP is absolutely the correct corporate structure to be in. He claimed 100$ protection, period. I struggle with that absolute, but need to do some research. Extremely interesting.
Click to expand...
I'd like to see the reasoning behind this. I ran it past my partner in the trust/estate department (who often deals with FLPs) and his reaction was that a FLP is no more protection than an LLC or S-corp. There may be some arcane creditor rights issue or bankruptcy issue that applies to FLPs (I don't know if there is), but in my experience (and my partners), having practiced as a real estate lawyer for 14 years, I don't know of any advantage in having a FLP instead of an LLC.
 
jeff_eaglz said:
Some of you know me, but I'm sure many don't.I'm a real estate investor based in Maryland, but I have nothing to sell to you so let's get that out of the way right now.I've seen a few threads about real estate, buying / selling houses, so I thought I'd put this together to see if I can help anyone in any way.Of course, if you're local to the area we may even talk a little more about what I do and how I help people with issues regarding what for most is the biggest purchase of their lives, but I'm here predominantly because:1. I'm a FBG - and helping other FBGs is what this is all about.2. I'm considered an expert, not sure how that happened, but I guess 9 years in the investing biz will do that for you. I don't pretend to have every / all answers, but I can certainly put you on the right track.3. A general service / FAQ thread for the topic.The thread will address buying your own home, selling one, a second home / vacation spot, or investing in real estate in general. Residential and commercial topics are fair game.Let me know if you have any questions, I'll check this thread a few times a week if not more.NOTE:1. I've since been added to the FBG Staff since this thread started. Jeff Pasquino is my new handle on the boards.2. Many regulars are on this thread and they provide some great advice. Mike Anderson, BassNBrew, proninja amongst others. It should go without saying, but in this litigious world we live in, we have no choice but to say that anything we state in this thread should be taken as "food for thought" but not legal or business advice. You should consult a specific expert (lawyer, accountant, tax planner, etc.) for most every decision.3. Mike and I are on Staff here. All of our comments are as "regular guys" and are not made with the endorsement of FBG Staff. We are speaking on our own accord, FWIW.
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I had the opportunity to Welcome BassNBrew to the MECCA of Civilization this morning, and we checked out some of the empire.

He stated that it was a ton better than what he had been lead to believe from my posts. I must be doing too much doom and gloom when I post.

 
I have a Duplex I bought almost 2 years ago now. At the time it had a single HUGE 300K BTU Furnace, and Leases in place. We bought it in the Winter (Feb) of 2005.

That first winter, with the broken worthless Windows, Tenants didn't pay heat, you know where I am going, it was outrageous to get that first almost $700.00 monthly bill for Gas.

Last November we put in two High Eff. Furnaces. With one lease up, they got to pay their Gas bill. From what they told me, they (LOWER Unit) had a worst month of about $95.00 but that was the month that they left the Stove on for a good chunk of the day. I was able to go in and fix all these windows, rebuild them, and get them tight.

The upper Unit was still under a Lease last winter, so I paid their Heat. They ran $200.00+ a month, windows still not working well, two Window AC units in place all winter, Storms not down, nothing, but they didn't pay the heat.

I had a lot going on, and didn't push as hard as I should of, but once a month when I got the bill, I would get a hold of them and say that I would be happy to make the front (Worst) windows work better, it's Mom and Dad's bedroom. Never got the chance.

So, the Lower unit paid under a Hundred when they paid themselves, and the upper paid over $200.00 because I paid it. Heat rises, they should have been more efficient.

Anyway, this winter they are paying their own heat. The A/C Units are already out of the windows, and the Storms are in place for the first time ever that I have owned it!

I suspect I will get a Phone call to come and fix the Front Windows any day now. But they couldn't be disturbed when I paid the heat.

 
Red Comments

marshall88 said:
Mike Anderson said:
Her other bit of info that maybe I knew, but I'm not sure is that if you buy a second on a property, you have a legal right to assume the first at the terms of the first. Once again, need to research, but that it a way around applying for your own mortgage? I really don't know, but it deserves research.
Click to expand...
This is not true in Arizona or California. And I doubt it is true in any state because it simply doesn't make sense. In AZ and CA, in the event of a foreclosure or trustees sale by the senior lien holder, a junior lien holder has the right to completely pay-off the superior lien, but not the right to assume the terms of that loan. And, in those states, if a junior lien holder does not payoff the superior lien, then the junior lien is completely wiped out following the foreclosure or trustees sale.If the law required that a senior lie holder allow any junior lien holder to assume the loan issued by the senior lien holder to the property owner, it would, as you suggested, be a good way for a person to get around applying for a mortgage. It would also be a problem for the lending community, since now they would have no way to underwrite the risk and credit worthiness of their borrower. I would be shocked if that were the law in any state.

I will admit that it sounded hoaky, and now that you have commented (Bold Above), I would guess that was the comment that was really made, but it certainly wasn't spelled out clearly. However, if it did work, I was going to see how many $100.00 seconds I could get into! ;)

Mike Anderson said:
Lawyer who puses the Family Limited Partnership as the correct corporate structure. Basically he is the Defensive side of the ball. I really need to do some research here, but if what he claims is correct, the FLP is absolutely the correct corporate structure to be in. He claimed 100$ protection, period. I struggle with that absolute, but need to do some research. Extremely interesting.
Click to expand...
I'd like to see the reasoning behind this. I ran it past my partner in the trust/estate department (who often deals with FLPs) and his reaction was that a FLP is no more protection than an LLC or S-corp. There may be some arcane creditor rights issue or bankruptcy issue that applies to FLPs (I don't know if there is), but in my experience (and my partners), having practiced as a real estate lawyer for 14 years, I don't know of any advantage in having a FLP instead of an LLC.
Click to expand...
I don't know enough about it at all, and I haven't taken the time to research. I was going to sit with my Lawyer soon and ask some questions. Here are my notes, and please remember that I don't know what I am talking about here:It's a "Jay Mitten" FLP. (That made it special, but you know how these guys sell things)

Couple it with a Living Trust to avoid Probate.

