All Forum Posts by: Caleb Webster

@Alex Peterson Thanks, I have lawyer in Seattle but don't have one in Portland so that would be great. 

I was recently made aware due to a violation letter from the city of Portland that the plumbing and electrical work as well as the utility room addition on a house I purchased was done without a permit. The catch though is the seller said in the disclosures that all work done on the house was done with permits. What action should I take? I was planning on giving the seller a call and letting him know about the violation letter and that I will need compensation for the cost of pulling permits and the hassle. If he is unwilling, I will then have to resort to legal action. How would you guys approach the seller?

@Nate Morris That 28 unit seems like a rare find! What part of town is that? I’m set to close on a 12 unit in NE Pendleton on Thursday but looking for something a little bigger. How did you find the 28 unit?

And Mission Ridge is expanding too!

The model is here to stay, but regulations, margins and even platforms may change. We have passed the tipping point with the cultural perception and adoption of the model. The hotel industry is scrambling to act as they see their market share eroding. That said, I believe that the profitability of short term rentals will continue to decrease until maybe only the industry heavy weights or the owner occupants can stay afloat. 

@Melissa Murphy Great write up! Thanks for sharing your experience. Did you get a bridge loan and then refinance once the units had been rehabbed and rented out at higher rents? 

I am currently under contract on a 12 unit myself, a couple years behind you though since I’m turning 26 in a few months. 

Is it unusual to structure partnerships so that the sponsor/operating member of the partnership (the person that put the deal together and managed it) completely cashes out the equity partner during a refinance and assumes 100% ownership of the property? 

I've seen plenty of deals where all partners have their initial capital returned to them + profit split at the sale of the property but not sure how this would be structured if I want to own a property indefinitely but don't necessarily want to be in a partnership with another investor indefinitely. 

@Christopher Phillips 

Would a lease-option be the only way to take possession of the property without relinquishing the asset? 

My plan was to refinance after the property was stabilized. This can still be done as a lease-option, just with more risk to the seller I would imagine. 

@Christopher Phillips thanks for the quick response! What about a contract for deed arrangement? It seems that since a title transfer doesn't occur until the completion of the contract that it wouldn't trigger the 1031 window until title transfer.

I have a 12 unit under contract that was supposed to be seller financed. The terms were 0% down for purchase price but we bring all rehab costs to escrow, 1 year term. The seller then discovers after talking with a 1031 advisor that if he does this, it will trigger the 180 day window. We also looked into a contract for deed situation but the advisor said that this too would trigger the 180 days. Conventional financing isn't an option at this point.

This doesn't make sense to me since it seems like you would only be hit with capital gains taxes when you fully receive your 'capital gains'. Does anyone else have experience with seller financing and 1031 exchanges?