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Ask a local realtor if there is any impact.Probably minimal if not too loud nor any impact to the scenery.
Thanks; I'm inches away from bidding on a house but I'm worried about how loud the tracks are so I'm going to go hang outside the house this evening and see if I can gauge the loudness.
Very good idea.In general, visit a house you may move to at different points in time - day, night, weekends - if at all possible or you don't know the area.
I had help from 2 friends during the process...a builder buddy, who physically went to a couple of the properties we were serious about--this was to address any obvious problems w/the property and estimate the cost to repairthe 2nd was my real estate agent buddy, who pulled trailing 12's---he sent an email file with the sales records of the properties in the neighborhoods were were considering from the last 12 months by zip/street
Good stories.
One comment - please define for everyone "Trailing 12s".
I used to live about a three wood from a RR crossing that was another three wood away from the plant I work at. After three days I didn't even notice the crossing whistle and it never woke me. Transferred 500 miles away and dealt with the same plant years later. I could actually hear the whistle over a conference call. For most people, you will get accustomed to the noise and not notice it.
Sorry, had to be done 
.Bring 'em on
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Start with this:Running a Project
Real Estate Brokers? Make the offer in a Company name, where you have "power of Attorney". Happens all the time when I buy a place from an almost dead snow bird. Their Agent or Broker is the representative, and signs all the paper work. Set it up with the Title company of your choice, and then write in the use of that Title company as part of your offer.It's just like the Land Lord who never states he owns the building to the Tenant, only that he is the Manager.Really though, and I mean this, you will be dealing almost always with a seller that owns his home and a single rental. He won't be connected, he won't have a stable of properties, he won't have anyone to even talk to about it.Even if you are worried about the selling agent, you just make sure to get them working for you. If the Agent across the table knows that you are buying, and will buy any deal that fits your criteria, you just became a return customer. The Seller is almost always a one time deal.Really, don't sweat it. Buy a few, just a few, and you will be known as Buyers, not someone who beats people up for a few grand. Agents will flock to you, not the other way around. I bet I get 15 calls a month from Agents directly hawking some property to me, I turn them down flat some 99% of the time, and when I do go, I undercut like crazy. Trust me, they will call back again. I have an Agent that I don't go to, he comes to me, and when he does, I beat his teeth in. Last year, I talked him and his seller into reducing the price by Half. Half.The guy is going to continue to call, because a Slam dunk sale at even Half of selling price, where he takes both sides of the commission is better than having the place sit on the market, and run through financing some 3 times falling apart each time before it sells.Anyway, My serious advice is to Low-ball and build.
And How Buckwheat.Earlier I relayed a time where a Guy bought the house in the $60K range years ago. I have 3 comparables that I own that all appraised with in the past year at $100K or just shy of that.
If you are going to rent out the Home you live in, you need to go and talk with an accountant. The first half hour is likely free, and all these questions will be answered.#1, take your starting figure (Go talk to an accountant to get the best starting figure for your needs), divide that by 27.5 Take that much off your taxes each year.
There is a whole lot to cover here, and I have lots of thoughts in my head. Surely I will forget something.First, when renting out your own home, you can throw the fair housing stuff out the window, and you can discriminate. Just like a FSBO can opt to only sell to a Catholic Family, you have tons of leash here.
Jeff's reply made me think of more things here.They are indeed paying too little. The risk is all yours, at least get some reward. Do not subsidize their housing. What would be the going rate for them. Don't give away a break, you will grow to greatly resent that down the road.Good questions here.If this wasn't your plan, I'd say don't be a buyer of a house - rent or lease.
But, looks like you have a creative solution. I love those
Is 550 the best you can get? I'd pitch it to your friends such that they cover $300 each. That way you can replace yourself at the house in a year or so if need be with another $300 renter (preferably $325, with $25 a year increase written in the lease) to cover your costs.
If your friends flinch - you say that you are putting your neck out to be the only one on the mortgage and in a year if you move, you'll need to get a property manager so that pays for part of it.
I doubt that they will be that unnerved by paying $300 rather than $250, unless it is that big of a deal.
I'm going to stop answering tax questions until we get an accountant on the thread. Real estate is great for tax savings, but I pay someone to figure all that out for me.
