All Forum Posts by: Jonathan R McLaughlin

hard to judge without the actual listing price to compare but it seems of your two offers you got two counters, one seemingly serious (the 115K on your 92K?). I'm not sure you are doing as bad as you think...

And keep in touch with the second one especially, maybe even do a thorough walk through, etc so that when no one else bites and they get more ancy, you have more information than anyone else.

Be nice, walk away, then have a bunch of those properties on your "second round" and I suspect you would have a decent hit percentage.

my partner and I have bought a couple this way...especially good idea in somewhat illiquid areas...

Jon

Vintage basement groovy rec-room for man-cave, cocktail party entertainment or dedicated kids play area. Lava lamp negotiable

The local boards of health may have (strict) regulations on the type of poison bait that can be used and its placement. We dealt with an infestation of bigger than mice creatures in a 15 unit building and were surprised at the extent of the protocol involved. This was MA so your mileage WILL vary. Mice really aren't a big deal to deal with (they are very stupid) but worth knowing the refs especially with children involved. FWIW the parents concerns seem very reasonable to me--even supervised kids get everywhere and the poison is nasty stuff. Don't go in looking for a fight.

Careful on the 750 hour requirement--that is only the first part of the "test" for REP. The next is that 500 hours need to be spent on directly managing property. 750 is the safe harbor assumption but by itself doesn't qualify. In addition, unless you explicitly link all your properties together (and my accountant mentioned how to do this but it escapes me at the moment though it's simple) so that you can meet the test in aggregate, you would have to have 750/500 hours on each property. If a lot of your properties have property management companies working on them you may have an issue. And if audited you will have to affirmatively prove through records you spent the hours required. It doesn't look like the burdens are too onerous, but lots of traps for the unwary. Not a lawyer, accountant, or tax professional and have not played one on TV.

For commercial I doubt you are looking at 30 year fixed, more like 5/7 fixed with a reset then and with or (maybe)without a 10 year balloon, amortized over 20 or (max) 25 years. YMMV but thats the range I'd be expecting. 30 year amortization would be very unlikely up here...

LOTS of folks know more about this than I do, but depending on the capital involved a self directed IRA could be pretty powerful. Also, you are in the "no penalty" withdrawal age (congrats) so you could decide a certain sum was risk capital and go there...conversions to Roth, etc.

Sounds a bit like mid unit (15-50) multi's might work for you if you choose well....but I'm throwing darts without a lot of info...

Good luck!

watch your commas and periods and capitals! No capitalization after a comma ("My")

Maybe pluralize to" investments" ?

We bought a similar building in similar price range out in western mass (14 unit mixed use) and are doing fine with it, but your #s seem a little thinner across the board and I'd worry u are headed for trouble here. PM me for details if you wish but are you including vacancy maintenance and capex? Management and turnover? Leasing fees? Accounting for investors and legal? That rent range is tough though to be fair I don't know Indiana. What kind of split do you have with investors...reserves? Jon

I think you need to ask what problem would you be solving for her in order to get you that " great deal"? Does she want cash to further estate planning because its easier to split other investments among heirs than a building? Does she want guaranteed income without the building effort? Has she been thinking of selling but doesn't want the hassle?

standing alone, "we are thinking we will just be able to get a great deal" has the risk of coming off to her as selfish if you are not offering to somehow make her life richer or easier. Not sure of the ownership structure of the building from your post but if the family has to sign off on a purchase...which it sounds like it does (?) wow, that is certain not to go well in a below market deal, as others have pointed out. 

And I might not lead with the notion of her only having 10 years remaining...she is likely pretty attached to them :)

We have had a number of med school/resident tenants. Lots of these folks in Boston and I echo the others that these folks tend to be great tenants. For starters, they are never there. Also, their time is precious so at the right location they are not very price sensitive (not to mention so many of them are plunging into mid six figure debt so at that point whats another hundred to live alone, etc.

If you have the right location its well worth it to contact the coordinators as others have said, and also to see if their are other ways to tap into the residents network at a local hospital through a google group.  You may never have to advertise again as they tend to pass the listing on to incoming first years etc. when they leave. For shorter rentals, look into announcements of fellows (1-2 years post residency).

The high touch approach here can be very successful IF you have a good location. Think: an incredibly sleepy person can pour themselves on a bus or train and wake up near their apt.