All Forum Posts by: Chris Calabrese

Although I don't personally use home inspectors on my purchases, I deal with a lot of them when selling and there is a wide variety.

As an investor or a buyer, I would want an inspector with actual construction experience. Some are former building code inspectors, which is even better. Either way, look for one who will really look into the details and look for any potential future or hidden problems (i.e. the stuff I look for when evaluating houses). To me, a bad inspection report says "water heater was working at time of inspection with no noted issues" while a good one says "although water heater was fully functional at time of inspection, the serial number indicates it was manufactured in 1997 and therefore may be near the end of its useful life". He should walk the roof to check for soft spots, not just view from ground, etc.

To answer the title question, I would gladly pay $400 for the detailed inspection rather than $200 for someone to test the dishwasher and flush the toilets.

Yes most states have a grace period in their LLT laws, usually 3-5 days, so you should check anyway. If you don't have landlording experience, check your local Realtor association, as they usually have standard state-specific leases that you at least know are legal. Then you can add your own clauses from there.

By the way, tenants on SS or pension are great - you don't have to worry about them losing their job! Plus older folks generally take better care of property and don't move as often. I wish there was a way to advertise for them without discriminating.

I'm not sure how many "cheapo" rentals you have, but have you considered self-insuring them? I know I've heard of investors doing this, but never really ran the numbers myself as I only have a handful of rentals and all but one are financed.

Obviously, you would need to carry a blanket liability policy, and you run the risk of a catastrophic event wiping out several properties in close proximity.

I have heard of similar cases where the first agent was awarded the commission because they were found to be the "procuring cause" of the transaction. However, without an buyer's agency agreement, they don't have much of a case. Bottom line, if you're an agent, don't show houses without an agreement, and ask your buyers if they have worked with anyone else to avoid confusion.

Regardless of when the timing is right in your market, it seems like if you're planning on building anyway, you could likely pick up some developed lots cheaper than buying raw land and developing your own. Whether either option would be profitable is a different story.

I know that here in Charleston, a lot of the big national builders are buying neighborhoods that have been developed (but not necessarily built), but then again this a quickly growing area and new home sales are pretty strong.

If they bring their own, I like to install them myself or check to make sure it's done properly.

Otherwise, I use it as a negotiating point. My new plan is to not advertise that they are included, and then charge an extra $25/month if they want one installed. That way I could buy a new pair every year if I had to.

I joined just to get the Lowe's discount, and it's been pretty good. They give you national account pricing, which according to one of the local Lowe's guys is sometimes below cost. It's definitely been below what I used to get from the "bid room".

I know they have tenant screening and other landlord stuff, but I haven't used it.

I know we had and FNMA under contract in the fall, and we were getting a 10% down NOO loan at about 4.875%/30-year, but maybe it's gone up to 15% since then. They were basically running about 1% higher than the equivalent owner-occupied loan.

Keeping it simple sounds good...most people overcomplicate everything. If she wants to reinvest, you could tack the interest onto the principal each year, in other words, compound it annually. That's probably why she wants to roll it over anyway - to grow her money faster - unless she's just trying to hide it for a while for some reason.

She will be responsible for the tax, but you'll have to send her a 1099-INT to deduct it legally.

I agree with J Scott. Just loan the money and pay a fixed return. Most investors will want 12-15% return, but I've paid as little as 8%. You can pay monthly, quarterly, annually, or the accrued amount after each sale. You have to be careful carrying over anything year-to-year, because your investor will still be responsible for their share of the taxes even if they haven't been paid out. You both need to ask your accountants the ramifiations of these deals.

If they want a % of the profit, remind them that in that case they will actually make less money the longer you hold the loan, which is bad investment for them. Also, with a fixed interest rate, they make a guaranteed return even if your project loses money.