As for mentioning it to the bank - there's no need to do that now and it might put them off if you are already thinking that way. Some are skittish and might "flag" your loan (if they don't sell it) for check-up in a year or two to see if it is now non-owner-occupied (NOO). This can trigger a due on sale clause or at least a rate call (bank wants to charge you more).
If you just "changed your mind" in the future and decided to rent it..... that's another story.
If you start to show a pattern though you may have a problem.
You do not want a rental that you can not easily visit in the future. Not every property manager is going to be Bass. There are some true losers out there. Lots of them.I will restate and jump on Bass's comments:
Have your Dad talk to your accountant about the various Trusts available. Something where he puts it in trust, and you are the beneficiary of the Trust, giving you control.Not my area of strength, but I would look at a trust.
Depending on what you want to accomplish, please check with various appraisers in your market before going this route. In my Market, a Manufactured home is still an albatross, and a poor investment. It's really only because of perception, but that's the way it is. It is still lumped in with Mobile Homes by definition.Now, if you want to retire to this land, live there until you die, and never refinance it in any way period, build whatever, it won't matter.
The Home I live in is Downtown, with RR Tracks maybe a Block and a Half to the North. My Home has doubled in Value in the past 8 years in a poor stagnant market.I never thought about it at all when I bought. For weeks in my first summer with the windows open, I was awakened at various times in the night as the Train crosses a road 2 blocks from my house, and lays on the horn every time it gets close. The flashing lights and warning bell of the crossing must not be enough.
Excellent Advice. Also you don't want to be on the outside of a curve, as more Cars than you think will be up in your front yard year after year. There is a spot not far from here right beside a public park where the road curves around the City Tennis Courts, makes another curve right in front of some HIGH END Houses, and then straightens out to proceed.
I wonder what the working definition of "an event outside of your control" is, and how you would prove it.Surely something like Divorce wouldn't qualify? Very interesting.My accountant brought something interesting up today. If you're at your primary residence for under two years, and an event outside of your control forces you to move, you can take the percentage of two years that you lived there and apply that to your $250k/$500k exemptions.
Let's assume you're a married couple and live in a home for 18 months after which you are forced to move because you got laid off. The new job was too much of a commute, so you multiply $500k times 18/24, and you've got the exemption for your capital gains taxes. As long as your gain wasn't more than $375k, no capital gains tax.
This is in Washington State, and I am definitely not offering tax advice, and am not a professional accountant.
edit: Preliminary tax numbers look like I can make almost all of my income in 2005 go away and not have to pay capital gains I thought I was going to have!
I want to give my accountant a big hug.
COSI is just another index that a loan can be tied to for figuring out the rate.It is an adjustable loan.
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Wow, that's not a small question. You will need to get more specific with what you are asking.On your time line:
This is VERY RISKY!!! Seriously, Most of America lacks vision. I can't tell you how many times I was able to knock thousands off the price because a house with Pink Carpet sat on the market. I save an extra 5 grand off my already low bid because not a single person in the process thought about spending $500.00 to replace the pink Carpet in the Living room.
Help me to understand. He is asking for a $10K Finders Fee???
Outside of Leveraging to acquire more property, I am VERY old school. I haven't commented in some of these posts because my strategies are not the best to make money with. For example, take ProNinja. This guy as ABSOLUTELY taught me more a ton about working money, and you know, he is absolutely correct through my research and thoughts on the subject. Only I am not comfortable with some of the risks he advises. Absolutely correct, just not for me.My concern on your plan is that you are not leaving yourself a nest egg/security blanket. $90K saved - $40K down - even say $45K for rehab = -$5K. You know your Finances, but I would find a way to leave $10-$20K on the table. Trust me when I say that your Rehab is going to run WAY over if this is your first attempt. You don't have the cost saving connections or route battle plan in place. You are going to run over. Now, I would say that the normal first timer, certainly doing his own home would run over some $40K all said. However, you seem to have a buddy who can help keep you grounded.
Can you better explain this buddy's Financial arrangement with you? I get a red flag there. Something doesn't feel right somehow, but there is not enough info to comment.I strongly believe you are cutting your capital too thin.
