All Forum Posts by: Crystal W.

There is some land available in a market I know extremely well. 5 years ago I proposed something similar to a builder who basically laughed and within 12 months, a huge developer came in and was doing EXACTLY what I had proposed.  I am equally confident on this deal.  

The problem that I have is: who to partner with and how to make it equitable?  It makes sense to me to partner with a builder who has knowledge and experience overseeing the actual construction process.  The civil engineering, subdividing the land, etc, I can primarily handle.  But I don't know what to propose.  For example (and these are completely made up numbers), if I expected the cost to be $1M with net profit of $400k, and wanted to have a builder partner, plus potentially 4 other investors, how would I structure that?  Should I create a partnership for this small development, or just draft a legal agreement between the partners and a separate investor agreement for "investors"?  If I were to put in 10%, should I expect the builder to put in 10%, or something less since he is bringing more knowledge?  Or should we consider it equal since I am bringing the deal and other investors?   Am I looking at this wrong?  

[For the record, this would not qualify as a subdivision, it is truly a small deal, where it would be building 5-7 homes in a cul de sac extension of a neighborhood].  

Thanks in advance for whatever advise you have to offer!

The place for the best advice (I hope).  

I came across what appears to be a fairly good property, but I am not sure about the repair costs as the Wholesaler said he does not live in town and thus cannot do a site walk without an offer.  I have never made an offer on a wholesale deal before.  Should I expect to get an option period for a few days for inspections and/or a home tour?  I am not going to make an offer with-OUT an out clause if I have not checked the home myself.  Or I could make it for what I believe is lot value, in which case, who cares what the repairs are (other than the fact I plan to do basic repairs for rental usage until the property appreciates for new build).  

I am also struggling with valuation as it is a bit of a unique property.  Double lot, with two houses (but only one address, not sure if I will have time to identify whether or not it can be subdivided, but based on my knowledge of the area, 90% sure it can), so not many true comps.  

Anyway, primarily want advice on what kind of contract/offer to make, contingencies, etc.  And would the expectation be for us to be in escrow before I can even see the home?  If so, what would you expect escrow percent to be?  (price will be $120-180k).

Thanks in advance for the advice!

We had tenants (roommates) who were supposed to be out as of November 22.  The one I had contact with told me that night he would not be done.  Then on November 23, when he brought the key to me, he informed me his roommate still had a ton of stuff there.  After several days of telling them to get it and pay an overage fee of $250, contact with the second roommate stopped (clearly did not want to pay the overage).  Roommate one emailed me a letter to relinquish the property, however, we have damage beyond what the deposit will support, "holdover" days since the home was not technically vacated, and now, we have to pay to haul everything away AND get it cleaned.

Well, lo and behold, original tenant who we had contact with, had rent on autopay and we received payment today.  

Is it acceptable to subtract the additional costs from these monies since I already have a full accounting done?  Or am I bound to refund the entire payment and then sue them for damages and holdover rent?  

Note: our realtor confirmed that there was no proration clause in the lease, so we could technically hit them for an entire month of rent for the holdover time, but we were only going to charge $250 as of last week, but now I can't even get someone to take the stuff for free, so there are additional fees.

(New landlord, and trying to do it on the up and up!)

Just wanted to bump this up.

Hi, all.  Have home on the market to sell and was approached to do a Lease-Purchase.  I understand the legalities, doing a 6 month lease with option to purchase, so don't need to take the conversation down that path, but had some questions regarding the nonrefundable option payment size and contractual language.

(1) What is a reasonable percent of purchase price to set as the option (note that it is a greater than $500k home)?

(2) Any sample language that has worked for you regarding nonrefundable option payment, that would be transferred at closing if sale goes through (or refunded, depending on how the deal works out,cash v. financing, etc).  I realize that makes it technically "refundable", but what we are trying to achieve is a true incentive to follow through with purchase.  We would keep the money if they didn't follow through, but will allow them to use it to fund closing or refund it to them post close.  Make sense?

Thanks for any and all advice.  This is really a one off deal for us, so want to ensure we use solid language.  We are proposing some language, but are going to vet it with a real estate attorney before we finalize.  I just like to see how others handle their unique situations to fully educate myself.

