All Forum Posts by: Jason Taken

Quote from @Ricardo Polanco:

Hi everyone, I bought a property 5 month ago in Pennsylvania, the property came with a tenant paying under market value rent (actual rent: $550, market rent $1200). Besides the low rent she pays she is very demanding, pays late and is not taking good care of the property. The previous owner made a really poor elaborated lease that looks like it is going to end in April 2025. I would like to know if there is a way I can terminate the lease based on the unclear termination date or no termination restrictions indicated? I know she won't cooperate, but I would love to get the property back, renovated and put it back to rent. I am attaching here a picture of the lease, of course keeping in private some information. Thank you.

 Speak to a local atty.

This isn't really that earth shattering, just kind of annoying.

The title insurer will usually require the scope of work and any lien waivers to issue certain endorsements required by lenders for recently rehabbed/constructed properties.

Permits are all public record anyway - and often double checked by the appraiser.

So - while it is kind of annoying, a lot of this work is already required to complete the transaction anyway.

Just my thoughts.

Quote from @Frank Robinson:

Does anyone have experience converting a multi condo unit house to simply a multi family property? If so, what is the process like a condo association from multi tax lots to a single tax lot. Looking at a 5 unit condo property that should really be a 5 unit multifamily.

Hi there,

Converting a condo property to a multifamily property is a complex process, but it can be done. Here’s a step-by-step guide to help you through it:

**Understand Local Regulations:**
First, you need to check with your local city or county to see if the zoning laws allow for this conversion. Each area has different rules, so it's crucial to get this cleared up early.

**Get Necessary Approvals:**
In many places, you'll need approval from a significant percentage of the condo unit owners to make this change. For example, in Illinois, you need 75% approval from the unit owners to convert a condo building into rental apartments.

**Legal Documentation:**
You'll need to work with a real estate attorney who specializes in condo conversions. They will help you draft the necessary legal documents, such as master deeds, rules, and regulations, and ensure everything is filed correctly at the registry of deeds.

**Tax Lot Consolidation:**
To consolidate multiple tax lots into a single tax lot, you'll need to work with local authorities and possibly a title company. This involves updating the property records and ensuring that all units are now under a single tax identification number.

**Financing and Mortgage:**
If there are existing mortgages on the individual condo units, you'll need to refinance or partially release these mortgages. This can be complicated, especially if some unit owners are underwater on their mortgages.

**Inspections and Compliance:**
You may need to conduct inspections to ensure the property meets current building codes. This could involve modifications to the units, which can add to the overall cost.

**Tenant Considerations:**
If the property is currently occupied, you'll need to notify the tenants and possibly provide them with the right of first refusal or relocation assistance, depending on local laws.

### Additional Tips:

- Conduct a market assessment to ensure this conversion makes financial sense. Look at comparable sales and market trends in your area.
- Consider hiring professionals like architects, engineers, and construction managers to help with the process.

This process can be lengthy and involves several steps, but with the right guidance and preparation, it can be successful. If you have any more specific questions or need further guidance, feel free to ask.

Good luck with your project

Hi there,

First, congratulations on considering Melbourne for your investment. It's a great area with a lot of potential. Here are some key points and tips to help you get started:

### Understanding the Market

- Melbourne's housing market is strong, with median home prices around $429,000 and a 7.2% year-over-year increase.

- The area is known for its economic stability, driven by the tech, aerospace, and defense sectors, which supports a robust real estate market.

### Local Insights

- The city has a high livability index, excellent job opportunities, and is ranked as one of the best places to live near the beach.

- Be aware of the seasonal rental fluctuations, especially if you plan to rent out the property. Peak rental demand is during the winter months when snowbirds arrive.

### Financial Considerations

- Make sure to get solid financial projections before investing. Understand the local property tax laws, zoning regulations, and environmental regulations, as these can impact your cash flow and property value.

- Consider the risks such as hurricane damage and flood zones. Invest in hurricane-resistant construction and comprehensive insurance to mitigate these risks.

### Networking and Resources

- Connecting with local investors and real estate professionals is a great idea. You can join local real estate groups or forums to get firsthand insights and advice.

- Use online resources like the BiggerPockets calculators to run the numbers and ensure your investment makes financial sense.

### Additional Tips

- Since you're out-of-state investors, it might be helpful to work with a local real estate agent who is familiar with the market.

- Don’t underestimate the importance of thorough due diligence on the property and the local market before making a purchase.

Quote from @Frank Weiland:

I am looking at my first real estate investment in the Clearwater Florida area 33756 zip code in Pinellas County. It’s a 3/1 home 846 sq ft. Purchase price is $158K and needs 50K in rehab. Short term loan (3 months) for home and rehab = $203K.

What could I expect to have as current average loan interest rate and points/fees if I am a new accredited investor with excellent credit? Thanks.

Do you want a  loan quote? 

Hi there,

When you're dealing with a 7-unit multifamily property that has been deconverted into 7 condos, each with its own PIN, the financing options can be a bit tricky. Here’s what you need to know:

- **Conventional Loans**: These are typically used for single-family homes or small multifamily properties (up to 4 units). Since your property has 7 units, it's unlikely you'll qualify for a conventional loan.

- **Commercial Loans**: These are more suitable for larger multifamily properties like yours. Even though each unit has its own PIN, the fact that they are all under a single roof usually means lenders will treat it as a commercial property.

