All Forum Posts by: Jacoby Atako

@James Hamling

Lol what? That was an interesting analogy. These are two separate issues and in no relation are relevant to each other. On one hand, I made a contract with a lady to sell me her house for $100k below market. Party of that agreement was to rent to her at $800 below market. If she's in the house 10 years, she actually comes out ahead. And from the responses here, it seems she was getting a great deal.

Separately from that, I was curious if it were legal to become section 8, etc. The answers have been yes, no, and it would likely take years.

Currently, it's become a moot point as she is not attempting to cancel the contract at the last minute.

@James Hamling

It's a moot conversation at this point. Section 8 is not really relevant anymore. The more pressing question is if I should force her to sell or walk away after spending $2k.

@James Hamling

Rereading that message, you've massively misunderstood. The section 8 idea in my original question was "is that legal..." I didn't intend to defraud, and I assume everyone rents out section 8 for a profit. But understand, that question had no relation to the contract it deal we made.

@James Hamling

Wait wait, the section 8 portion was in no way part of this deal. That was a random side thought that hasn't been discussed with anyone. The deal was allowing her to stay in the home at a massive rental loss to me. We took on wish risk I think. Not sure if that changes anything in your advice.

@Joe Villeneuve @Mindy Jensen @Kyle J.

Ok, I have an update that now I REALLY need advice on.  The lady, again, older lady, got cold feet and is trying to back out.  I am a few days out from closing.  I called my attorney who is setting up the deal and he is essentially saying we can force the sale by filing a specific performance.  But now I feel bad as this lady turned on me at the last minute.  In talking to her, I told her I might be willing to cancel the purchase but she would have to pay for $2k, to cover my out of pocket costs for ordering title and paying the lawyers, etc.  She initially said she would pay half, which I told her I wasnt ok with, and she essentially said she wasnt selling now and hung up on me.  

I am stuck between my conscience and my pocket book.  Has anyone else been through this?

 That's terrifying lol.  I am definitely coming back to this thread in 3 years to update you guys.  As morbid as it is, there is almost no way this lady will still be in this house in 5-7 years (death, moving her to a elderly community, moving her to her daughters, etc).  I am an insurance agent, so I am working the actuarial tables haha 

Yeah that is the potential risk (her living to be 100), but truthfully, I control the renewal conditions of the lease, which I put together a 1 year renewable lease with some contingencies to protect me in the renewal options.  But I am not heartless and I've known this lady personally for about 8 years as a client in my primary business, so I plan on making sure she is taken care of while protecting my bottom line.  I wasn't banking on the section 8 part, it was just an idea that came to mind.  I think the plan I more likely to go after is subleasing the second bedroom to someone else (she has a friend in mind that she likes) and moving the rent up to $700-800 and adding the second person on the lease.  I have to give her credit, I have walked that property and had it inspected and its in immaculate condition. She spends nearly all her time cleaning. 

@Joe Villeneuve

Thanks. Don't get me wrong, I appreciate the insight and definitely understand why this wouldn't work for a lot of investors. But it's a good situation for that I want to do.

@Kyle J.

Yeah I looked into a few things and at best it's a couple years out. It's a 2 bed, 3 bath townhome. I think subleasing the other room is probably going to be a better, faster solution (we've already talked about and she is open to it as long as we can both vet the person).

Thanks for the info

@Joe Villeneuve

I think there's a lot of unrealistic assumptions made here, which I guess is possible, but not very likely. This assumes that this lady will be in the rental for a LONG time, which I've known this lady for 8 years, and she's not going to be able to live on her own for another 5 years, I used a 7 to 10 year estimate as a worst case. At worst case I have a property that in 10 years, will cash flow at $300-400 a month AFTER refinancing and pulling all my money back out, using today's rent estimates.

There's also several ways to increase cash flow through my rental agreement with her prior to that. Opportunity cost would be lost if I couldn't get in another property due to tying up these funds, which isn't the case at current. I think I'll be happy with this passive arrangement for the next few years.