All Forum Posts by: Jon Kelly

@Matthew Catanzariti selling could be a great option. You should run the numbers on the property as is today. Would you buy it for $950k? 

I'll bet the COC or monthly cashflow would be too low. Sell it and 1031 into a larger property.

@David Li Also what kind of property is this for $1M??? I've only heard of cities/townships tearing down buildings if they have a LONG history of neglect and causing disturbance to the area. Is this a known drug property? Is it full of squatters? Is it about to collapse into the street? 

If this is your average rental with working families I can't imagine city/township wanting to tear it down

@David Li 100% speak to a highly recommended lawyer in the area. You already spent $250k so don't skimp on a cheap lawyer. 

Try to go after the seller for misrepresentation first. Is there any way you can back out of the agreement? Next, I would explore the possibility of working with the city/township on rezoning the property. 

Are the 7-units rented? How long has this been going on (when were they built)? I can't imagine the city wanted to tear down 6-units if they are currently rented and have been this way for many years. 

@James Campanaro This is a tough situation especially because of the sentimental value tied to your grandparents home. 

I would 100% keep it as a rental. I'm assuming you'll need to put some money into it since portions of it is likely outdated (if it's anything like most grandparents homes). After renovations you should consider refinancing and using the money to fund your next investments. You'll be a flourishing REI in no time!

If you want to sell I would try to negotiate with the buyer since you already have a buyer and you're only $10k off. 3 weeks and NO offers in this market tells you it was priced near the top (or above) of market value. 

I would say you're willing to drop it $2.5k and you'll probably settle on $5k. The buyer 100% has at least $2.5 to spare based on their original offer and they can find more funds if they want the property. Think about their initial offer: assume it's $200k. They assumed they will put 25% down ($50k). Appraisal comes in at $190k so they need to put down 25% ($47.5k). $50k - $47.5k = $2.5k. Same is true if the offer was $400k (25% = $100k down payment). Appraisal is $390k (25% = $97.5k down payment). 

@Ivory Coats investors love information. So the more information you can provide to help make their decision, the better. 

I would pay if/when I had a relationship with the wholesaler. If this was our first deal together I would be very skeptical of a $50-100 inspection report. 

@Chris Siefert what better time to invest than when you experience a life altering disruption? You're an entrepreneur and sounds like you've been wanting to invest in real estate for awhile. Don't let this opportunity come and go. If not now then what will you be waiting for? 

@Jonathan Greene has a good point about first securing a good home for your children. Maybe look into a 2 or 3 bedroom apartment. 

I don't know the Long Island market well enough to know how well multi-families are cash-flowing these days. You may have to look out of state. 

@Hoi L. tough situation, but all good real estate is worth fighting for. 

At this point I would focus first on your relationship/communication with the seller. The listing agent can't do anything without the seller's approval, so it's best if you and the seller are on the same page. You can copy all parties on emails to make sure everyone is aware of the current status. I would also be calling the seller regularly to make sure you're on the same page. 

For as long as the listing agent is involved you need to also communicate with them. If the seller can get out of their contract with the listing agent, great. But, until then, you need to also communicate with the listing agent. 

Can the seller call the agent's brokerage and speak to a boss/supervisor? See if they can switch to another agent or drop them entirely. 

@Steven Seguin that's weird "Dave" didn't share all of his secrets with you... Maybe if you buy his course he'll give you all of the answers. He probably makes more money on his courses than real estate...  

@Jaron Walling is spot on. It's rental arbitrage. It can be done but it's a huge hustle. Think of it as a shady version of wholesaling. One of the biggest downsides is you don't own any real estate... You miss out on the benefits of owning an asset: appreciation, tax benefits, etc. 

@Ross Spindler Don't sh*t where you eat. 

There are MANY other ways to attract other investors or hard money lenders to launch your real estate career. 

I would encourage your tenant to join BiggerPockets and get educated on real estate. Maybe you can suggest a few syndications she can invest in. 

@Nathan K. 

You're never stuck. Here are 3 options outside of saving for a future down payment:  

1. Borrow money (friends, family, investors, hard money lenders, etc.) 

2. Seller financing 

3. Refinance existing properties and pull out equity