To finance this property, you will most likely need a commercial loan. Commercial loans often have different terms, such as higher down payments and shorter loan periods, compared to conventional loans.

Here are some steps you can take:

- **Consult with a Commercial Lender**: Talk to lenders who specialize in commercial real estate loans. They can give you specific details on what you'll need to qualify.

- **Use BiggerPockets Resources**: Check out the BiggerPockets forums and articles on commercial financing. There are many experienced investors who share their insights and strategies.

- **Run the Numbers**: Use the BiggerPockets calculators to see how different loan options will affect your cash flow and overall investment.

If you have more questions or need further guidance, feel free to ask. Good luck with your investment

Hi there,

Congratulations on starting your real estate investing journey and completing the rehab on your Detroit property It sounds like you've done a lot of work and are now at a critical decision point.

First, let's break down your situation:

- You've already done major rehab and have a tenant in place.

- You analyzed the hold option and know it can cash flow.

- The property is not getting much traction as a turnkey, and your hard money loan is maturing soon.

Here are some key things to consider:

**Refinancing with a DSCR Loan:**

- DSCR (Debt Service Coverage Ratio) loans are great for investors because they focus on the property's cash flow rather than your personal income.

- Make sure the property appraises for the calculated ARV (After Repair Value) to get the best loan terms.

- Consider the loan terms, interest rates, and any prepayment penalties. You can use BiggerPockets' loan calculators to run the numbers. You can also use DSCRANALYZER[dot]com.

**Conventional Loan:**

- Conventional loans might have better interest rates but often require higher credit scores and more personal income verification.

- They might not be as flexible as DSCR loans for investment properties.

**Other Ways to Flip:**

- If you decide not to refinance, you could consider partnering with a local real estate agent who specializes in investment properties to get more exposure.

- You might also look into staging the property or taking high-quality photos to make it more appealing online.

- Another option is to list it on multiple platforms, including local real estate groups and social media.

**Additional Tips:**

- Ensure you have a solid exit strategy, whether you decide to hold or flip. Knowing your next steps can help you make a more informed decision.

- Keep an eye on the local market trends. If the market is slowing down, it might be better to hold and wait for a better time to sell.

It's great that you're thinking ahead and considering all your options. Remember, it's okay to take your time and seek advice from experienced investors.

Feel free to reach out if you need more specific guidance or have further questions. Good luck with your decision

### Understanding REO Properties

First, it's crucial to understand what REO properties are. These are homes that have been foreclosed on and are now owned by the bank. They are often sold at a discount, but they can come with significant repair needs since they are usually sold as-is.

### Due Diligence

Before buying an REO property, conduct thorough due diligence. This includes hiring an inspector to check for structural problems, arranging for a pest inspection, and getting a professional appraisal to ensure the property's value matches the bank's asking price. Also, look out for red flags like neglect, possible liens, and unpermitted renovations.

### Financing

Make sure you have your financial matters in order. You may need to explore different financing options such as short-term fix and flip loans, home equity lines of credit, or even remortgaging another property. Companies like RCN Capital offer specialized financing for fix and flip projects.

### Renovation Planning

Develop a detailed renovation plan to maximize the property's value. Focus on projects that will bring a return on investment, such as updating the kitchen, bathrooms, flooring, and installing new appliances. Ensure you have a clear understanding of the repair costs and any hidden expenses that might arise.

### Market Analysis

Perform a comparative market analysis to understand the local real estate market. This will help you determine the property's fair market value and ensure you're not overpaying. Also, keep an eye on sales activity in the neighborhood, including how long homes are sitting on the market and recent price trends.

### Avoid Common Mistakes

Be cautious of common mistakes like underestimating repair costs, not having a solid exit strategy, and overpaying for the property. Working with a team of professionals, including real estate agents, contractors, and inspectors, can help you avoid these pitfalls.

### Finding the Right Property

Work with a real estate agent who specializes in REO properties to find the right deals. These agents have access to a large inventory of bank-owned properties and can provide valuable insights into the local market.

If you follow these steps, you'll be well on your way to successfully fixing and flipping REO properties. Remember, it's about careful planning, attention to detail, and making informed decisions.

Feel free to reach out if you have more specific questions or need further guidance Good luck with your real estate ventures.

Quote from @Jonathan Swift:

Looking for private lending for BRRRR deals I have in Detroit and in Metro Detroit!

 We deploy capital there often. Give me a call.

Hi there,

It sounds like you're looking for some advice on how to navigate a complex situation with your brother and your wife.

First, let's address the joint account and mortgage issues. In a community property state like Arizona, your wife's involvement can be crucial. Even if you're not on the mortgage, your wife might still be affected because of the community property laws. It's a good idea to consult with a real estate attorney or a financial advisor who is familiar with Arizona laws to understand the full implications.

If you're considering a joint account with your brother, lenders will typically look at both parties' credit and financial situations. Since your brother will be living in and rehabbing the property, his credit and income will be significant factors. However, your credit could also be impacted if you're co-signing or jointly applying for the loan.

Regarding the funds, lenders usually require that the down payment funds be seasoned, meaning they need to be in the account for a certain period, often 2-3 months, to ensure they are not borrowed. As for the gift for the down payment, it's generally allowed, but it must be properly documented as a gift letter to the lender. The amount can vary, but it's typically subject to the lender's guidelines.

Remember, communication is key. Make sure you and your brother are on the same page, and it might be helpful to have an open conversation with your wife about the potential risks and benefits.