All Forum Posts by: Matt Devincenzo

What do you mean bad short sale? A short sale is just a sale but the lender is agreeing to take less than they are owed. Obviously that typically comes with distress, but any distressed sale is similar. You buy a problem to get a discount. There's really nothing unique to a short sale's distress, you just need a third party to approve of the transaction... 

Is the HWH sitting on concrete? 

My guess is your electrical is grounded to your copper piping (pretty common) and you have some sort of trickle charge running through the system and grounding out through the concrete.

The other option could be your gas line. There are cathodic protections on the steel gas mains, and if there is an issue in your meter that could be somehow causing the issue. I have a friend who works for SDGE and said they regularly have issues in the beach area with bikes leaned on the side of the house and shorting across both sides of the meter and draining the cathodic protection. So that's what makes me wonder if that could be happining here.

Probably not if it is an OO real estate...you still have to qualify the loan to be federally compliant. You could attempt saying its a business purpose loan since it would be for a FF use, but I doubt anyone is willing to do it still.

Assuming you qualify I'd go the 13% HELOC. If it takes you 6 months on a $100K rehab to get the units finished, leased and refi'd then you're going to pay $6500 in interest...what's a refi going to cost $15-20K with closing costs, any points, appraisal etc. etc. High interest for a short duration that you control seems like the way to go to me.

I'd suggest you reframe your perspective on this. The HOA is not likely 'crooked', they are doing what they think will minimize costs for the homes in the development. They may very well be wrong to bill you for this, but to claim they are crooked is a stretch...this is property management and insurance 101. If there is an offending party then bill them for the costs before paying for it out of the collective funds.

Also it is very very common for sewer, water, storm etc to be connected in condo or townhome style projects. That's one of the ways in which those projects are able to provide services to a higher density of units...individual City services are typically not feasible for these projects because they won't meet City requirements for access maintenance etc. That's why you need the HOA, because they implement your private CC&Rs which allow for the greater density...so ANY townhouse/condo you buy you should have anticipated that there were likely some shared services...if there weren't then you wouldn't need the HOA...

You should always be confirming this before a walk through, unless you are doing a group walk through time over a couple hours where the investment is lower than an individual showing. My response to any inquiry is something like:

"Thanks XXX, can you confirm you meet the criteria in the listing? Gross income 2.5X rent ($X,XXX/mo), no evictions, no violent crimes in 5 years, no late payments in the last 12 months."

My criteria here in Socal are different than when I had rentals in FL, but the point is the same. You want them to confirm they meet those criteria or its a waste of your time, it also helps if you later deny for one of those items.

In FL I had a guy who confirmed my criteria and then was upset when I denied for a criminal issue in the background check...because he plead 'no contest'. If he had lead with that when I asked we could have discussed, instead he wanted to argue semantics with me. Guess who I would never want to rent to...the guy who wants to argue with his prospective LL. I simply pointed him back to his confirming the criteria and failing to bring it up then if he had any question on what I expected. 

You should be able to reach out to any mason or foundation contractor for this. I assume you have the foundation permit/plan and can provide that to them to bid, so you just need to send it over and have them provide SOW and pricing. 

@Sean Ross your assessment that they need to buy out the partner or purchase with them isn't what I've heard over the years for a TIC. My understanding is with a TIC you have the option of keeping the same TIC structure with all parties OR completing your own 1031 and the TIC partner can do the same OR they can just pay the tax and move on if they choose to. Can you clarify this a bit? @Dave Foster?

They are a thing, and they're not very viable. Reality is that repurposing a tin can into living space is expensive. There are quite a few individuals and companies that have attempted these at some scale, and traditional construction beats them out on cost all things considered. IMO these are only useful when you want the aesthetic of a modern look.

I don't have much to add from the actual loan terms consideration, but I would encourage you to assign each property a value for a partial release and include that in your loan terms with the seller. That will allow you to refi or sell individual homes, or smaller blocks of homes to free up capital/lending capacity. That may not be feasible on the underlying note if it covers all the homes and wasn't already included in the terms.