All Forum Posts by: Account Closed

Imran, you must know and agree to comply with state and federal equal housing, non-discrimination policies. Second, create and apply a screening standard to be used for each potential tenant. Here's an example:

Set minimum credit standards.
Establish maximum residents per bedroom.
Limit pets.
Check previous landlord references.
Require that the tenant be employed or have a minimum income.

Applying standards improves your odds of having responsible tenants. Just because the government guarantees the rent does not guarantee you have a responsible tenant. A responsible tenant is the key to a happy ownership experience. Wish you luck.

Wilson, every project is different and comes with it own unique set of circumstances, your budget is whatever you choose to make it. However, you need to be clear on what your real estate goals are; SFH and MFH are very different projects with very different expenses which require adequate budgets to have a decent ROI.

Regarding outdated units to cashflow, just don't expect top dollars for it or expect to have ideal tenants.

Once you decide on a particular brokerage, I would definitely recommend joining a team. Use it as an opportunity to learn as much as possible and to understand how things are done in your market. It'll keep you from floundering and trying to figure things out during your first year or so as a solo agent. A team will give you a structured education and experience in a controlled environment as oppose to learning on your own which could be time consuming, expensive, and frustrating. After a period of time, you'll know when you're ready to leave the team and go on your own as a full time agent.

I tried using them here on the east coast months ago and eventually gave up on them. I never made it past my initial call to them and they never bothered calling back when messages were left. I haven't tried them since.

Quote from @Zach Cowan:

Hey Bigger Pockets Community!

I'm considering selling my rental condo to my current tenant and am seeking advice for what to consider. I'd like to sell direct using just a real estate attorney to reduce the cost of sale/increase profits. I'm hoping folks here can share resources on everything to consider for conducting this transaction on my own, steps, disclosures required in VT or links to good resources. More info on the property and sale below.

My tenant has been in place for 2.5 years, has very steady income in the medical field (over $300k annually) and is interested in purchasing.

I wouldn't consider FSBO for the open market, but I would consider selling at recent comp values to my existing tenant without agents involved to keep our costs down. The association is currently in the process of acquiring bids for residing both buildings entirely and rebuilding 3 story decks that have rot. I anticipate this to cost ~$30,000-$40,000 per owner and it could be a good chance

I bought in November 2018 for $278k with $56k down and put another $5k in for renovations. I've got roughly $200k in equity with similar units going for $400k in recent sales.

My plan would be to use the profits to purchase a multifamily in the same neighborhood.

Thanks in advance for any insight!

Zach
 

Hey Zach,

It seems as though the proverbial stars are aligning in your favor with regards to selling your condo to your tenant. The timing of the proposed sale couldn’t be more to your advantage than it is now given the details you’ve provided in your post.

Although I can appreciate your desire to save money by cutting out the real estate attorney/real estate agent, it would detrimental to do so for a variety of reasons. Selling property may appear relatively simple (on paper) to do when researched but the actual process itself can be complex and more so if liability is involved. I would recommend anyone selling real estate to have proper representation as aspects of the process can be time-sensitive and/or contentious.

If you insist on selling your condo on your own I would keep these things in mind:

Determine the condo’s actual market value. Knowing the value of the condo will help you come up with a realistic selling price.

Negotiate the Price and Terms. You can present your asking price to your tenant, but be prepared for your tenant to counter with a lower offer. Consider issues like repairs that the tenant is willing to make at his own expense and what closing costs each of you will pay after settling on an agreed-upon price.

Discuss an Earnest Money Amount. The earnest money amount is separate from the down payment and is a small fee, paid up-front to show the buyer's good faith intention of purchasing the condo.

Consider a Contract-For-Deed. You may want to finance the condo for your tenant if he is unable to get a loan through a mortgage company.

Have your attorney draw up the sales contract once all of the terms have been agreed upon and you know what your tenant's financing and down payment plans are.

You can ask the attorney to order a title report on the condo in preparation for closing.

An appraisal should be done to ensure the value of the condo if mortgaged.

Arrange for closing with your attorney once the inspections and repairs have been finalized and the tenant's financing is in order. In some areas of the country, home sale closings are done at title companies.

I hope you find the above info useful, good luck.

Quote from @Austin Bull:

@Account Closed Thanks for the input, I will definitely look into those other options. But yes, I agree, the best way to go about this is just to ask the lender. How did you find your first lender? I know Bp has a tool that can match me with lenders. Have you used that tool? I'm thinking of just asking the real estate agent I'll be working with for a recommended lender..

Austin, your real estate agent would be a good place to start to find a lender as most agents make referrals to their in-house loan officer. Wish you luck.

I would advise putting this question directly to a lender for an accurate answer. In our current economic climate in this country, I would assume that banks want the best of the best when it comes to offering loans. If your financial profile looks less than ideal, it will be hard to convince them to give you a loan. I would  suggest other means that are less conventional.

Kaylor, I would be the first to tell you that I'm not an expert when it comes to seller financing (and would welcome the feedback of others). However, the first question that hit me was 'how accurate is the ARV in this market?' Philly can be a finicky market as some price points are more active that others given the overall economy and increased rates currently. A formal appraisal would probably be needed here and a hard look at projected market trends 12 months from now.

Also, I would consider escrow. This will create a space for scheduled doc signings and house transferal as well as allowing time for inspections, home insurance, and making sure there are no issues with title. In fact, I would not proceed forward with this deal without escrow.

Finally, confirm the seller is free to finance the sale. You don't want to be surprised by a outstanding lien or mortgage on the property, a title search will help you vet this out. Make sure that reselling the property in the future will be relatively easy and have a lawyer look over any sort of contract before you sign it!

Wish you luck.

Kwame, as impractical as it sounds, you may need to work with more than one agent as Pittsburgh is less than two hours away from the other two locations mentioned. Unless there's a huge incentive (or compensation/reimbursement) tied to this, most agents would probably be reluctant to assist you. I can't imagine traveling from Philly to Washington DC to do business anymore than an agent traveling between Pittsburgh and Somerset/Seven Springs in PA as the commuting time in both scenarios are almost the same. Wishing you luck.

Quote from @Adam Rose:

Quote from @Account Closed:

The real estate industry as a whole uses lock boxes for this purpose. Lock boxes are normally rugged and can stand up to bad weather. Is there a reason why you do not prefer lock boxes?

What am looking for is for a individual TEMPORARY Code, that automatically changes for each prospective tenant. I am not looking for a lockbox with a single code. i.e. each prospective tenant will show up at the house, after being verified,receives an their personal code which is good for that time slot of say 20 mins. I know there are big companies out there such as sentrilock but that requires wifi and a hefty subscription.

 I understand. I'm grasping here and apologize for not having a definitive answer for you. I believe residential security companies like ADT, Slomins, etc., have online portals where you can change the code remotely. I'm not sure if this can be done automatically after each visit to the property or not but it doesn't hurt to inquire. With technology being what it is, this particular feature may be available from smaller companies as well.