IRC 704 of the Internal Rev Code - FLP established in 1916. Basically that it has stood the course of time, and there is case history everywhere, where there is not case history on an LLC.

I am the GP, and the Kids are LPs

If you are in a Corp, the other party can sue and gain your control in the Corp, then sell off the company, or keep it operating with no input from you.

In a Challenging Order, the other party would get Zero assets, and zero income. The best part was that if the other party won a Judgment, they would get nothing, but according to Revenue Code 77-137, that other party must pay taxes on the Judgment even when nothing is collected.

 
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Mike Anderson said:
I had the opportunity to Welcome BassNBrew to the MECCA of Civilization this morning, and we checked out some of the empire.He stated that it was a ton better than what he had been lead to believe from my posts. I must be doing too much doom and gloom when I post.
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:lmao: Maybe the drug houses that surround you might give a bad impression?
 
Jeff Pasquino said:
Mike Anderson said:
I had the opportunity to Welcome BassNBrew to the MECCA of Civilization this morning, and we checked out some of the empire.He stated that it was a ton better than what he had been lead to believe from my posts. I must be doing too much doom and gloom when I post.
Click to expand...
:lmao: Maybe the drug houses that surround you might give a bad impression?
Click to expand...
It's not surround. It's one basic property with 12 Drugged out Efficiencies, that pulls down the immediate houses.Just yesterday the house next to the ABOMINATION was set on fire by the Dealer that has been operating off the front porch. Good Times.
 
Mike Anderson said:
I had the opportunity to Welcome BassNBrew to the MECCA of Civilization this morning, and we checked out some of the empire.He stated that it was a ton better than what he had been lead to believe from my posts. I must be doing too much doom and gloom when I post.
Click to expand...
It was my pleasure to a first hand tour of MECCA from Mike. This visit really opened my eyes up to the fact that plenty of good opportunites still abound. Mike has accomplished a lot in a very short amount of time. Just a quick side note that I thought was pretty neat. Mike drove me past several of his properties. All were nicely painted and had the American flag flying. You would look down a street and could easily pick out the properties that were his. I thought that was really cool.
 
Mike Anderson said:
Jeff Pasquino said:
Mike Anderson said:
I had the opportunity to Welcome BassNBrew to the MECCA of Civilization this morning, and we checked out some of the empire.He stated that it was a ton better than what he had been lead to believe from my posts. I must be doing too much doom and gloom when I post.
Click to expand...
:lmao: Maybe the drug houses that surround you might give a bad impression?
Click to expand...
It's not surround. It's one basic property with 12 Drugged out Efficiencies, that pulls down the immediate houses.Just yesterday the house next to the ABOMINATION was set on fire by the Dealer that has been operating off the front porch. Good Times.
Click to expand...
:ninja: :ph34r: Yeah...I was kind of expecting "escape from New York" after reading Mike's posts. That said, I will take to heart the advice about counting the number of liquor bottles in the alley when evaluating the neighbors.
 
Good stuff here - thanks guys :thumbup:

I am working my way through the thread, but at 40+ pages it's gong to take awhile. I would definitely like to purchase an investment property and have been squirelling :moneybag: away for the last year or so where I could. I intend to do as much of the work as possible myself, but would obviously sub out when necessary. At some point I'd like to make this my FT gig.

One of my biggest :confused: areas is related to the tax/liability issues and whether or not I need to run everything through an LLC or some other similarly structured legal entity. What's the most appropriate approach or what things should I be thinking through r/e this?

ETA. FWIW, I'd be doing the rehab/flip approach.

 
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Tap, tap, tap.....this thing on ;)

I spent some time reviewing the info on my local investment association and it seems like a no brainer way to get some basic info. The annual memebership is $225 and it seems like this buys you a ton of access to info and "training". Am I being naive here or missing something? This seems like a great opportunity to see what I'm getting myself into.

Is this the ol' bait and switch? :unsure:

Any insight appreciated. TIA.

FWIW, I'm in Atlanta and am referring to this....

GA REIA

 
MC Gusto said:
One of my biggest :confused: areas is related to the tax/liability issues and whether or not I need to run everything through an LLC or some other similarly structured legal entity. What's the most appropriate approach or what things should I be thinking through r/e this?ETA. FWIW, I'd be doing the rehab/flip approach.
Click to expand...
This has been discussed at length in the thread. A lot depends on your state, but IMO it's a waste of time for most people and you're better off buying an umbrella liability policy and using the insurance company's lawyers.
 
BassNBrew said:
MC Gusto said:
One of my biggest :confused: areas is related to the tax/liability issues and whether or not I need to run everything through an LLC or some other similarly structured legal entity. What's the most appropriate approach or what things should I be thinking through r/e this?ETA. FWIW, I'd be doing the rehab/flip approach.
Click to expand...
This has been discussed at length in the thread. A lot depends on your state, but IMO it's a waste of time for most people and you're better off buying an umbrella liability policy and using the insurance company's lawyers.
Click to expand...
Thanks B - I did see a few posts that have helped, but I'm still working my way thorugh this puppy. :thumbup:
 
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