@Account Closed

The downpayment was $10k.  Nothing crazy, but nothing to scoff at.  However, now it is on principal to me as well.  And, don't want to let the cat out of the bag here, but I am an attorney so I could represent myself and would feel comfortable doing so in small claims court, I am just not a real estate attorney and there are a lot of nuances in real estate.  Which is why I was hoping to get some good insights from you all!  Either way, I also have friends who could do me a favor such that I wouldn't be coming out of pocket an extraordinary amount.

It appears my post from last evening in response to some of the questions did not show up.

@Wayne BrooksYes we checked 4a, which automatically means 4a1 applies, but we checked 42b such that it was not subject to financing approval.  We didn't need financing approval, but we did want to ensure that this did still have to make it through the standard protocols of lender financing and bank approvals.  OUR financing was not going to be an issue.  It is my understanding that the financing contingency is for if WE are approved, whereas 4a1 is whether the PROPERTY is approved by the lender via appraisal and underwriting, etc.

We put an amount in the line for 4a such that we were seeking a loan with only 20% down. 

@Greg H. It was a standard TREC, not sure if the mediation was checked or no, but I believe there is a way around that anyway.  Yes, the property has been marketed as ONE PARCEL, but had 3 legal descriptions and 3 different plots, 3 different tax bills and the current owner had 3 different mortgages/deeds, which I did not know until this issue arose.  Our lender just emailed and provided this response:  

"The reason that we were not able to proceed with your mortgage is because the way that the property is set up, it is ineligible for financing with Chase. It is parceled into 3 separate parcels with 3 different legal descriptions and 3 different tax ids, so it would have to be 3 separate transactions for us to do it. With that being said, if we try to do it as 3 separate transactions, we would run into the issue of them all using the same water meter, so that wouldn’t work either. Unfortunately, Chase wouldn’t be able to lend on the property for these reasons. "

I did send a demand letter, but only after I said we would be willing to provide $2000 to the seller as a concession since I genuinely wanted to make this go away and work.  He basically scoffed and laughed at me.  I still gave him till week end to decide, at which time I will file suit.  I just wanted to get some other opinions on what more experienced people thought.  

Additionally, I Wanted to see if anyone had experience dealing with an underwriting type contingency where this type situation has occurred and how it panned out.

@Joel Owens

 It is a standard TREC in Texas.  Title company is holding the money and has stated that they will not release funds until all parties sign or court declaration.  They will hold the money for 3 years at which time it will escheat to the state.  I would rather that happen than this guy get the money frankly.  But I am happy to sue and make it more difficult on them as well since they are being difficult.  I did try to make an agreeable arrangement and they were not amenable to that.  Also note, this all went down in a 5 week period such that the property was not off the market long and the seller had only had 1 other offer in the nearly 7 months the property was on the market.  It was also on the market 2-3 times over the past few years which makes me think that maybe this had been an issue before which they did not disclose.  I have a lot of unanswered questions at this point.  Something just doesn't sit right!

Hi, All.  We are currently in an Earnest Money dispute.  We were set to close on a vacation/investment property and at the 12th hour (literally 2 weeks prior to us thinking we were to close), our lender said the property could not appraise due to it being split into three legal lots, that the appraiser could not appraise it as one property nor several properties (note, we were contracting to purchase 3 units as one property which our understanding was that the property could not be subdivided, as it turns out, there were already 3 deeds on it and the current seller had 3 notes on it).  The details are numerous and I don't feel as pertinent in the scenario, but if you think more details are necessary, I will be happy to share further.

Anyhow, the lending agent basically said the bank would not be able to go through with it as one property or three because of the legal description issues and the appraisal issue.  We did not make the contract contingent on financing because we were pre-approved, however, there is a section that states the following:

"Property Approval: If the Property does not satisfy the lenders' underwriting requirements for the loan(s) (including, but not limited to appraisal, insurability and lender required repairs), Buyer may terminate this contract by giving notice to Seller prior to closing and the earnest money will be refunded to Buyer. "  

The seller is outright refusing to sign the document to release the funds.  Here are my questions:

(1) has anyone had an issue similar to this and do you feel it meets the contract provision for termination and refunding the earnest money.  (Note, we did try to find an equivalent lender and were unsuccessful anyway, almost everyone I talked to had concern for the appraisal)

(2) In Texas, can the seller put the property back on the market while the dispute is still pending or is that impermissible?  We will likely file suit either way, but it would obviously be helpful to know that the seller has the pressure of holding on to the property until this is resolved.  

Thank you in advance for any and all advice.