All Forum Posts by: Don Alder-LaRue

@Cory Riles try contacting Gateway Funding in Houston. They handle both hard money and conventional loans, so if you're doing a BRRRR property you can get it all done in one place.

What is the square footage of the house?  What's the estimated repair/improvement cost?  If using a hard money loan to purchase and rehab, the max loan amount is only $441,000 based on your $630,000 so this wouldn't make much sense as a flip.  What are rents in the area?  Will it cash flow if purchased with conventional financing?  If so, how much?  What's the estimated cash-on-cash return?   Information please.

You would want to pro-actively save for those expenses, yes, however the infrastructure in the park is not replaced often.   I've seen parks in SoCal that have been around since the 1930s and still have the same sewage lines.  That being said, they also decay over time and do need to be replaced.  Also, you need to know the amperage to the pedestals.  30 amp service is not sufficient for today's homes.  

If your park was built in the 60's or early 70's, you're probably good but still sock some away in anticipation of repairs.  Older than that, definitely  save and save quickly.  Newer than that, sock some away but you can sock less away.

You have to read your contract carefully to know if you can or not.  

My recommendation would be to contact your attorney today and have him/her go over the purchase contract.  It may cost you $250 or whatever he/she charges but that sounds like it would be less than you're losing on the contract.

Also have the attorney go over your listing agreement.  The listing agreement will govern if you can cancel your listing with this agent or not.  Most attorney's can find a way to get you out of it if needed, even if it's only by a simple letter on his/her stationary.  Broker's hate the thought of attorney's getting involved (I should know, I've been in this business for over 20 years and am married to an attorney).

If you feel you can't trust your agent, get rid of this person ASAP.  Your agent has a fiduciary duty to YOU, and you alone unless he/she is also representing the buyer.  In that case, they still need to treat each party honestly and fairly.  It is possible that the agent doesn't know what they're doing, but if they're giving you bad information and aren't watching out for your fiduciary interests then you should get another agent.  From what you said in your post, this looks like an agent only looking out for their own wallet, not yours.

I got your message.   I never upgraded.  

@Brad Rondeau Easiest way is to list the property with a RE agent BUT make sure you sign an "entry only" or "limited service" agreement. Make sure the contract is very clear that this is for MLS entry only, and that the information entered into the MLS is also pushed to third party sites (Zillow, Trulia, Realtor.com, etc). This should cost you about $100 - $200.

I'm not sure how many MLS there are in Orange county. Here in the Coachella Valley we have 2 associations of Realtors and two MLS. But don't worry, the MLSs actually share information so when a listing is entered in one it will also show up in the others. I can even access the Orange County MLSs from here (and do, I just put a property under contract in Orange County).

PM me if i can be of any help.

@Aaron Smith  I don't have a comprehensive list of MHPs across the nation, but California is easy to get.

I don't know about other states, I haven't looked, but California requires MHPs to register with the state.  The name of the park, address, number of spaces, and contact person information is all right there for the taking.  PM me and I will give you the URL.

It's not so much that they have no other remedy.  If the defect is discovered prior to close of escrow, then you negotiate.  If it's discovered after, you still try to negotiate.  That's most of what this business is, negotiation.  If a seller is being a real jerk about something they were obviously hiding, sometimes the threat of a court action can make them change their minds quickly.  When it is that obvious they were hiding something, it's almost certain they will lose.  I've seen sellers hide holes with furniture, and one guy even tried using contact paper to cover a hole in a wall.  Not smart.  Always disclose.

There's another clause in the C.A.R. purchase contract, one that I do not often recommend the buyer initial.  The arbitration clause.  Even if it is not initialed, a buyer and seller can go to arbitration if there is a disagreement, either before or after closing.  If it's initialed, you're forcing the issue of arbitration and removing your opportunity for a day in court.   I do not recommend the parties initial the arbitration clause because on the C.A.R. purchase agreement is binding arbitration without judicial review.  One the arbitrator or arbitration panel has come to a decision it is binding and final.  With judicial review the decision can still be appealed to a court.   

I'm not an attorney, but I am married to one.

There are actually a few levels of inspections we use in CA.  

1.  When the listing agent takes the listing, he/she should complete C.A.R. form AVID, Agent's Visual Inspection Disclosure.  The agent simply walks around the interior and exterior of the home and notes any defects seen.  They do not open cabinets or drawers, move furniture, or test appliances. 

2.  After an offer is accepted, or better yet when showing the home and being pretty sure the buyer will make an offer, the buyer's agent completes the same form C.A.R. AVID.   Most agents don't do this when they're supposed to and wait for the general inspection to come in and take items from that.   This is not the way its supposed to be done but it seems to have become common practice.

3.  Wood Destroying Pest Inspection (Termite Inspection).  This is optional, though I never write an offer without one.  Who pays for the inspection is negotiated in the contract.  Locally it is customary for the seller to pay, but I do have a property currently under contract where my buyer is paying for the report (bank foreclosure, bank will not pay for the termite).

4.  General Inspection.  This is paid for by the buyer.  Even if the seller has opted to have a professional home inspection completed prior to listing either by their own accord or at the request of the listing agent the buyer should have their own inspection completed.  The inspector should check all the major systems of the home and search for deficiencies and deferred maintenance.  Remember, not all homes will meet current building codes.  A home built in 1972 will most likely not have GFCI outlets in the kitchen and baths for one example.   It is from the buyer's general inspection a request for repairs is created and negotiated between buyer and seller.

5.  Based on the outcome of the general inspection, the buyer may opt to have additional professionals check items the general inspector has declared borderline.  If the roof appears to be approaching the end of its useful life, a roofer may be brought in for both an estimate and professional opinion.  Same with AC, or other major system.  Any quotes can be used as negotiating tools with your repair request.  The seller may also request quotes based on the repair request. 

6.  In two local cities (Cathedral City, and Palm Springs) a fire department inspection is required prior to the close of escrow.  They test the smoke detectors and ensure a carbon monoxide detector is present in the home.  Escrow cannot close without these inspections.

 In regard to items blocking defects (furniture hiding a hole in the wall for instance).  Neither agent nor inspector is likely to know about this, and therefor you have issues with the seller not disclosing material defects in the home that affect the buyer's perceived value.  In other words, you may have a court case and should consult an attorney.

@Cody Godfrey, @Chase Louderback Loopnet can be a decent source, but even a lot of CRE agents don't realize that if they don't have the absolute premium package of CoStar their listings will not show up on Loopnet (discovered that one for myself, darn it).

Instead of just keeping an eye on loopnet (which is a good idea since FSBOs can list their property for sale there) contact a CRE agent and ask them to set up an alert in CoStar for you. This will get you the listings that aren't showing on Loopnet as well.