All Forum Posts by: Jeff Brower

great topic, thanks for starting. I will be screening my first set hopefully next month so I will be watching this thread carefully.

Hey Carrie,

Funny I am in a very similar situation in the next town over. In contract on a HUD that had not been winterized. I was supposed to close this Friday but there were several delays with the appraisal (lockbox had been stolen when appraiser showed up, next time they came they were given the wrong code, etc). Appraisal finally happened Friday and I should hear back today. Bank UW will then take 2-3 days. I had to file for an extension ($375 ouch!) as I still need to have my sewer line inspected prior to close. The plumbing will need to be completely redone and to top it off this is a hydronic baseboard system so on top of the regular lines I will need the baseboard piping re-done as well. I had recommended HJacks to you a few weeks ago. I believe I am going to have them complete the job with pex/ PAP. Also the electric panel needs completely replaced. I already have estimates for the repairs, should be under 10k for everything to make rent ready.

Purchase price: $43,000

Repairs: ~$10,000

PITI:~$400

Rent:$1200

This place demands a little more rent than normal around here as it is in a beach community with private beach and island access plus a marina (but not in flood zone).

Good luck with everything on your house! Hopefully I can close next week, get everything fixed during July, and be rent ready by August 1.

welcome. I live a stones throw away in Eastlake and work in Richmond heights. Are you in contract on your first flip or still looking?

Hey Carrie,

I don't have a personal plumber but I have used H-Jacks in the past and they have been good.

http://www.hjacks.com/home/

I would say that tubs will appeal to a higher demographic and will increase your potential pool of renters.

Most walk-ins have swinging or sliding doors which can be an extra expense to install and maintain if broken. Going with a tub and shower curtain would keep the ongoing costs down in my opinion.

I know that there is one in the resources tab at the top of your screen. You can also use the search function to find more info.

Here is one below that is not mine. It was copy and pasted from someone else's post. Sorry I cannot remember who it was or I would tag them.

PET ADDENDUM

Addendum to Lease signed _______________________________________________ (Date & Address)

between Landlord and Tenants: ________________________________________________

This Addendum states the responsibilities involved with being both a Tenant and a pet owner. Only the pet(s) listed on this Addendum or in the Rental Application are allowed. No pet sitting allowed.

Name of pet _______________________ Age _______________________

Breed ____________________________Size _______________________

Name of pet _______________________ Age _______________________

Breed ____________________________Size _______________________

1. The pet(s) and Tenant(s) will comply with all Rules, Laws and Regulations of the Owners’ Association (if any) and legal jurisdiction that the city of (insert city) requires; including licensing. Dogs will not be allowed out of the property without a leash. Pet(s)shall not be left unattended outside the Dwelling Unit.Tenant shall not inflict or cause cruelty in connection with any pet(s).Commercial breeding of pet(s)is prohibited.Tenant will remove or secure any pet(s) on the premises when property is on the market or when repairs are scheduled.

2. Rats and other pests are attracted by pet feces and food. Tenant is responsible for keeping property free of feces. Tenant is responsible for extermination of all pests. Pet(s)will be fed indoors only. Food will not be left outdoors

3. Tenant shall ensure that the pet(s) shall not bite, injure or harm any individual or other pet(s), and shall not disturb others (neighbors or guests) or cause damage to the Dwelling Unit or the premises. If, in Landlord’s opinion, the pet(s) has injured or disturbed others, or has damaged property, Tenant must permanently remove the pet(s) within fifteen (15) days (or sooner in the case of an emergency) of receiving written notice, and failure to do so shall constitute a violation of the Lease Agreement, and may subject Tenant to eviction. Tenant is financially responsible for any property damage, injury, or disturbances the pet may cause or inflict and releases the Landlord from all liability. Tenant agrees to promptly pay the Landlord for any damage or expenses caused by the pet(s) or the pet(s) actions.

