All Forum Posts by: Doug Woodward

Gentlemen, Thank you again for your responses.  Combining them, we are moving forward with a sense of confidence now.  This is the feedback we received from the city... "Things that weren't permitted before you is considered 'non compliant existing' and you will not have to redo anything". 

Thanks Will!

Great feedback Dennis!  The original thinking was that this was just going to be a quick cosmetic flip with no permitting needed.  Obviously, the risk is that at some point we might have to demo the addition if we move forward like that... curious to know if we don't invite the sort of scrutiny that permitting and passing inspections causes -- what the likelihood is of the worst-case scenario occurring?  Willing to take some risk, but not stupid amounts of risk.

We are buying a flip. The sellers bought the house 12 years ago with an existing addition.  We asked them, but they don't know if it was ever permitted.  We have two choices: 1) to rehab with all plumbing as is; 2) to increase the size of the original bathroom in the addition and to move vanity and make it a double sink.  The 2nd option would make the house show better, but without those changes there is no permitting that would be required, so no reason to invite the city in.  Have heard horror stories about having to demo an addition & that would totally blow our budget and make this deal a  non-starter.  Looking for advice on how to navigate this. 

We have the HVAC unit in a cage with chains around it as well, but there is still the exposed copper from the unit to the house. With freon and a new weld for the copper, it is going to run us $900.

We have the house under contract, but it is still in the option period and the house has not yet passed inspection or had the bank appraisal. 

The first question is, do we have to fix it to be able to pass inspection and make appraisal, or can we propose to the buyer that we will fix it before closing or give them an allowance for them to fix it after closing? 

If we do fix it, the house is vacant and it is likely to get hit again before closing (maybe even before the inspection and appraisal can be completed).  

This is not our first flip in this area (hence the cage and the chains), but after having both the inside and outside into smashed on the first one... the chains in addition to the cage seemed to be enough of a deterrent.

I haven't found a good way to protect that exposed copper. Any ideas?

We don't mind making the fix, I would just rather not have to make the same fix at ~$1000 a pop multiple times before making it to close. 

Thank you @Rick Pozos. I got what I needed from @Wayne Brooks response. I was asking if it was possible to wrap a RM as I am unfamiliar with them.

It doesn't sound like there is too much that can done around RM's creatively. If there is, I would be interested to know that. I think I am good now on the wrapping question. 

To the original post, we are not super eager to take this house down. Right now I am not in highly competitive situation here. If I was and someone wanted to up the ante I would bow out without blinking. This house is not falling apart like some of the flips we have done, but it is not anywhere close to being ready for the MLS.

Trying to figure out a way to do a creative deal here and looking for any ideas.

Thanks guys for taking the time to respond.

@Jason Hirko Yes the beneficiary died. The beneficiary left the house to the seller. No, the seller did not propose a Sub2. I was just trying to figure out how to mitigate the risk on this property because we don't like it for a straight up flip exit. What I am gathering from Wayne's response and yours is that RM's allow for very little creativity and to do anything with this property necessarily means taking the RM loan out of the equation.

Thank you, Wayne!

What's happening right now while it is in probate... penalties and additional interest?

We have an acquisition opportunity on an inherited home with a reverse mortgage, which is something we haven't dealt with before.

On a flip the numbers shake out as follows:

ARV - $300K

Repairs - $40K

Reverse Mortgage (according to seller's friend) ~$185K

The house is in N. Arlington (DFW).

Although the numbers are a little tight for the MAO calculation, our market can handle the tighter margin. However, we don't like the exit for a flip for a couple of reasons. The house sits very steep on a hill. DFW is relatively flat, so most homes have a somewhat level front and back yard here. The front yard is very steep and the backyard is almost entirely taken up by a pool, which is our 2nd reason for hesitancy. Not the best home for families with very young children or for those advancing in years, so we are concerned that we may have much longer DOM.

We have considered wholesaling it & still may -- not a whole lot of money there.

I considered seller financing it with a wrap.  Then this morning the Airbnb bug hit me again. The house is located 3.6 miles away from where the Cowboys and Rangers play and the XFL just announced they would begin playing in the ballpark that the Rangers are moving out of.  Six Flags is generally the same distance, 10 miles from DFW Airport and Arlington is basically the halfway point between Dallas and Ft. Worth. So, I thought about buying it through seller financing... but it has a reverse mortgage.  

The gentleman who took out the reverse mortgage has passed and he left the home to a non-family heir, because he has no children. There are no disputes, but the house is in probate and the attorney working the case for the heir is on a 25% contingency (25% of the net proceeds of the sale).

I really like the potential of an Airbnb deal, but our lives are not very complicated at the moment and I understand from some of the posts that Airbnb can be a whip.

So, my two questions are:

1) How does this reverse mortgage work? Is it possible to wrap one, or does it just need to be paid off (I am currently trying to research this myself too -- just in a bit of a hurry)?

2) Is anyone familiar with Airdna as an analytics tool for Aribnb and if so, what is your opinion of its value?

Thanks in advance,

DW

Quite honestly, I was a little tentative posting this question in this forum, but it seemed like the best subject fit.

I'm wondering if anyone has ever re-purposed a church building into a multi-family complex?

On this particular deal, there is plenty of parking and there is also a lot of raw land behind the existing structure.