I'd just like a small amount of additional specific info.No finders fee at all - what I meant by this was that he believes that this is property is around $10k below mkt value. For his purposes, as a pure investor, he would need to get it for $170k to make it work (based on his conservatism and his short term timeframe to turn it around as an investment). He can't make it work, he knows we're looking, and passed it on as a potential lead for me.
I agree that we're probably going to use up most of our liquid savings - but this is what we've been saving it for... Just to make sure we're on the same page, during this project I'm going to be able to 1.) make the monthly payments on the home & the apartment we live in now and 2.) continue adding modestly to the "security blanket" fund. With around $90 to $95k of purchasing power through the summer, I guess I feel OK with using $40k for the downpayment + closing costs and a project cost of $50k. I guess it's a short-term risk I'm going to have to balance...??As far as overruns... I feel like I'm mitigating some of the risk with being available to do some things myself by being home often to work on it. His $50k estimate is with 3rd party contractors doing all the work. I'm sure it will be more than I think, but I think I can cancel that out with his knowledge & my ability to work on portions of it myself...??
So far - no formal "on paper" arrangement. This will need to be done, I agree. We've discussed a sort of co-GC kind of plan. I rotate for my job, so I will have 3-week chunks of time (every 6 weeks) that I am completely away from the office and can focus on this project. I plan on working full time on our house when I'm home (bouncing questions off of him as they come up). When away, I plan on paying him - per an agreement - a general rate to watch over the progress of my project. Because he works in the same neighborhood, it should be a relatively easy deal to pop over and check on things...thoughts?
Maybe I should avoid paying 20% down or paying cash for the entire project? What would be the best use of my $$?
Awesome - you'll probably hear from me again down the road
I'd love to hear more - thanks for the help so far!!TOADSJeff and ProNinja are certainly the man for the initial investment.
For the record, this was an excellently laid out question.
Dead on Jeff.The only tine I have EVER seen this even talked about is when someone was trying to use Smoke and mirrors to confuse you.
I'm just going to bring everything to the bottom, as I will confuse the Quotes soon.Completely understand that he found a winner, but it is not a winner for him. I operate WAY under the market, and pass on sweetheart deals all the time. I wish I had a buyer to pass things off to from time to time. Actually, my Wife has a Business model that has never been implemented where she passes off every bit of my work product, numbers, everything for a small gain in her pocket. She has a Realtors license, just as I do, only I will never use mine. Buying and rehabbing is so much more rewarding than selling.No finders fee at all - what I meant by this was that he believes that this is property is around $10k below mkt value. For his purposes, as a pure investor, he would need to get it for $170k to make it work (based on his conservatism and his short term time frame to turn it around as an investment). He can't make it work, he knows we're looking, and passed it on as a potential lead for me.I agree that we're probably going to use up most of our liquid savings - but this is what we've been saving it for... Just to make sure we're on the same page, during this project I'm going to be able to 1.) make the monthly payments on the home & the apartment we live in now and 2.) continue adding modestly to the "security blanket" fund. With around $90 to $95k of purchasing power through the summer, I guess I feel OK with using $40k for the down payment + closing costs and a project cost of $50k. I guess it's a short-term risk I'm going to have to balance...??As far as overruns... I feel like I'm mitigating some of the risk with being available to do some things myself by being home often to work on it. His $50k estimate is with 3rd party contractors doing all the work. I'm sure it will be more than I think, but I think I can cancel that out with his knowledge & my ability to work on portions of it myself...??
So far - no formal "on paper" arrangement. This will need to be done, I agree. We've discussed a sort of co-GC kind of plan. I rotate for my job, so I will have 3-week chunks of time (every 6 weeks) that I am completely away from the office and can focus on this project. I plan on working full time on our house when I'm home (bouncing questions off of him as they come up). When away, I plan on paying him - per an agreement - a general rate to watch over the progress of my project. Because he works in the same neighborhood, it should be a relatively easy deal to pop over and check on things...thoughts?Maybe I should avoid paying 20% down or paying cash for the entire project? What would be the best use of my $$?Awesome - you'll probably hear from me again down the roadI'd love to hear more - thanks for the help so far!!TOADSJeff and ProNinja are certainly the man for the initial investment.
