All Forum Posts by: Marco Brunicardi

If handled and set up properly, there isn't that much risk, especially for the seller. There are specific deals, homes, and sellers that present some risk, and I generally avoid those, but I do all the others with zero issues. It is impossible to say yay or nay without the details of the situation, but an experienced investor knows what to do, including gathering the critical information even before setting up the deal, or declining it.

The limiting effect on credit is temporary, it may turn into a benefit further down the road (around 12 months or so, depending on the lender), so it's about if it's needed and when. There are also other ways of financing.

The bottom line is, Sub Tos are fantastic deals, but you need the right investor to work with.

As already stated, you definitely should get an attorney who handles these transactions, and I hope you did. It's a lot easier as a buyer than a seller, and at current rates, it could be a great opportunity. Good luck!

Yes, since it's not his residence, it's a good idea if he hires a RE attorney as the Dodd-Frank law is long and complicated. I don't believe he has to get licensed, and the tax implications should be very favorable, but it depends on his personal situation. This one is for a tax advisor. I would recommend looking into using a trust, it may offer significant benefits to both of you. That's just what I would do if I were you. Are you keeping it as a rental? Good luck!

@Tristan Sparks

If you're not familiar with the type of deal and the prevailing laws in the state, do use an attorney. It may seem expensive, but it's good insurance and a very good opportunity to learn. You may not need one in the future, once you feel you learned enough, then maybe do without, but if you find one who is competent and decently priced, I would keep using one. 

 I have to disagree with such a blanket statement, however there's some truth there and I agree with the warning. Very few homeowners would know how to properly set up and structure such a deal, let alone handle it all the way through to completion. Actually, some very unethical ones would set up buyers for failure to keep profiting on the turnover. So the key here is to make these deals with the right investors. It's the same with any other real estate professionals, agents and brokers, attorneys, mortgage brokers, contractors, anyone in the industry. More recently, a large influx of rookie investors have poured into real estate for several reasons, and they are at high risk of screwing up everybody, themselves too, not intentionally, just because they "learned" too quickly and don't have the necessary expertise. If you're a broker, as it appears, I'm not surprised by your statement because you generally are well versed in traditional transactions, but not in any other alternative type of deal, so you're not alone, probably 95% of agents can't assist with these deals, in my experience.  However, some take the time and make the effort to understand what we need and we do great business with very very few brokers and agents, who understand the nuances, not just the concept and the implementation. If you are definitely closed to these deals, that's totally OK, as I said, it's normal. If you're open to understanding more of how I/we operate, we can chat and maybe find common ground. I'm very disappointed that some ruin it for so many, investors, sellers, buyers and yes, brokers as well because they lose business and can't assist their clients in the best possible way, which is what it's all about.  Apologies for the long reply.

Does it cause you actual financial hardship or is it turning out as a bad or less than ideal investment? In the 1st case, try and work something out with the tenants, like others said already, maybe a tactical upgrade agreed with the tenant.

In the second, do as much as you can by yourself, that would save you a ton and possibly put the investment back on track until renewal. At least, get plenty of quotes and shop smart. Then I think you know what to do in the new contract. Remember that inflation was predicted and predictable, but of course, it's tougher to figure out when they'll fall. Maybe you can access your equity before it gets tougher to do so. You can always choose the strategy of being strict about any violation, but it may be borderline unethical, and silly if they're good tenants, so I wouldn't recommend it unless you get real desperate. 

You could try negotiate a deal, where you get an increase, but you give something in exchange. Unfortunately it's already a long term, so you can't give more time, see if you can figure out something that's of value to your tenant that you can concede. Unfortunately, if the tenant is smart enough, they'll know that they have a good deal, but maybe you can come up with something, now or in the near future.