Recovering From a Bad Investment

7 Replies

Hi All,

I am new to BiggerPockets but have been following the forums for some time.  I am looking for some investment advice on the sale of a rental property I have out in Alpharetta, GA.  The property is a single family home with a finished basement.  The upstairs living area and basement are segregated, with a 3 bed, 1.5 bath in each unit.  The basement unit is currently rented with a long-term tenant.  

I recently purchased this property back in February 2018, but since then I have had a laundry list of issues with the property since I closed the deal.  Some information during my purchase wasn't disclosed by my agent and I found out after the fact.  There are high-voltage power lines running through the backyard of my house and I recently discovered that duplexes are not legal in Forsyth County.  These facts came out of a refinance appraisal earlier this year after I purchased the home.  In addition, there were a laundry list of repairs which I had to complete over the course of the year.  Now I am in a situation where my top unit is having trouble renting, it's been on the market for 2.5 months.  Needless to say, I am considering selling the house now.

Has anyone every dealt with this situation and are there any strategies that I could implement to sell the home faster?

Thanks

Originally posted by @Jaysen Medhurst :

@Shyam Panchal. Have you considered offering to sell to the downstairs tenant? Maybe as a lease option?

One of your units is illegal (assume the basement) and you don't want to play with fire there.

Hi Jaysen,

Thanks for your reply.  Part of the issue is that my tenant in the basement is a refugee from another country (also not disclosed during the purchase process).  I don't think the family would be legally allowed to purchase the home, nor would they have the funds.  I am thinking the worst case scenario is that I sell for a discount..but still exploring other options.

Thanks

Shyam  

Why are you having trouble renting the top portion?  Is it in good condition?  Is it the location?  Is it the price?

 I am in Alpharetta area.  If I can be of any help please don't hesitate to reach out.

Hey Shyam,  I would be interested in a call to further discuss.  There are several options, if I knew the address I could probably make a few suggestions on options.  We are in Alpharetta in Windward so near by if you wanted to have us take a look.  Atlantic Property Management

Greg Kurzner, CEO

Originally posted by @Rod Joseph :

Why are you having trouble renting the top portion?  Is it in good condition?  Is it the location?  Is it the price?

 I am in Alpharetta area.  If I can be of any help please don't hesitate to reach out.

Hi Joseph thanks for your response.  After a few months on the market, it looks like the reason why it's having trouble renting is because there are tenants living in the basement.  The top level and bottom are segregated though.  There are some issues, however.  I asked my previous realtor to check if this house is a proper multi-family house.  I later discovered that she did not check everything.  It looks like tenants will have to share utilities and the HVAC system is not segregated, unfortunately.  In addition, multifamilies are apparently illegal in Forsyth County.  Granted, part of is my fault for not checking these details myself.  However, I did ask these relevant questions prior to buying.  Unfortunately, I live out of the country so would be difficult on my end to check everything.  If you have any advice, would be great to hear your take.    

Originally posted by @Greg Kurzner :

Hey Shyam,  I would be interested in a call to further discuss.  There are several options, if I knew the address I could probably make a few suggestions on options.  We are in Alpharetta in Windward so near by if you wanted to have us take a look.  Atlantic Property Management

Greg Kurzner, CEO

Hi Greg, thanks for reaching out, definitely will give you a call.  Interested in hearing what advice you have.  I recently tried to sell the house but with no offers unfortunately. I'll explain when I call.

Things I would look into:

1. Evict the tenants in basement.  (last resort)

2. Look into making the HVAC dual zoned. 

3. Think about short-term rental. ( AirBnb, VRBO...)

4. Try lowering rental price until you get a tenant for top portion.

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