All Forum Posts by: Joe P.

Started to read through all the responses, and I thought this one made the most sense.

Yes, we are hitting some record unemployment numbers, businesses are forced to pivot their strategies, etc. But it would be one thing if inventory was even modestly neutral -- in most areas inventory is extremely low, DOM is incredibly low, and you've got to act quickly. Yes, there will be "corrections" along the way, but I don't foresee a substantial drop in real estate prices. Will we shift from a hyper-sellers market to something more neutral? Sure. That means pricing should stabilize, as should inventory.

The government has flooded various markets with props to help the machine moving. How will that manifest for us? Likely higher taxes and barriers to entry...but the buyers will still be buyers.

Everyone is expecting 2008 again -- 2008 was a market destruction based on poor/speculative mortgage-backed securities. Well, interest rates are so dang low and they are way more strict about how they issue loans, so I don't see it happening again in the short term. But, 50 years from now...yes. We can't ever seem to learn our lesson in this country. 

Ultimately up to you then to take on the risk and if the investment is "worth it".

Maybe they're looking for a new home, or are hoping to keep things "as-is" as it probably is the best living situation they could have for mom next door. Something tells me the owner is passing on a problem to you with this sale, but that's just my spidey sense going up from the information you've shared.

Certainly a tough "people" situation, but not a tough "investment" situation. There isn't much recourse for the daughter-tenant...the seller is selling. I'd personally want it delivered vacant if I had no intent on keeping a tenant there. With no other considerations I'd want that unit delivered vacant upon sale. And then day 1 I'd go and meet the next door (mother) to establish a relationship.

Now, the considerations matter here. The lease may be midway through a year-long lease and it cannot be broken. We're in the middle of a pandemic and putting someone out on their rear-end is probably not a favorable outcome for anyone.

As a buyer you need to do your due diligence to find out the details above. If the daughter is on a month-to-month lease it would be far easier to terminate that agreement with notice and coincide with your close date.

Above all else -- get the information necessary from the seller and consult a local lawyer on what's advisable. I'm not a lawyer and the information provided above is not meant to be used a legal counsel.

Keeping it simple...you can read every book and listen to every podcast, but nothing prepares you for this business except BEING in this business. If your role is an investor, and you have no other experience here, as @Russell Brazil so eloquently puts it -- you're missing the big picture on risk aversion. What sounds riskier to you?

- Investing within an hour of your house, meeting your contractors/GC, having eyes on the property, utilizing local real estate values you might be familiar with...

OR

- Investing in an unreachable (by plane or significant transportation distance), not regularly meeting your contractors/GC, not having your eyes on the property, not having knowledge of the market...

When you compare the two, its a no-brainer. Guys like Russell are smart, experienced people who know what to look for, can identify markets, have the bandwidth (think money and experience) to "set up shop" in a locale and make sure to line up the right people, with protocols in place for the good and the bad, to have a high chance of success.

You, me, and most other investors -- we're relative nobodies. We don't have endless amounts of money, net worth, knowledge, experience, and bandwidth to take on that type of investment. It's TOO risky. Too many things can go wrong with an investment 5 minutes from you, why take on the risk of not being physically present for any of it on top of it/

I'm 34 years old, and fully realize my investment path is so conservative, its almost restricting. I won't reach 100 doors unless my mindset or investing goals change...and I'm OK with that (right now). I'm happy with 3 doors and picking up another door or two every year at as safe as possible pickups I can manage. Others may have a different view than I do, but back to the central point of my post -- I'm taking every possible step to mitigate risk. Long distance investing carries all of your standard investing risks PLUS the lack of eyes/knowledge/experience in the market you're investing in, as a new investor. No thanks.

So your intent is to use half the duplex for your own vacation purposes, keeping it vacant for your use only, and then renting out the other half, hopefully with a long-term tenant who is signing a year lease?

If so, I think its going to be difficult keeping both tenants. They're obviously going to be on the same team, and if you kick one person off the team, the other person is not going to be happy.

But, the property is for sale, so let them be mad at the seller, not you.

Request the units be delivered vacant, clean, in good condition, end the leases, etc. if the above intent is correct. You may have to check with a lawyer if this is appropriate in your area.

If you want my opinion, require the existing tenant to go through YOUR requirements for leasing a unit from you. This should include transfer of, or providing, a security deposit, signing YOUR lease, going through your background screening processes, etc. -- OR ask for the property delivered vacant and its up to the tenant to apply/reapply as a candidate.

My duplex had a tenant on the first floor, luckily for me he was a super nice guy, but I could have been screwed if he was a bad tenant, behind on rent, didn't have a deposit, didn't sign a lease, etc.