For the record, this was an excellently laid out question.
) makes a great point that the overhead ceiling fans should have separate controls for the light and the fan so you don't have to pull the cords a thousand times to get the fan right. Everyone hates that, separate controls is the ONLY way to go, you just put it on High, and have a 3 setting switch on the wall built into the same light switch. However, this requires another wire run. No big deal you think. It's just the way it is going to work. The Carpet your Buddy uses that is good enough won't be good enough for your home. The list of things you are going to go over his normal quality on is about Everything in the house. It's just the way it works.
MA - good to know someone else is up at these hours that I can bounce things off ofJeff should also have some comments on what your Rehab might take. It's great that you have a "Pro" in the mix, but I am telling you, I RUN OVER from time to time, and I've been doing this for a decade. I had one this summer that ballooned to 300% of budget. It happens.
In your case, the Wife is going to want the High end stove, where the buddy was thinking a mid range, and it gets away from you starting there.
One of the MOST expensive things that can happen to you is changing plans. You get everything set with the Electrician. After the fact, your Wife (Most likely the wife
THIS IS WHERE the Electrician just rapes you. Piles on, and goes nuts. Anything you change costs you a mint. All these contractors know that you are going to change things. This is where the New Rehabber gets eaten alive. They don't know what they want, and Changes happen at 4 to 5 times the going rate.
Trust me, your Wife (and You) are going to change things as you go along in your dream house. Who wouldn't??? I would, I'd change everything. This is my Dream house, and if I see something in the construction that could be better,. I am changing it.
All I am saying here is that this isn't your buddy's normal flip. This is your dream house, and YOU and YOUR WIFE are going to really run the price up here.
Did your Buddy allow for the top top end Faucets in the Bath? He didn't in his figure. He doesn't use those. Your Wife is going to want them, remember, this is her dream house.
This is going to get away from you. I do this for a living, and if I was standing right beside you, doing everything I could to help, well, then it would get away from US.
I am off on a Tangent here, but the point is that you are not leaving enough of a Safety net, and that is coming from a guy that is a "bit more conservative than other 'rehabbers' "
So back to the Co-GC deal. You need to follow his vision, and accept less than perfect, or he needs to accept yours and up the budget. If you each run for 3 weeks at a time, you will not be happy with the product unless you buy into what he is selling. Someday I will tell you about my first and only partner. This was exactly our issue.
I really appreciate your 'real world' perspective on this topic ... it's obviously not something I have had a chance to gain yet in this arena. I'll surely be interested in hearing from some others as to the ways to solve / work around the cash flow issue. As for the budget, I need to sit down and make sure our budgets & ideas are aligned with our goals. You're helping me realize that I'm probably a little too far ahead of myself with visions of grandeur & a smoothly delivered project. Thanks for the good words! I've been through several of his finished homes and have been impressed with his work & quality. 
In my martket on Long Island where an easy train ride to NYC is key, Being close to the RR in a NICE neighborhood adds a ton of value - People want to be able to walk to the train and not deal with the parking mess and then be in NYC in a little over 30 minutes....The further you go north from the tracks where I live the less value there is in homes - I don't attribute that totally to the RR but, I know we needed to be walking distance and we paid a premium....
By under contract I mean at closing. I realize it would be great to have the gc lined up well before that time but how does one do that if you haven't worked with a specific gc for any length of time? I mean, at what point is it a good time to bring a gc into the project to assess what it may cost to handle the things you can't. I don't have a specific example in mind, I just know I wouldn't want to be interviewing gc's after closing hoping to get a good one who will be available to work on the place when I want them to. I don't want to waste their time or mine and especially not my profit. Oh and please describe an example of your punch list.
This has been the downfall of many an inexperienced investor in my market area. There is just too much new construction going on here for a GC to bother with side jobs. Networking is one of the most important keys to success in flipping. If a contractor hasn't had previous experience working with you, it will take a couple of weeks for them to come out just to give you an estimate. Even longer if the job is not very big, and it's not uncommon for them to not come at all. The bottom line is, if you don't have an "in" with the kind of contractor you'll be needing on a specific project (drywall, electrical, excavating, etc.), you'd better be prepared to do it yourself. If you can't because of time or lack of talent, about 75% of your time is going to be wasted waiting for a contractor to get around to you. A flip that looks like it could get done in two months turns into nine months. You can still make money, but it's no "get rich quick" deal.
