All Forum Posts by: Megan Phillips

@Joe Splitrock This message will self destruct in 5... 4... 3... 

@John Jackson In 6 months I want to know what happened.

@Account Closed  I called - but the zoning administrator was not in today - hopefully I can get more insight next week.

My title search came back yesterday, and the town's lister has the property as a single family home, but the wastewater permit (circa 2013) for the property lists it as a duplex (also the MLS) and that's what I'm trying to purchase it as. According to the objection in the title report, it's the seller's responsibility to rectify this issue before close on the 30th. If not - it pretty much means I am not going to buy it.

If it cannot be changed, should I try and see about getting money from the seller to cover the inspection, appraisal, attorney title search, etc as it was listed as a duplex and marketed that way? 

I'm hoping it gets resolved easily enough, but who knows. I'm not sure how common this issue is or how it gets fixed.

@Jim Sestito  I'm not sure if MA has anything similar to Vermont, but there is probably some program you can find that provides incentives for making homes more energy efficient (one in VT is literally called Efficiency Vermont, they do free energy audits, provide light bulbs, and low flow water taps, etc -- they also provide incentives when you switch to more efficient heating, like gas, or help pay for it somehow). A quick google search may find similar programs to help pay for your conversion in MA.

@Jeff Boardman Congrats! I am in the process of closing my first property also - it's exciting! Every time I think I'm in the phase of "just waiting for the closing date" something seems to come up with my financing so my stress level has been a bit high (found out yesterday that the bank for my loan only allows 2% cash back from seller at closing when we've already agreed on 5% on the contract). Sigh. Hopefully it'll get sorted out. Good luck with the 4-plex! 

I think it's up to you if you want to be an "accidental landlord," if you can break even with renting (mortgage, insurance, property management, and taxes) I would rent it. Although it's not ideal to bet on appreciation to make a purchase (or future sale) more attractive, if big employers are moving to the area, it seems like the value of the home will go up. Worst case scenario, you don't like renting it, sell it in a couple more years, and you still have increasing equity over that time. If you decide not to use property management to find tenants/manage, you could pocket a couple hundred bucks a month, and potentially pay for the new roof. 

There is PLENTY of information on this site to help with managing your own property, I wouldn't necessarily run right out and pay someone else to do it for you. I also think with a house rental, tenants are generally responsible for most upkeep (snow removal, lawn mowing, general maintenance, etc - so what's there to manage? Someone please correct this if it is not true). This is all assuming you have enough income for rent and savings for a new purchase in the future (could also use a HELOC or refi money out of your current home to help with down payment I would guess). My vote: rent it.

The seller is going to take 20% of the listing price for you? Or purchase price was taking into account the 40k down payment? That seems like a big jump considering the age of the building and the remodels underway. I don't know the area though, so I'm really more just wondering if that's a reasonable assumption for you. The numbers look decent though besides that.

@Jason V.   I could see an inspector potentially missing the roof issue (mine didn't get on the roof) -- but that electric issue seems nearly impossible to miss.  Just wondering if you spoke to the inspector after concerning that issue in particular? I know the paperwork I signed regarding my inspection essentially releases them of any and all liability, but wow, that's bad. How do you miss that there wasn't any grounding. Along with my inspection, there is also another Fire Marshal inspection where I'm assuming they will look even more closely at electric wiring and grounding issues, hopefully that can prevent a similar issue! At least you've dealt with the roof and electric issues and know there won't be any issues in the future.

I am reading Brandon Turner's "Book on Managing Rental Properties" -- it gives you tons of extras like lease forms and other documents, as well as recommendations for background checks, etc. I plan on using the lease provided from that book, plus the book is just great for the beginner investor. I am closing on my first property next month, the book has taken a lot of the "fear" out of the process because the more you know, the better prepared you can be. The more emotion you can take out of the process, the better. It's a business.

My process for 1st purchase:

-Got pre-approved

-Got a realtor/looked at places, and also analyzed almost all multis for sale in the area (over 3-4 months)

-Contacted local investors I found on BP to ask questions along the way

-Made some offers

-After getting an offer accepted - my realtor and lender kind of lead the way as far as making sure things are done as they should be, I just had to read the contract and sign on the dotted lines, then reviewed all of the disclosure reports and did the inspections, etc, and got an attorney to do title search and close (they also reviewed my lease) and then wait for the closing date, as well as the Fire Marshal and septic inspection (seller is in charge of this).

-I also created an LLC during the process via the attorney (to my understanding banks don't always allow sales under LLC's, mine does -- if it didn't, I would Warranty Deed the property into my name after sale was complete)

-This property has tenants until May, so I'm not worried about finding tenants immediately

-Cross fingers and hold on.

What a great success story! I am closing on my first duplex at the end of January, will hopefully use a similar strategy to refi and use that money to purchase more cash flowing properties! Good luck!