All Forum Posts by: Kent Baltare

Here is the scenario,

Signed a purchase contract 4 months ago to buy a home that was being constructed. Purchase price is $X and I gave a 10% down payment, as per our agreement. Since then there has been an uptick in the market and the completed home could now be sold for about X+ 20%.

Now in in the homestretch with closing, I am starting to get some push back from the seller indicating that he may be trying to tank the sale, so he can relist and capture that appreciation. He could do this by extending closing until I bail out or not completing the place to spec.

I am wondering if anyone has been through something like this and if they have any advice on what options there are.

PS the place is in TN.

Thanks for your time.

I agree with you that it shouldn't  matter what the market does.  The issue is my leverage in the contract is that I can always back out of the sale if I have just cause (standard home purchase agreement).  The issue now is that its in the builders interest that I exercise that leverage and back out, effectively taking that my leverage away... interesting position for sure.

Here is the scenario,

Signed a purchase contract 4 months ago to buy a home that was being constructed.  Purchase price is $X and I gave a 10% down payment, as per our agreement.  Since then there has been an uptick in the market and the completed home could now be sold for about X+ 20%. 

Now in in the homestretch with closing, I am starting to get some push back from the seller indicating that he may be trying to tank the sale, so he can relist and capture that appreciation.  He could do this by extending closing until I bail out or not completing the place to spec.

I am wondering if anyone has been through something like this and if they have any advice on what options there are. 

PS the place is in TN.

Thanks for your time.

So I have been having some challenges and wanted to throw this out there to see if someone had some good suggestions.

I own an investment property free and clear valued at $330k, good numbers, cash flow is strong, its a brand new vacation rental.  

I want to refi, and get the cash out to keep moving with my growth, however because I am a Canadian here (U.S.) on a working visa I am noticing that I am having some issues with classic re-financing and getting 80% LTV as a lot of my U.S. citizen friends are able to do.

Does anyone have suggestions on how to re-fi my place and get a solid rate as a foreign national?

Thanks in advance for your time,

Kent

Also wanted to mention for those looking to become first time homeowners consider this strategy tied in with a househack.  Could be a real success.

@Account Closed I agree with you and @J. Martin that networking and developing strong relationships is a key first step and that those efforts with networking will likely be rewarded with these kinds of amazing opportunities.

J. Martin, my background is in economics so I do have some thoughts on your comments about economic cycles and this REI model.

I tend to think the economics in the South Bay are strong for this strategy but my thoughts on that may differ from yours..

Due to high home costs our local market, investors struggle to maintain cash flow under standard lending conditions/structures.  With that said, allowing owners a % of anything you can make over market rent as furnished corporate rental is a unique play that can be used to attract great home owners with GREAT properties (Win/Win).  This strategy is a bit different than yours (I believe) but it relates to maintaining your supply of strong/highly marketable properties. 

The demand for a corporate rental is a different conversation which is subject to local business, but two things here:

1)  If the property is located in an area where only a handful of businesses would likely require its use, you are a lot more sensitive to local market pressures/economics compared to a place that is close, proximity wise, to not only multiples businesses which could demand your property but also multiple industries (Ie: tech, hospitals, finance, etc).  I think focusing on that initially is a good way to cover yourself in economic downturn, by being very picky. 

2)  Personally I would also think of other locations where the economics of the area are such that this model could work out great, and determine if you have any contact(s) there with a strong RE network?  Consider partnering with those people by providing the capital for lease/furniture, and have them take care of the property (owner) search + tenant search, then come to an agreement on cash split and responsibilities, go from there..

Long answer short, I don't feel that local economics should slow the implementation and growth of this/your model, but doing it with the right properties locally and also diversifying with operations in different markets will help cover your exposure if things start slowing in a specific industry within a specific market.

Hope that helps.

Kent.

Wow, a lot of traffic on this post which is awesome!

@Account Closed, I apologize for missing you at the summit where you may have addressed this, and if you did/do, please let me know so I can get involved with your program.

Thanks again for everyone's time with this, interesting topic for sure.

Kent

Thanks for the reply David, and very valid question.

If you are a buy and hold investor who is looking for better than market rents, while having great professional tenants, this scenario may be for you.  This would not be a scenario where people are coming in to your home weekly using it as part of their vacation which is what I think you are referring to when you say "AirBnB their place". 

These individuals occupancy would be no less than 1month and up to 3months.  Furnishing would be done by myself at the beginning of the lease.

After meeting with an owner, and explaining the opportunity along with my professional background and providing references, the owner could trust their property would be treated as I would treat one of my own properties, which is with the utmost respect.  At that point, they would feel comfortable with my vetting process for those staying in their property. 

Hope that helps,

Kent 

Hello to all.

I am currently searching home or condo owners in San Franciso's South Bay area who are open to leasing their property with with an allowed sub-lease clause.  Any sub-lease activity would ONLY be to a traveling professional vetted by myself, a fellow owner and investor, and there would be financial upside above market rents for any willing owner.

I am also interested in hearing whether anyone has any more effective ways of searching out an owner who would be open to sub-leasing?

Thanks to you all for your time,

Kent

Hey there,

As a quick intro I am an intermediate investor from San Jose, California who has it on his 2017 goals list to find a great mentor!  My second and most recent purchase is a short-term rental out in TN, and not only am I interested in real estate generally speaking but more recently that focus has been on the vacation rental side of the industry. 

I am looking to find a mentor with a good amount of success in RE.  When I say that I mean someone who has achieved their goals which seemed overly aggressive when they were initially thought up and has been able to leverage this success in to improving the overall quality of their lives.

I recognize that no good relationship is one sided so I hope to be able to help my mentor in whatever way I can, and I am always open to opportunities to gain experience in the industry.

If this sounds like something that may interest you feel free to send me a direct message.

Thanks for your time.