All Forum Posts by: Edward Burns

@Zac P.

While not necessary to say anything imo, I would advise them to watch that clothes particularly those having metal snaps, zippers etc be kept clear of the heaters as these can be heated to a temperature that can cause 2nd degrees burns if they contact bare skin.

In addition most electric heaters will give a distance that should be kept clear. An electric wall heater I have states to keep area directly in front of the heater clear for 3 feet. That is no problem because of the location and small size (12"x12").

@Todd Fox

Buying homes from HUD is different. HUD has very specific rules that must be followed. Information can be obtained from http://www.hudhomestore.com/ListingSiteFAQ.htm

As far as liens, they are generally all voided, but it is possible that 1 or more got missed or are stilled attached. In addition, most public utilities (particularly water and sewer) may have a valid lien for unpaid service usually they waive these but not always. Any of these problems will be caught by a title search which is required as part of the closing. Just be sure to choose a closing company that has experience with HUD foreclosures.

Congratulations on getting the duplex under contract. Best of luck with the deal and keep us informed.

Apparently, you either bid on the place sight unseen, or failed to check on the bathroom before bidding and/or before the time limit for submitting the final bid paperwork (i.e. 48 hrs.) The following rules apply:

HUD Home Store FAQs: Consumers and the General Public U.S. Department of Housing and Urban Development: August 2010

16. If I don’t like the home that I chose, can I decline the acceptance? The purchase of the property may be declined at any time, but may be subject to earnest money forfeiture.

17. What is the earnest money held for, and can I get it back? Earnest Money is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious about wanting to complete the purchase.

If the seller accepts the offer, the earnest money is held in escrow by the real estate broker or by a settlement or title company until closing and is then applied to the buyer's portion of the remaining costs. If the offer is rejected, the earnest money is usually returned, since no binding contract has been entered into. If the buyer retracts the offer or does not fulfill its obligations under the contract, the earnest money is forfeited.

18. When can I complete a home inspection on the property? All purchasers are strongly encouraged to perform a walk through inspection at or near the date of your contract acceptance and, again, immediately PRIOR to closing. If a purchaser discovers a property condition that did not exist at the time of sale they must immediately notify HUD's property manager of the damage. The purchaser or agent should complete the Property Damage Report and fax it to the appropriate fax number listed on the form. Reporting the damage does not guarantee the correction of the problem that has been discovered. The lack of written documentation describing property condition at contract acceptance, however, will preclude consideration for repairs or price adjustments in the event of subsequent damage. Each case will be looked at independently and a determination will be made as to whether the damage will be repaired (or not repaired) or, under some circumstances, credits given at closing. The buyer assumes full responsibility for the property and its condition on the date of closing. HUD assumes no responsibility and will make no settlement for damages reported to HUD after the close of escrow.

Believing that you are buying to hold, there is no question I would go with the duplex. It will provide a positive cash fairly easily and while the SFH may provide a positive cash flow, you have a big question mark with the furnace.

If you are looking to flip then the SFH becomes more attractive.

Personally I believe that you should change furnace filters every 3 months. While there you can visually check to see if there are any blatant problems. In addition, you can ask the tenants if there are any problems. A slow drip from a faucet or an occasional sticking toilet float may not warrant a call to a landlord for repairs, but they might mention the problem in person. These are usually easily fixed, but they do cost money if not addressed. Plus it shows your tenants you care.

@Charles Morgan

I do not wish to sound like I'm picking on you, but you should had notified the gas company and had them locate the leak with a gas detector. By digging up the line when pressurized, you may have struck a rock creating a spark which could have resulted in an explosion and fire. Years ago I investigated a gas explosion, a new bank building called because of a gas odor, the bank was evacuated except for a gas company employee and the bank manager and a leak confirmed. I do not know why, but one of them picked up a phone and began dialing a number. No more bank, no more bank manager and no more gas company employee.

I know that FedEx was at one time handling mail transport for USPS, I do not know if this relationship still exists. But FedEx has posted on their site that shipments to the Midwest may be delayed because of winter storms and have stated they will not back their delivery guarantee because of it.

That stated, does this tenant check with you monthly to see if you received payment or is this the first time? If the first time, it would raise a red flag to me.

First step is to find out the zoning. That will affect the value of the land.

I am glad you were able to dodge the apparent bullet. While I can appreciate that property deals can happen quickly, I would be very leery of any seller calling me about a property and telling me I needed to make a decision like now.