All Forum Posts by: Bob Beach

Today, we signed the extension for the buyer with gritted teeth. Too many delays costing us more so hopefully, the buyer will have the funds on the new date. We will end up with the house we want just costing us a little more.

Thanks for the advice and comments.

We invest in rental properties and are in the process of selling one house and buying another. We were supposed to close on the house we are selling today. Then close on the house we are buying on the 14th, if not earlier. We are up against a 90-day deadline for a 1031 exchange due to a house we sold 3 months ago. The buyer has one delay after another. The contract says, they can inspect the house within 3 days before close. We gave them the lock box code and they said they couldn't get in. We confirmed the lock box code, then they said there was bad weather. Third attempt, they said there were people in the house and wouldn't let them inspect and the people were combative. We sent our property manager out with the police, a few hours later, and no one was in the house and no signs of forced entry. The buyer is blaming us for the delays and now, they are changing the closing date to the 17th because, their financing package has not arrived yet.  We already signed closing ($150 remote fee) and the selling company for the house we are buying is asking us to get insurance so we can close. The company has already got a tenant in place, as of the 4th, so we are losing money every day the first house is delayed, not to mention, still paying utilities and insurance on the first house. Do I have any recourse to be compensated for my loses? The only thing my agent said was that we can walk away and keep the $1000 deposit. Then I pay capital gains tax on the house we sold 3 months ago. 

Thanks for any advice. 

@Kenneth Darling, I didn't realize, there were so many PMs in the area. My searches only came up with a few. But it's been a while. I actually used my current property manager around 10 years ago, for a couple years. The house was very new and had almost no maintenance issues. For that reason and that the one in charge of my house had a condescending personality that the tenants didn't like, and I didn't like. When I contacted them just over a year ago, they said, that person was no longer there. So here I am. 

@Michael Smythe, Yea, there's no simple answer. We've had rental for almost 10 years and a handful of house in TN and MS. Gone through as many PMs in those states. We currently have one PM we are very happy with and another "mostly" happy with. Every one of them has a monkey wrench in how they run things. So yea, we've made mistakes but at the time, they don't seem like mistakes. We take the word on the PM and make a decision. But they tell you their tenant screening process that sounds good, then they get you a tenant and within 6 months they stop paying rent, get evicted and steel your new stove when they move out.  I guess, right now, I'm starting my research for 10 months from now (contract time frame). 

I appreciate the good advice and the list of PMs for me to go over. Thank you very much.

I just passed the one-year mark with our current PM. I've had more disappointments than positive moments. From almost day one, mistakes were made, and I pay or argue to get them to chip in. They told me there would be an inspection on a certain day before the tenant moved in. After that, I get an email of small things to fix or clean. We drove up there (1.5 hours each way), resolve the issues on the list. Two days later, they go do another inspection and now there's "new" things to resolve and they claimed, that was the "real" inspection.  So we end up paying them to resolve those issues. Then, the gas stove had an issue. They sent their guy out and he calls me and says, it needs some parts. I ordered the parts, had them sent to his place. When he gets them, he says, he won't install them because of a gas line was bent and I should buy a new stove, He kept the parts.  More recently, the hot water heater had a leak. From everything I can see from photos and the repair guy, it had been leaking for a while, long enough to have black mold all over the base platform and up the wall behind it including rotting the base so it needed replacing. I sent the PM about 10 legal documents that say, the tenant is responsible to report a leak right away or they are responsible. They had to know about it since the water went passed the door going into the house from the garage. They would have to step over the water. Cost me and extra $300 for the mold and repair to the base. PM says, they talked to, I believe the director, and he said the tenants are in no way responsible.  They seem to be on the tenants' side when I'm paying them.  So now I told them to do an inspection of the house in case there is some other issue. The charge is $100.  In an email, they only said they did the inspection, and the house is being taken care of. I asked to see the report with photos and no response. Second request, no response. Third request, after a week, they said they would have photos soon. I have a feeling; they didn't do an inspection but maybe just a quick look and was going to charge $100 for that. 

So, any good PMs in Yuba County?  And don't say "Trident". Thanks for any suggestions. 

 Hey Yea! Thanks for the heads-up!!

OK, I see lots of information that I did not think about. The house is under $100k which our agent says it's harder to get a loan on this amount. So, the seller finance makes more sense. But the $2300 down payment, $2500 over asking and paying the fees seems, not quite right. Our goal was to get rid of our older houses which need more maintenance ($$) and invest in fewer but newer houses. We're trying to get rid of the added stress of monthly repairs and simplify things. We have a couple newer houses, and they are almost invisible, just a monthly income. That said, hiring lawyers to write contracts, background and credit checks on strangers that already look nefarious may just add to the stress that we're trying to get rid of. Especially, if the deal goes sideways in a year or two. I see some good info about down payments being bigger, buyer damages the house then defaults, etc.. Another odd thing was the same buyer added a second option of a cash purchase that was close to half the asking price. Maybe to have extra cash for repairs. 

Anyway, we've made a decision, based on all the advice and knowledge from everyone here, to continue to look for a real buyer.  Thanks for all the great advice. It's very much apricated. 

We're selling a few houses in Memphis, and we have interest (letter of intent), on one house that's requesting, "Seller Finance". They're offering a few thousand more than asking and will also pay agent fees. Our agent is not an expert on this type of deal but suggested a short loan term of 3 or 4 years and a balloon payment and written up by a lawyer.  I've always steered clear of anything like these offers. Has anyone done any of these types of deals?

Thanks for any knowledge on this.

I believe Stephen pointed me in the right direction. I didn't know why I would need a license and for what. A bit of research and finding the LV .gov page and I see all the rules. And I don't fit into any of the requirements. 

Gregory, you're right. I don't want to own a hotel. I pictured a management company that handled rent collection, cleaning service, etc.. I think, for now, I will focus on a long-term lease if this idea turns into reality.  Here's a bit from the Las Vegas website on short term rentals. Thanks for the responses: 

A short-term residential rental is a unit such as a house or condominium that is rented out to guests for less than 31 days in a row. To operate in the city of Las Vegas, this requires a business license. To be eligible for a license, the home must:

• Be ‘owner-occupied’ throughout the rental period. This means the homeowner must reside on site during the guests’ entire stay. You would need to make this clear to your potential guests when you advertise the rental.

• Have no more than three bedrooms at the property, which would include the homeowner’s bedroom.

• Be located at least 660 feet from any other short-term residential rental, as well as 2,500 feet from a resort hotel.

• Be in a zoning area that allows short-term residential rentals.

• Have written permission from your Homeowners Association (HOA), if applicable.

We're considering changing our investment strategy. We have a handful of properties in TN and MS, mostly older homes and maintenance is starting to dig into our profits. We also have two newer houses that are fairly trouble free. So, we're thinking of selling the older houses and buying a newer house in Las Vegas (within 5 to 10 miles from Fremont/Strip area). I know nothing about Airbnb's so considering an Airbnb compared to a lease on a SFH. The Airbnb's I've seen are mostly condos and apartments, so can a sfh be an Airbnb? Lease the house would bring in about $2200 per month (minus tax, ins.) and so what would an Airbnb bring in? Can you keep it rented on a regular basis?

Thanks for any advice and knowledge. 

 You may want to consider a PM for a least the first year of a first out of state property. Screening and placing a tenant, they know local rules, they have eyes that can see the property and know what is going on there. A PM sends someone for maintenance and that's valuable info on how the house is being treated. A PM knows how to get the utilities going quicker if permits are needed. One year should show a track record of the tenant to see if you want to deal with anything bad or good.