This is a risk aversion business. Taking on a property from an absentee landlord is bad enough. Having existing tenants comes with its own challenges. Depending on the level of proper protocols established between existing landlord and tenant (proper screening, lease agreement, security deposit, walkthroughs/maintenance, et al), you could put yourself behind the 8 ball.

Hi Rob -- as a former avid soccer player and fan, I can tell you that most likely you won't see much happening for commercial businesses and AirBNB for this soccer team.

Women's professional soccer -- and this is a travesty, because I find their game to be far more clinical, thought-out, and executed over the men's game -- simply has zero draw. You might have a few hundred fans come to a local college stadium to watch them, maybe, if you're lucky.

In some locales of the country where soccer is a big-time draw -- think if a European city had a clone here, like a Portland, San Francisco, etc., you might get a few thousand fans to come out and watch. But really these leagues are more about keeping the players fit for global competitions, where there is actual money for them.

So, my perspective is not to lament about the women's professional game, but to tell you not to expect much of a boon from this. The players won't inject money into the local economy as they make peanuts, fans won't come out in droves to see it, and there won't be an economic windfall from bringing the team in. I certainly could be wrong, but its just my experience with the women's league. It's also folded, re-opened, expanded, and contracted a million times.

Compare this to the MLS -- the MLS struggled mightily before finally getting a stronghold and creating markets in towns that wanted them. Now those matches can regularly draw 15-20k. I don't know how some markets operate, but typically with sports that are "minor league" (think AA and AAA baseball), the thought is "if you build it, they will come" -- well as someone who grew up near the Trenton Thunder AA baseball and then the Philadelphia (Chester) Union stadiums, I can tell you it does NOT work that way. Chester still is a rough neighborhood with almost zero investment. The stadium was plopped there and it's done virtually nothing for the city of Chester itself, except draw 15k people there a few times a week to create a traffic nightmare. Nobody "hangs out" in Chester to spend their hard earned dollars and no businesses open there. Trenton is certainly getting better and the area around their stadium is nice enough, but its not like a huge appreciation event has occurred, and that stadium has been there for 20 years. They built very nice row homes along the waterfront in Trenton, one is for sale for $95,000 on Trulia. If you bought the land 20 years ago for 2k, yeah, maybe you made some money there. :D

I'll speak to the coronavirus aspect only -- it isn't going anywhere. I think it was here before March 2020, and I suspect even if a vaccine is developed and widely available in the next 6 months, not everyone will be vaccinated (yet). The operational process to "get everyone vaccinated" is almost a herculean feat in itself, not to mention actually developing a viable vaccine. There has never been a "run on" vaccines like you will see with 200 million+ people actively seeking it.

Point of saying this is, coronavirus isn't going away. It'll become more ingrained in our daily lives, like the flu (not comparing it to the flu, just expect it to be something that doesn't disappear even with a vaccine). So states will determine the economic blueprint accordingly. If it were to "go away/vanish", I could see some of the laws being relaxed and returned to some kind of "normal" in 3-6 months as we stabilized the economy.

But, since it isn't going anywhere...laws that have been passed to protect tenants in historic times likely won't be reversed or slowed in anyway. If you've got a penchant for the waiting game, a penchant for dealing with squatters that likely aren't going anywhere soon and only to become more ingrained and emboldened by this...then be my guest. Frankly I'm not sure that's worth a potential 50k profit...then again, I'm a guy with 3 doors and have never done a flip. So, that's my perspective.

As in its a legal SFH but he is using it as an illegal multi family property? Yes...this will be a problem for you, yes.

This guy is operating it illegally and has taken no steps to fix the zoning. Chances are he is avoiding any local inspections for rental as well. By selling he is passing on the hard work to you.

Unless you have knowledge on changing the zoning and the costs/time in this area, it's probably a tough deal for a new investor.

In addition to the ideas posted above, I find most places do not have quality soundproofing/insulation on interior walls. If you are indeed a light sleeper, I think setting expectations early on with prospective candidates is a great idea. I would also seek to do month-to-month leases ONLY with reasonable cancel clauses for both parties. Prior to that, perhaps seek to insulate YOUR area something (spray foam?) before you have someone move in so you're not as affected?

Ultimately, you'll have to ask yourself if you can househack in this type of scenario...I have never had a roommate other than my family growing up and my wife moving in. I'm a bit of a loner and enjoy my personal space/quiet time. You might be the same...if you don't like roommates now, I doubt a househack is in your favor. No amount of financial windfall/savings will make you feel good if you're not living in your best house situation.