4. Landlord and/or Agent reserves the right to enter the property to investigate any violations. Reasonable notice will be given unless circumstances require otherwise, such as in the event of an emergency. If pet(s) become vicious, severely ill, or poses an immediate threat to the health and safety of the pet(s), or others, Owner or Agent may enter the Premises and remove, or cause to be removed, the pet(s) and take any other action the Owner or Agent determines appropriate. Tenant shall be responsible for all costs involved and releases Owner or Agent from any liability.

5. At termination of occupancy, Tenant will have premises de-flead and de-ticked by a professional exterminator. Tenant will have carpet professionally cleaned and deodorized. Paid receipts are required from both contractors

6. Landlord reserves the right to require Tenant to maintain liability insurance for the pet(s) identified in this PetAddendum.

7. Landlord reserves the right to revoke permission to keep the pet and to terminate the Lease Agreement for violation of this addendum. Tenant will be responsible for the remaining unexpired term of the lease until property is rented to a new tenant

8. INERPRETATION: This Addendum supplements the terms and conditions of the Lease. If any provisions of this Addendum conflicts with any provisions of the Lease, this Addendum shall control.

_____________________________________

Tenant Date

_____________________________________

Tenant Date

____________________________________

LandlordDate

Interesting and thought provoking question and responses here. There was a large recent thread regarding Ohio and the general consensus was that wholesaling was illegal if NOT licensed. Interested to see what others thoughts are on this topic.

If this loan is backed by fannie then they may still be willing to loan based on an as-is appraisal since the utilities will not be able to be turned on. I am in contract right now on a hud home that wasn't winterized properly so it has burst pipes and also needs a new electric panel. I had contractors give me estimates and I am looking at around 5k total for all new pex plumbing in the home and a brand new electric panel. You just would need the home to appraise at the purchase price as-is. Hopefully it will if you are locking in a good deal. HUD does not allow any work to be done on the home prior to closing, I had assumed that homepath was the same but since you stated that they want you to fix it I am now unsure.

See this link regarding fannie loans and as-is appraisals.

https://www.fanniemae.com/content/faq/appraisal-property-report-faqs.pdf

Q21. Will Fannie Mae lend on a property where the utilities were not turned on at the time of the appraisal inspection?

Yes. Fannie Mae does not require that the utilities that serve the property be turned on at the time of the inspection. Fannie Mae requires that the utilities meet community standards.

Q31. In what situations should a property be appraised "as-is" versus "as-repaired"?

Fannie Mae permits an appraisal to be based on the "as-is" condition of the property as long as any minor conditions, such as deferred maintenance, do not affect the safety, soundness, or structural integrity of the property, and the appraiser’s opinion of value reflects the existence of these conditions. Minor conditions and deferred maintenance items include worn floor finishes or carpet, minor plumbing leaks, holes in window screens, or cracked window glass. Minor conditions and deferred maintenance typically are due to normal wear and tear from the aging process and the occupancy of the property. Such conditions generally do not rise to the level of a "required repair." Nevertheless, they must be reported.

The appraiser must identify physical deficiencies that could affect the safety, soundness, or structural integrity of the property as part of his or her description of the physical condition of the property. These may include cracks or settlement in the foundation, water seepage, active roof leaks, curled or cupped roof shingles, inadequate electrical service or plumbing fixtures, etc. If the appraiser has identified any of these deficiencies, the property must be appraised subject to completion of the specific repairs or alterations. In these instances, the property condition and quality ratings must reflect the condition and quality of the property based on the hypothetical condition that the repairs or alterations have been completed.

I hate to be a Debbie downer but just because you have a pre-approval (I assume you mean loan pre-approval in your post) does not necessarily mean that they will be willing to use a HELOC as a down payment. On most actual loan applications (not pre-approvals) there is a checkbox you have to mark that states that no part of the down payment is borrowed funds. A way around this is to season the heloc money in your bank account for a few months. They will ask to see previous bank statements when you submit your application packet and if you have a large deposit from your heloc this will send up red flags. All funds for your down payment must be documented and/or seasoned for anywhere from 2-6 months.

forgot to mention, you should be able to find that 'appraisal' on the hudhomestore listing webpage under addendums. They should have performed a plumbing air pressure test which will give you a little insight on if there are leaks in the system.