bad mgmt, bad tenants, or no big deal?

Question

So...we have been trying to go and view two duplexes for sale by the same owner for over a month.   The mgmt company never answers the phone, and might call back once per week.  Each time they say that they can't get ahold of the tenants for us to go view the properties.  Does this throw up any red flags to you?

Peter MacKercher · Answer

If this is your first property i suggest not doing that. Evictions suck and most the time if the property is missed managed it will need a ton of work too. Go out and find you a good property that has good management in place and make a fair deal. If you have a ton of experience and know how by all means go for it.

Steve Olafson · Answer

Bad management is what you want.  That may be a source of motivation for the seller.  Make your offer based on what you would like to pay.  Make sure that you have plenty of time to do the due diligence and will be able to get your earnest money back.

If you discover issues with the operations, that is where you renegotiate the price.

If you want to play in the multi-family arena, you will need to be good at making properties run well and efficient.  Buying poorly run properties and making them run better can add a lot of value to your game.

Jennifer T. · Answer

That is going to depend on your city.  Where I live, people over the age of 65 don't get a discount at all, but their property tax amount is "frozen" at whatever the amount is when they turn 65.  In other words, their property taxes are never raised after 65.  If they sell their primary residence and buy another house, they will be paying the current tax rate at the time of the sale...but it isn't raised after that.  That is also the case for someone with a 100% disability.  However, this is all only true on their own residencies, not rental properties (unless it is a mutli-family and they live in one of the units).

Even if you are due a discount of some kind, you can't necessarily count on it for the same year you purchase the house.  I made that mistake.  I bought my home in May 2011 as a foreclosure from a bank.  They were paying beaucoup taxes as a corporation, whereas I was eligible for a Homestead Exemption (HE).  I assumed the HE discount would be applied to my rate for that year from the time of sale.  Nope, wrong.  My municipality won't change the tax rate during the year, so the discount wasn't applied until the next year.

John Santero · Answer

I agree with a few on here saying  the harder the deal - maybe the better the outcome. If you are having such a hard time- chances are others are too- therefore - no offers.

If it is listed on MLS, threw in an offer subject to inspection than you have room to lower the price again based upon what you find. I would not insult them with a really low offer but rather wait and adjust the price upon inspection. than fire the PM once you get it!

Patrick L. · Answer

Do a drive by evaluation and a make a low ball, worst case condition, offer with an inspection contingency.  If it's been on the market a while and the management is so so the owner may be motivated to sell.  Sometimes the best deals take a little more work and come with a little less hand holding.

Kenneth Hynes · Answer

NA Cummins

Echo the previous comments.  Do you have  investment property already and can use teh same amangement ?  Seems like a bad / disinterested PM, so that would be a deal breaker for me

Steve Olafson · Answer

Yikes!  The only thing that would scare me off would be the wall caving in.

DJ Cummins · Answer

well....we got to see all three duplexes last night.  All were for pretty close in price, and were priced the same as a nice 3bed 2 bath sfr would be.  Each duplex had major issues. One had fire damage in the basement, one had a leaky roof with an un useable bathroom- among other things, and one the whole duplex was leaning...got to the basement and the wall was caving in.  2x4s were bracing it from caving in.  It was a crazy night.  Back to the drawing board!

Peter MacKercher · Answer

I have never heard of a senior citizens discount on property taxis. But I'm 34 so I have not looked for one.

DJ Cummins · Answer

I have another question...is there a standard discount rate for senior citizen property taxes?  How can I estimate what the taxes will change to if I buy it?  Thanks to all as always!

bad mgmt, bad tenants, or no big deal?

Most Popular Reply