All Forum Posts by: Hope S.

I have come across this situation a couple of times - the MLS lists a 4 Unit multi, with rents for 4 Units. Somewhere in the communications, usually a realtor email or verbally, we're informed of a 5th unit. It may conform to code, but the town does not list the property as a 5 Unit.

My question is - how do you handle this in your offer price?  Completely discount the 5th unit?  Partially discount?  If you think its more likely than not the town would approve the 5th unit?  

I am currently analyzing a deal where the seller has factored in the 5th unit in his asking price.  I don't think its reasonable to pay that if I'm taking the risk of getting legit.   

Advice and opinions welcome.

thank you!

thank you both.   This is what I thought.  I think the realtors are more used to residential loans perhaps.  

We are working on a loan for a 5 unit, using a commercial loan from a credit union.  The credit union has requested the seller's IRS Schedule E.  We're getting some pushback from the realtors, suggesting this request from the credit union is unusual.   Wouldn't a big bank also require the Schedule E?  If the seller cannot produce a Schedule E will we have some alternative way to verify the numbers for our lender?

Thank you all!   There are so many levers to pull it helps to know what the options are.  We're currently using a credit union and all realtors involved roll their eyes when they hear this.   I feel like this is a handicap so any other incentives we can pull together are helpful.    

here are a few:

* will you manage the property yourself?

* Multis or single families?

* Buy & hold or flip or?

* Region or geographic area for property search

After viewing several (many) properties it became very clear to me that my focus would be on turn key, 3+ units, in village settings (not rural).   So all of those could be decision points - but the investor likely needs to look around a bit before making that call.   This is a personal preference but once I narrowed that down it made searching and eliminating properties much easier.

Does anyone have any tips on improving the strength of an offer (without raising the offered price)?  I am looking at ways to make an offer more appealing.  Ideas of course include all cash offers, quick closing.  But if you can't pull those off, any other levers we can pull to help make an offer stand out in a competitive market?

@Ned Carey thank you for your input. May I ask what is the benefit of selling at auction rather than listing it as-is on the MLS? It looks like the auction firms will likely take a similar cut as a realtor's commission.

@Amy A. I believe I replied to your note with the property address, let me know if you do not get it.  I am not a paying member of bigger pockets so I'm not sure how that might limit my private messaging ability.

Thank you everyone for your input.   

Just an update on our riveting tale of tax sale woe.... The place is a tear down.  Service Master took pity on us and did not even bother writing up the scope (and therefore did not charge us the $300 for the visit).  He saw 30k of work on one floor in one unit alone.  Another 20k upstairs, another 20k in the basement.... You get the point.  And all that would get us is "contractor ready."   

We then visited some local builders who work with manufactured duplexes and single family homes.  They could actually make the numbers work for us, and the builder joked he might buy the property himself.   We also spoke to the town about demolition and building.  

Ultimately, our conclusion is the project is likely still a "good deal" - but we had never intended to get into the demo and new construction business.  This is only our second investment property, we've got small kids and can't do the work ourselves.   Our plan is to buy turn-key deals that will require minimal management.

So long story short we plan to list the property for sale, as-is.  We are sure that someone with the means to rebuild, perhaps a builder, can do quite well with this property.   

@Amy A.   if you are serious, PM me.   We are in the process of removing the occupants, and plan to list it as-is hopefully by the end of September.  

@Account Closed regarding our financial analysis - we considered everything including a complete gut rehab with new plumbing and electrical, but we did not consider that it might be a total loss, or that our gut job could also involve structural repair.   There is a hole in the roof that we could not see and the water damage was neglected for likely years.   When we bid we were under the impression that both units were occupied, and therefore at least habitable as-is.   We learned after acquisition that one unit has not been lived in for several years (more due diligence was required on our part, again lots of good lessons learned already...).     I will update as we go.