All Forum Posts by: Harvey Levin

@Zach Hoereth excellent point. I will add a situation that I am currently involved in. Investor purchased a property I advised him was not going to be a good purchase based on price and estimated rehab cost. Investor hired a cheap contractor based on a well know wholesaler recommendation. I advised the investor to make sure the contractor had all the proper insurance. The quote came back at a VERY competitive price. Turns out the contractor had liability insurance only. No workman compensation insurance but since the contractor was a individual with no employees he had a Indiana State Wavier releasing him from needing to have WC insurance but it was expired. I asked the investor how he thought the contractor could preform the rehab all by himself. Long story short... contractor hired "1099 " workers who also had no insurance and no waivers. 1099 fell off the roof and broke his back. Investor is now liable for potentially over 1 million dollars. Yes contractor is as well but the contractor has no assets. The investor does. Since investor did not require proper insurance his insurance company is NOT responsible. The LLC is not going to protect the investor as the investor has not acted as a corporation as most investors do not. Based on current negotiations Investor will not only lose the house but also several others as well as he may need to sell his personal home to pay off the agreement. Make smart informed decisions.

@bart h Thanks Bart.. Is there any reality that the loan will be called based on a failure to maintain the equity ratio? Meaning the 20-25% LTV will no longer exist if value drops? I saw that happen to several of my clients after 2008 with retail and Industrial properties.

As interest rates rise what will the impact be on properties purchased at the low returns current market? Will values decline due to hire borrowing costs? Example: If a deal makes sense at 4.5% interest rate to purchase at 1.3 million what would make sense at 6%? If values drop will there be an issue with lenders calling loans as they did in commercial buildings in 2008?

In any market if deal makes sense do it . If a deal doesn't then walk away. There are always deals to find in every  market . Some times it is easy and sometimes it is hard. The number one thing to remember is to be an investor not a buyer.

They are our number one choice for our closings!  Great service.

@Account Closed as you said.. you dont know who Morris Invest is nor the details of the fraud. While of course it is a buyer who should always do its due diligence that doesn't negate the fraud . This is probably the largest RE scam in Indiana history so far and it continues to continue . 

@Account Closed

I agree with Mike about avoiding the older converted SF and will add to avoid the older very large 3 bedrooms in lower income areas.  I do have a lot of success for myself (since  my 1st double  in C class  area bought in 1980 and still own. )  and for our management clients with 1 and 2 bedroom doubles.  Triplex and 4 plex have a different set of criteria and are more location sensitive.

@Keith Shadle  as we discussed yesterday, the VOUCHER amount may be 1200 but that includes more than rent and each tenant may be approved for a different amount. VOUCHER MAX is on line for each Housing Authority.  As far as rent increases , each Housing Authority can have a different policy on rent increases. In Indianapolis it may be applied for 1 time since the LAST rent increase of if the tenant is in 1st year after 10 months. Rent increases are based on market comps and if the rent currently is more than the market comp it can be lower. When doing market comps all amenities are used to compare with the units. @Johan Hultman Your PM needs to fight for that increase as something doesn't sound correct. Also the HAP contract must be in YOUR entity name before you can request an increase as the sellers contract ended the second the deed was transferred.  Finally it is important to remember that your tenant does not have to agree to the increase so make sure when you sign the contract (which requires a 1 year lease) that there is an amendment in place that if the tenant will not agree, or if the increase is denied, that the lease reverts back to a month to month lease. This way the tenant can  apply to Section 8 to move out.  

Also be aware that in Indiana, as well as most states , if your LLC is from a different state you must register in the state you actually "do business in" (property is located. Failure to do so will make your legal standing personal in the event of a lawsuit..

@Steve K.  Do the actual calculations as a cost vs value .