All Forum Posts by: Michael Gansberg

@Aaron Edmondson - be very careful of HETPA(home equity theft prevention act.) Based on your post, you might be going afoul of it if you purchase this home at a price well below its market value.

@Tim Siocheng - I'd consider that promise from the seller's contractor about the longevity of the roof to be completely worthless. If the roof lasts for 3 years, and you called them to get them to squeeze another two years out of the roof, they'd laugh so hard you'd be able to hear it from a state away.

Assume the roof is toast and see if you can make your investment hypothesis work anyway. If you can't, move on to greener pastures.

@Account Closed - people can be funny, and there's not too much you can do about it. I'm an investor first, but 3 years ago when I began trying my hand as a broker, my first showing went like this: I walked in to show the first apartment(after knocking loudly and saying, "REALTOR!") and as me and the prospective buyer walked through the apartment, a completely naked guy waltzed into the living room and asked us what we were doing there. You've been dealing with fish/broccoli? This place smelled like a marijuana grow house.

Roll with it. Let prospects know that the resident is slightly eccentric, you'll be fine.

Hi @Quinyana Mosley - we've all been there. It's an exciting place to be- you're standing at the precipice of what could be a long and prosperous path. Will you dive in, when so many before you have allowed their fears to determine their futures?

More practically, I suggest burnishing your credit until it sparkles, paying off high-interest consumer debt(if you have any,) reading and listening to podcasts(and definitely avoiding the high-priced 'guru' classes,) and saving up for a downpayment. You'll often hear about no-money down real estate. While it's possible to do that, I consider it the exception rather than the rule. As you gain experience and connections, you'll be more likely to find no-money down deals, but early on, a low downpayment loan from Fannie(or Freddie?) on an owner-occupied multifamily would likely be a smarter and easier path towards achieving your goals.

Good luck! MG   

Hi @Lee L. - you should have explained to the former tenant why you kept part of the security deposit- cleaning fees, unpaid rent, late fees, etc. Hopefully, you took pictures of any damage and/or have bank statements or other corroborating documentation regarding late rent and unpaid late fees. If you can back it up in a court of law, I wouldn't give them a dime. And if they drag you into court, just be honest and forthright. If you're in the right, you shouldn't be penalized for it.

I get letters like that sometimes too. I find that lawyers use very nice paper, generally, so the other side of the letters can often be used in your printer. That's highest and best use for it, IMHO 😁  

@Pete Widell - impressive that you can revive a toilet from the 20's(do you mean the 1920's? I've never heard of such an old toilet. I guess they don't make things like they used to!)

If the toilet really is that old, it was probably built without water conservation in mind. Toilets from the 70's regularly used upwards of 5 gallons per flush- modern standards are around 1.6 gpf. So you may have water hogs on your hands- if that's the case, I'd leapfrog into modern technology. The Niagara Stealth from Home Depot uses only .8 gpf, I've installed them and they work well. Or try any well-reviewed toilet that uses 1.28 gpf(that's a typical water-sipper these days.)

@Cody L. - my post was slightly off topic. It was kitchen cabinets being replaced plus a few ceiling tiles, not roof tiles😃, see below pic. My post was more about GC shenanigans than roofing ripoffs.

I hate when contractors go off the deep end. My residents requested new cabinets and repairs to the ceiling tiles, they said their uncle was a contractor, so I asked the uncle to take a look. He came back with $8800 for some ceiling tiles and cabinets! I thought it was a typo. Here’s the exchange, enjoy.

Hi @Cambria Wengert - 

Section 8 tenants have been the bane of my existence. Yes, the checks will come each and every month reliably if:

1. The tenant recertifies on time

2. The tenant doesn’t break any laws

3. The tenant doesn’t get a job which disqualified him/her from Section 8

4. Your unit passes inspection(now I’ve had countless Section 8 inspections. I’ve failed every one. It’s always things that were just fine the year before, but suddenly it’s no longer good enough, or suddenly it’s broken. Well, who broke it? It wasn’t me! But it’s ALWAYS my responsibility😇)

A shorter way of stating the above list is to say that your checks will not come reliably each and every month, and you’ll have way more headaches, and GOD FORBID the tenant has to pay part of the rent- now you have to chase two entities for a single rent collection. 

I finally threw up my hands this year and stopped taking Section 8. And the one tenant I did take, in a moment of weakness, immediately reminded me why I don’t take those tenants anymore.

@Melonie Dickson - as earlier posters mentioned, the inspection contingency weakens your offer. I seldom put inspection contingencies in, because I have management go over the place with a fine-toothed comb at the first showing- so I usually know what the problems are. When I was more of a rookie, I never waived the inspection contingency. 

So I'd say if you know what you're doing, and can accurately estimate any repair costs, waiving the inspection contingency will increase the likelihood of a successful bid. If you're new(as you say you are,) then you're at a competitive disadvantage to those who are able to make those estimates on the fly. So...do you feel lucky?