This is VERY RISKY!!! Seriously, Most of America lacks vision. I can't tell you how many times I was able to knock thousands off the price because a house with Pink Carpet sat on the market. I save an extra 5 grand off my already low bid because not a single person in the process thought about spending $500.00 to replace the pink Carpet in the Living room.
Don't get me started on this, people are clueless and very stupid when it comes to visual appeal.
Have you ever watched any of the House selling shows on HGTV and the likes? How many times does a potential buyer walk in, look at a great house, love everything outside of the Counter tops in the kitchen, and then pass on the house? All the freaking time. It's the carpet, the bathroom, the paint colors, something.
On the first example of counter tops, the average sized counter top, to buy a Granite slab is just a few hundred bucks, really, lets say $150.00. Then another say $300-$400.00 to have it professionally installed. So these people pass up a great house over the silliest thing for $500-$600.00 in pretty simple improvements.
People seriously lack vision. Seriously. It is absolutely frustrating and comical.
Showing someone, certainly a woman a place with rough, non carpeted floors is most likely a death knoll.
Only way I have really found to combat it is to show them a finished product first, let them "oouu and ahhh", build up confidence that your places are all spectacular. Then you STRESS that the next place is NOT FINISHED, but you won't let anything go that isn't ready, only they might like to see the floor plan, and if they LOVE it (Always tell everyone that you don't want them to move in unless they LOVE it. Makes life sooo much easier, trust me.) they could go ahead and help with some of the selections. It's certainly not ready, you just want them to see the Floor plan.
I seriously, EVERY TIME, go so far as to tell them that there are two types of people in the world. Those with Vision, and those without who need to see a finished product. I don't care which you are, but I am certainly not going to show you a house that is not finished if you are the type that needs to see it finished. I challenge them, make then want to see it. Plead with me, the works.
All said, that when i started out with that line of chatter, I just expected that each and every person would accept it as a challenge, and want to see an unfinished house, just to see the "floor plan". The reality is that OVER HALF pass when I run this at them, and say that they really need to see it finished. Absolutely mind boggling.
Dead on Mike.
Proninja hit this one. I'll add on.A local bank is probably your best answer here - but it is NOT called a "rehab" loan by most banks. This is a CONSTRUCTION loan, despite the fact that you're not really building anything new - just renovating.
Ultimately the business is about relationships and people. Treat EVERYONE you deal with fairly and equitably and everyone remains happy. "Win win" and you'll do more than just one deal with these people.....
Looks like I need to buy in Seattle
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Bass, When the Wife and I took Real Estate class, it was driven into our heads that one of the advantages of a FSBO is that you could discriminate. The example of only selling to a Catholic Family was the exact example used.
Thanks for the extra info. I think after reading a lot of the advice here and thinking on my own, I'm going to look at just buying it myself and not worry about getting a roomate(s). The two students I would've gone in with couldn't go above a certain price, which basically wouldn't be that good for me...although it would help. I'd be sacrificing tons of privacy and freedom to have them do that and for me it's just not worth it.
proninja's radar should have gone off by now
.Determine how much $$ you want to keep in your pocket and what that's worth to you. For me, I want cash - so I finance as much as I can. That allows me for "capital improvements" - which in your case would be buying stuff for the house.
Mike,That applies to the 1968 Federal Fair Housing Act only. Our state act is much narrower and doesn't exempt the sale of a private or single-family home under any circumstance. Furthermore, the Federal Civil Rights Act of 1866 declares, without exception, that "all citizens of the US shall have the same right, in every state and territory, as is enjoyed by white citizens thereof, to inherit, purchase, lease, sell, hold, and convey real and personal property.
Bass, that was sent to me in an Email form. I deleted the Email, but I am trying to get another copy from the service so I can forward it to you.I did find the Executive order in full at
It will be a month or so at minimum before any major database will be updated. Your best bet is to go down to Records department and look it up. However, if it just sold yesterday, it still might not be entered straight away.
